Why it costs 44 cents to mail a letter

Saturday, January 22, 2011; 5:17 PM

Postal Service accounting is an arcane art, but here's an educated estimate of the costs of delivering a first-class letter. Less than half of the cost is directly attributable to sorting and delivering the letter. The rest goes to the Postal Service's general overhead costs. Even then, it will lose about 4 cents on the transaction as it struggles to meet unfunded obligations to its retirees.

- Andrew Schneider

COST TO USPS48 cents

Sorting labor10 cents

Delivery labor7

Facility/vehicle maintenance2

Fuel/transportation1

Buildings, equipment, vehicles2

Retiree pension/health2

Misc. expense/First Class8

Corporate overhead.16

operating loss -4 cents Cost to consumer44 cents

Schneider is an MBA student at George Washington University


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