MAILERS HIT WITH MASSIVE SECOND RATE HIKE IN 2021: Postage To Rise 6.8% For First Class And Marketing Mail in August

WASHINGTON, DC — The United States Postal Service filed notice on May 28 with the Postal Regulatory Commission (PRC) requesting price changes to take effect Aug. 29, 2021 that are in accordance with approvals provided by the PRC last year.

The rate hikes are the largest in a decade. Until the PRC revamped the ratesetting system last year, the USPS was limited to rate hikes based on the rate of inflation. The proposed price changes would raise overall Market Dominant product and service prices by approximately 6.9 percent. First-Class Mail prices would increase by 6.8 percent.

Click for New Postage Rates Effective August 29, 2021

Click for USPS Rate Hike Filing With PRC

The Postal Accountability and Enhancement Act (PAEA) of 2006 capped price increases for mailing services at the Consumer Price Index (CPI). The PAEA also required the PRC to evaluate the price cap system 10 years after the date of enactment and to modify or replace the system if it was not meeting the objectives of the law. The PRC recognized the price cap was a barrier to the Postal Service’s financial sustainability in December 2017, resulting in cumulative lost gross revenue opportunity of $55 billion. In May, the Postal Service reported a net loss of $82 million for the second quarter of 2021.

In November 2020, the PRC announced new rules on market-dominant prices, allowing above-CPI price increases on the basis of certain factors and allowing the Postal Service more flexibility in establishing prices for mailing services.

“November’s PRC ruling allows the Postal Service higher rate authority in establishing prices for mailing services,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “Aligning our prices for market-dominant products will allow us to grow revenue and help achieve financial sustainability to fulfill our universal service mission.”

The new rates will increase as follows: