New Postal Rates

Dan G. Blair
Chairman, Postal Regulatory Commission
Monday, May 14, 2007; 11:00 AM

Postal Regulatory Commission Chairman Dan G. Blair was online Monday, May 14 at 11 a.m. ET to explain new stamp, bulk mail and package mailing prices and pricing methods, how the commission arrived at them and how new rules passed by Congress will affect them in the future.

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The transcript follows.


Mt. Lebanon, Pa.: If I take my 39-centers back to the post office, can I cash them in for new ones? Or better yet, since I bought them from your online store, can I buy a mess of 2-centers from the same online store and have them delivered with my mail? It's the new century now, and its watchwords are convenience, efficiency, economy and foresight. I hope they're operating with you as well. Thanks much.

Dan G. Blair: I doubt your local post office will allow you to "cash in" your old stamps. But you can buy two-centers online by going to the site. Click on "stamps" and follow the links.


Washington, D.C.: Why do stamp prices keep going up? It happens so often I hardly can keep track, and I always seem to have the wrong stamps.

Dan G. Blair: Postage rates must cover the costs of running the Postal Service. If rates don't increase and costs do, someone has to foot the bill. The USPS doesn't receive any taxpayer dollars for its operations. It's solely supported by revenues from postage sales. So, increasing costs mean the price of stamps will go up.


Northport, N.Y.: Why is it necessary for ordinary users of the postal system to subsidize second-class mail, such as junk mail, newspapers and magazines?

Dan G. Blair: By law, each class of mail must cover its direct costs. So newspapers, magazines and advertising mailers all pay postal rates designed to cover the costs of providing that service.


Chicago: Are Americans using fewer first class stamps? What's the long-term trend? Other than Christmas cards and the (very) occasional letter, I just don't use stamps anymore. Thanks.

Dan G. Blair: You raise a good point. First Class mail volume has been on the decline as people migrate to the Internet to pay their bills and keep in touch with friends and family. While First Class mail volume has declined, advertising mail has been increasing. Plus, online retailing has generated mail volume.


Silver Spring, Md.: How about you make it an even 50 cents and then leave us alone for a few years?

Dan G. Blair: We hear that quite often, but if you paid 50 cents for a stamp you would be paying too much for the service. Postage rates have been designed to cover the cost of providing that service. In the future, however, postage rates will be pegged to inflation and generally can rise no more than the Consumer Price Index. It can be fair to say that one can expect regular increases but they will be inflation-based and predictable.


Harrisburg, Pa.: Is it true that there were changes in the size of envelopes that will require additional postage? If so, what are those changes, and might that be confusing in card shops where cards being sold under the old system won't have the warning that additional postage will be necessary?

Dan G. Blair: Shape and size will matter. If you check out, the site provides information and descriptions of the changes taking place today.


La Plata, Md.: Mr. Blair: The "Forever" stamp is such a great idea. I bought some a few weeks ago and now I don't have to stand in line! Who is primarily responsible for such an idea? Will you give him or her a pat on the back?

Dan G. Blair: Thanks! The concept was a joint effort by the Postal Regulatory Commission and the USPS Board of Governors. Other countries offer similar postage. It's a consumer-friendly product and we hope postal customers take advantage of it.


Newtown, Conn.: Why would people buy the regular new 41-cent stamp when they can get the forever stamp at the same price?

Dan G. Blair: Good question. Right now, the Forever Stamp is offered only with one design. If you're a stamp collector or like the different designs found in commemorative stamps, you will have a selection from which to choose. It's a matter of consumer choice.


Philadelphia: Help! I mailed some letters into a post office bin on Saturday, but I don't know if the mail was picked up on Saturday or will be picked up today. If it is picked up today, will it require additional postage, and if so, is the mail going to be sent back to me for additional postage?

Dan G. Blair: We understand that the Postal Service may provide a limited grace period for mail posted at the former rate. We don't know how long this grace period will last, however.


Washington, D.C.: Why weren't rates pegged to inflation in the past?

Dan G. Blair: Generally, the price of the First Class stamp tracked inflation over the past 37 years. In the future, recently enacted postal reform law will allow the Postal Service to annually increase rates generally no higher than inflation.


