Written by
Gannett News Service
Today, the price of first-class mail will inch higher. The minimum price of a first-class letter will rise one penny to 45 cents.
It's a relatively small increase that's unlikely to have a major impact on companies, according to one business analyst. However, companies and groups that send a lot of mail are keeping an eye on the situation.
Other entrepreneurs are looking at the rate increase in a different way: as a potential business opportunity.
The U.S. Postal Service is raising rates to help close a budget hole.
The agency is forecast to lose a record $14.1 billion next year. To shave off as much as $20 billion from its $75 billion annual expense budget, the agency is moving ahead with plans to close 3,700 post offices and about half of its 487 mail-distribution centers.
Besides the closures, it is proposing to raise rates and cancel Saturday mail delivery, among other measures.
The U.S. Postal Service must have a balanced budget because it is required to pay its own way.
E-mail has helped small businesses reduce the flow of mail. But there often is a certain percentage of correspondence that must be done by mail, business owners say. Some customers may refuse to accept an electronic document or they may not trust technology. Others may need to ship products.
For most businesses, the rate increase will have a minimal impact on their bottom line, said Gary Naumann, director of the Spirit of Enterprise Center at Arizona State University's W.P. Carey School of Business.
"It is one of the costs of business that keep going up, but it's not something that will make you say 'Wow, what are we going to do now?' " Naumann said.
But the slow economic recovery has made businesses more shrewd about managing costs, no matter how small, he added.
"When things get tight, you have to examine every line item on your income statement," he said.
Phoenix-based Make-A-Wish Foundation sends out about 6,800, pieces of mail each month to thank donors for contributions, said Julie McComb, office-operations manager for the charity.
"That is not something that we will skimp on, our letters to donors," said McComb, adding that the non-profit uses a Phoenix bulk-mail service to manage its mail costs.
If mail expenses climb, "we would just absorb the costs," McComb said.
Owners of one Phoenix business hope that the rising postal rates will bring the company more customers.
Postal Strategies helps small businesses get discounted postal rates, even when they mail only a few items, said Andrew Smith, the chief operating officer. Smith and his wife, Sandy, the president of the company, started the business in 2007.
Usually a business must mail 500 letters at once to be eligible for lower shipping rates. Even if the business has that much mail, it has to invest in special equipment and pay for a post-office permit.
Postal Strategies collects mail from several businesses. By aggregating the mail from several businesses, Postal Strategies' clients pay 42.4 cents per 1-ounce letter instead of regular 45 cents.
Postal Strategies takes the mail to a Pitney Bowes Inc. facility in Phoenix, where that mail is sorted by machine and given to postal workers who work onsite. Postal Strategies is a Pitney Bowes contractor.
Postal Strategies collects the difference between the bulk-mail rate and a lower, postal fee that Pitney Bowes pays. Pitney Bowes pays an even lower rate because it sorts mail into more defined categories that are easier for the U.S. Postal Service to process.
In 2007, Postal Strategies handled 10,000 pieces of mail per day, but now handles 50,000 pieces of mail per day. Company revenue has risen from $45,000 in postage monthly to $1.5 million in postage per month, said Sandy Smith the company's president.
The service saves JR Office Concepts money, said Ralph Carranza, general manager of the Tempe business. The company offers shipping services to businesses and to the public.
Since Postal Strategies picks up JR Office Concepts' U.S. mail, they won't pay the new higher postal rate.
"I am able to pass the savings on to customers," Carranza said.
New postal rates
- Letters, 1 ounce: 1-cent increase to 45 cents.
- Letters, additional ounces: Unchanged at 20 cents.
- Postcards: 3-cent increase to 32 cents.
- Letters to Canada or Mexico, 1 ounce: 5-cent increase to 85 cents.
- Letters to other international destinations: 7-cent increase to $1.05.
Source: U.S. Postal Service
You may also like:
Sting: 31 pimps and prostitutes arrested (with pics)
Bikinis, mud, trucks: The Redneck Yacht Club
Win an iPad: Enter to win an iPad from the Deal Chicken here
Naughty Schoolgirls: Naughty schoolgirl night at Tampa club pictures
Road Rage: Half-naked woman leads police on chase
Casey Anthony: Strip bar offers job
Spam of the Dead: Family horrified by dead mom's emails
Roundup: 60 hookers, pimps and johns busted in prostitution sting
Outrageous mug shot galleries...
Strange: Most notorious or unusual mug shots we've seen
Teachers: Teacher arrest mugshots
Jaw droppers: Open mouth mug shots
Smilers: Happy mug shots
Laughers: What's so funny mug shots
Prostitutes: Prostitute mug shots
Athletes: Professional athlete mug shots
Porn arrests: Child porn arrest mug shots
Local Mugs: Hillsborough County Mug shots
More unusual mug shots and galleries: 10 News slideshows and galleries
You Might Be Interested In