USPS® is raising rates on July 14, 2024 for the sixth time in 3 years with some of the largest increases in history and at significantly higher pace than inflation. We can expect these rate spikes to continue as the USPS has stated that two increases per year will be their new norm.
Postal Advocate has been creating comparison charts that go over the changes in rates to show how it will affect budgets. The reason we do this is to provide a true comparison versus the overall average % increase that the postal service talks about. Based on the type of mail you send, the increase could be higher or lower. Also, when you look at the new rate charts provided by the USPS®, they typically will not show the level of detail needed (Previous and new rates, side by side) to see these differences.
Hopefully, this will help you budget by seeing the impact of the most common services that you use today. At the bottom of this article there is a link to an excel tool where you can plug in your mail volumes to see the impact to your organization.
Here is a (https://postaladvocate.com/rate-change-tools/) to a simple chart of all the rates below
First-Class Mail® Single Piece – 6% – 17% Increase
The price of a stamp First-Class Mail® Single Piece letters and Metered letters are seeing a $.05 increase to $0.69 and $0.73. A single piece flat is increasing from $1.39 – $1.50. The biggest change is with the additional ounce rate. For letters it is $.28 per additional ounce (vs. $.24), which is a 17% increase. Flats are going up to $.27 per additional ounce (vs. $.24) which is a 13% increase. This is the first time we have seen a different additional ounce rate for letters vs. flats. Also, as items get heavier, you will have to budget for much larger price hikes.
First-Class Mail® Commercial – 6% – 21% Increase
Automation letters are going up 6% and Flats by 7-21%. To help to offset this increase, the credits for Seamless acceptance have increased from $.001 to $.002 (100% Increase) and for Full Service Intelligent Mail from $.003 to $.005 (67%).
With any increase, it becomes more important to look for ways to reduce costs. These are the options available:
- Use Meters or Online Postage to save $.04 on letters.
- Consider presort services if you run over 500 pieces per day or have one-time mailings over 1000 pieces.
- Automating your mailings in house or through third party mail services to have drastic postage savings.
- Presort and automation levels go up to 3.5 ounces for the same base rate.
- Flats and postcards can have the same automation rates as letters.
- Consider moving generic content mail from First Class to Marketing Mail®
Marketing Mail®– 0-13% Increase
Marketing Mail® Letter rates are increasing at approximately 0-4% while Flats are going up at 4-13%. The biggest change is occurring with heavy weight flats over 4 ounces. With these items there is a per piece and per pound rate needed to calculate the rate. As you can see from the chart below, the per piece rate is going up 3-13% and the per pound rate is going up by a whopping 37-47%.
The best way to save money is to move mail closer to its final location utilizing destination entry level discounts. The savings for letters and lightweight flats decrease by 7-23%, but the savings for heavy weight flats are seeing an amazing 423-531% increase. This can offset the 47% increase we are seeing in the per pound rate above.
USPS Competitive Services
The good news is Priority Mail®, Priority Mail® Express and Ground Advantage are not changing rates. We expect they will increase with the January 2025 rate increase, similar to what occurs with UPS® and FedEx®.
USPS Competitive Services
Special Services are seeing their largest rate hike in years averaging over 10%! The most common special service is Certified with Return Receipts where the overall increase of 11%. One bright spot is the cost of USPS Insurance went down by 10%
Additional Rate Change Items
Conclusion
29-64% increases in 3 years is unheard of and is impacting every organization. Mailers are going to need to look for savings strategies to help offset these changes. Our recommendation is to create visibility to all mailings and look for automation methods where applicable to reduce the cost and streamline production.
To budget for this increase, you need to look at the type of items you are sending, and the weight and zones that are most common, to truly estimate the impact. We have developed a Microsoft Excel-based budget calculator that you can download for free (https://postaladvocate.com/rate-change-tools/) that should help you better plan for this year. Some of the most popular USPS classes are going up at the highest rates but luckily there are ways to help mitigate this through automation and technology.