Lindenhurst, N.Y.: You say newspapers, etc., pay rates that cover the cost of delivery. Does the postage on each piece sent through the mail exceed first-class mail postage?

Dan G. Blair: Generally, magazines and newspapers pay about 30 cents per piece on average, depending on size, shape, weight, etc. This is 11 cents below the new rate for the First Class stamp.


Virginia: Two-three weeks ago in the Federal Diary discussion, someone commented that the Post Office gets no federal tax dollars. It is self-dependent. What if the USPS is privatized? Will stamp price go down or up?

Dan G. Blair: Congress recently enacted postal reform legislation which affirmed the Postal Service's role as a federal entity charged with providing universal mail service at affordable rates. The law caps future rates changes to the CPI, generally.


Saint Louis: My understanding is that the surface/economy shipping option for international packages was eliminated, so now all U.S. Postal Service customers are left with no other option than using Priority Mail International, which costs as much as air mail. For thousands of families and small businesses, this means that they no longer can afford shipping packages overseas. How would you explain this decision to all these people?

Dan G. Blair: The Postal Regulatory Commission has authority to recommend rates for domestic mail, but not international mail. International rate increases were done by the USPS without Commission input or review.


Washington, D.C.: Who appoints the Board Members who oversee the USPS?

Dan G. Blair: Members of both the USPS Board of Governors (except the Postmaster General and Deputy Postmaster General) and the Postal Regulatory Commission are appointed by the President and confirmed by the Senate.


Washington, D.C.: What percent of first class mail is delivered on time and to the correct address? How many Americans trust USPS versus private carriers? How current is this information and who collects it?

Dan G. Blair: The Postal Service collects data on First Class mail service and reports it periodically. Over the next few months the Commission will work with the Postal Service to expand the transparency of this data.


Bethesda, Md.: I still have plenty of stamps of 37-cent stamps, what do I do with them? If I need to mail something regular mail, should I put two of them on the envelope?

Dan G. Blair: Just add two two-cent stamps to the 37 cent stamp on your letter. That way you can cover the 41 cent postage. You can do that at your local post office or visit online.


Washington, D.C.: Do you confer with the President on your policies?

Dan G. Blair: The Postal Regulatory Commission is an independent executive branch agency charged with overseeing the USPS.


Richmond: I think a stamp is a great buy: for a pittance I can pay y'all to get my letter where I want quickly. I'm always surprised by letters that travel great distances in one day, etc. I sure couldn't pay a private company to get my letters where I want in one day for only 41 cents. Thanks!

Dan G. Blair: The fact that you can send a letter from Miami to Honolulu for 41 cents is a true bargain, especially when you look at the rates charged by other countries.


Washington, D.C.: Why are rates fixed when delivery costs depend on destination? It clearly costs more to send the letter cross country than down the street, for example.

Dan G. Blair: For the First Class stamp, federal law requires a uniform rate across the country. This policy ensures affordable rates for everyone. However, for other classes of mail, rates can vary with distance.


Virginia: I checked the USPS Web site but am having trouble finding rate info for other than domestic stamps. For example, I assume the rate went up for mail to Canada, but I cannot find the new rate posted anywhere? Thanks!

Dan G. Blair: I bet the USPS Web site is one of the most popular sites on the Web today. Try looking under "International" to review the rates.


Washington, D.C.: Congratulations to you, sir, on your relatively new role as Chairman of a truly "regulatory" commission. What would you say is the most significant new authority your agency has?

Dan G. Blair: The Commission's authority was strengthened to ensure greater transparency of the USPS and provide for greater accountability. That law also granted the Postal Service flexibility to set rates in the future.


Alexandria, Va.: You said: "Generally, magazines and newspapers pay about 30 cents per piece on average, depending on size, shape, weight, etc. This is 11 cents below the new rate for the First Class stamp."

So, when mailing a bill, instead of affixing a 41 cent stamp to a #10 envelope, I should wrap it up in an old magazine and send it for 30 cents?

Dan G. Blair: Nice try. No, that won't work.


Dan G. Blair: Thank you to The Washington Post and your readers this morning. I appreciated the chance to field your questions and look forward to the opportunity to chat with your readers again. Have a great day!


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