The big news is that the Postal Service is raising postage rates on August 29, 2021, not the traditional January once-a-year increase. And it’s a large increase due to additional pricing authority given to the USPS. This increase is more than the five previous price increases combined!
Yearly postage increases have been based on the CPI (Consumer Price Index). The Postal Regulatory Commission (PRC) also granted additional pricing authority to the Postal Service based on three areas:
- “Density” – loss of mail volume per stop (4.5%)
- “Retirement” – prefunding obligations for retiree health care and pensions (1.062%)
- “Non-compensatory” – price increases on “underwater” products (2%)
Add the CPI current increase of 1.244% and you get an overall 8.8% for the price increase at the end of the month. However, specific classes of mail increased more or less than this percentage.
What does the increase mean for business mailers and the impact to marketing mail?
- For many companies, budgets cannot be adjusted mid-year
- As a result, higher postage costs will likely equal fewer pieces mailed
- It is unknown when the annual postage increase cycle will occur. Will there be an increase in January (unlikely per industry experts)? Will increases now take place in August? All unknown.
Key changes for the August 29th postage increase include:
- Marketing Mail rates are increasing an average of $.017 each (7.2%)
- Nonprofit rates increase an average of $.014 each (10%)
- Presorted Commercial First-Class Letters are increasing an average of $.026 each (6%)
- Postcard rates increase an average of $.04 each (14%)
- Retail First-Class Forever Stamps are increasing from 55 cents to 58 cents
- Retail First-Class Postcards increase from 36 cents to 40 cents
Notes on Postcard Rates: The maximum size of a commercial postcard is increasing to 6″ x 9″ (from 4.25″ x 6″). However, retail postcards do not increase and remain at the 4.25″ x 6″ to quality for 40 cent postage.
For an updated postage chart including commercial First-Class, Marketing Mail and Nonprofit Mail, download J&Q’s FREE Direct Mailer’s Deskside Companion.
Contact J&Q if you have any questions on the postage rates and how to optimize your mail programs to mail them at the lowest possible costs. Contact us at 847.588.4800 or firstname.lastname@example.org and ask for Sales.