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October 19, 2017

USPS Outlook for 2018: Proposed Rate Increase To Take Effect January 21

Streamworks Marketing USPS Proposed Rate Increase for 2018

This month, the United States Postal Service (USPS) filed proposed price changes for Market Dominant and Competitive products with the Postal Regulatory Commission that will take effect on January 21, 2018 if approved.


Market Dominant USPS products include those most relevant to marketers: First Class Mail and USPS Marketing Mail, as well as periodicals. USPS Marketing Mail will see an average overall increase of 1.9%, while proposed bulk First Class Mail prices vary from an increase of just over 1% to a decrease of 6%, depending on the product (see below charts for breakdowns). 


2018 Postage Price Increases

The proposed price changes will include a one-cent increase in the price of First Class Mail Forever stamps, from 49 cents to 50. Postcard stamps and metered letters will also increase by one cent if the proposed price changes are approved. These increases are lower than last year, when First Class stamps increased by two cents.


First Class Mail commercial letter rates will go up 1.25% and single-piece rates will increase by just over 2%. There will be no price increase for single-piece letters being mailed to international destinations or for additional ounces for letters.


Mailing Services products will increase in by price by approximately 1.9%, and Shipping Services products will see an average increase of 3.9%. The 3.9% Shipping Services increase would produce a corresponding 3.9% increase for Priority Mail and a 0.8% increase for Priority Mail Retail.

While increases for Mailing Services are moderated by the Consumer Price Index, pricing for Shipping Services is adjusted based on market conditions and the need to maintain affordable services for USPS customers.


Proposed Key First Class Mail Single Piece Prices:

 Product Current Price New Price Percent Changed
Stamp Price 1 0z. 0.49 0.50 2.0%
Single Piece Additional Ounce  0.21 0.21 0.0%
Meter Price 1 Oz. 0.46 0.47 2.2%
Single-Piece Flats 1 Oz. 0.98 1.00 2.0%
Single-Piece Cards 0.34 0.35 2.9%

Proposed Key First-Class Mail Bulk Prices: 

 Product Current Price New Price Percent Changed
Mixed AADC Automation Letters 0.423 0.424 0.2%
AADC Automation Letters 0.403 0.408 1.2%
5-Digit Automation Letters 0.373 0.378 1.3%
Mixed ADC Automation Flats 0.750 .705 -6.0%
3-Digit Automation Flats 0.630 0.593 -5.9%
5-Digit Automation Flats 0.446 0.474 6.3%

Proposed USPS Marketing Mail 

Product CPI Percent Change
Letters 2.0%
Flats 2.1%
Carrier Route Letters, Flats, and Parcels 2.0%
High Density / Saturation Letters 2.4%
High Density / Saturation Flats and Parcels 1.1%
Parcels 2.8%
EDDM-Retail 0.6% 


In the next few weeks, the PRC will review these proposed postal rate increases for 2018. During the review process, the PRC will determine whether the increases for Market Dominant products fall within the legally-mandated price inflation cap. It will also determine whether the proposed competitive rates are adequate to cover the cost of those products.


Changes may be stalled, however, because any price increases also require the approval of the postal service’s Board of Governors. Members are yet to be appointed to the board by the president.

The proposed USPS Postal Rate changes are scheduled to take effect on January 21, 2018, assuming approval by the PRC. The impact on mailing costs will vary depending on quantity and mail class. 


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