Consumers can’t afford another stamp price hike

Ross Marchand

The author is with the Taxpayers Protection Alliance

The U.S. Postal Service continues its uphill battle trying to convince consumers of its continued speed, reliability and affordability. But now, first-class mail consumers are being asked to pay more for an overstretched network plagued by service slowdowns.

On Jan. 22, America’s mail carrier hiked the price of first-class Forever stamps 5% from 60 cents to 63 cents after a two-cent increase (from 58 cents) in July. Taxpayers and consumers deserve a better and more responsive Postal Service that fixes its underlying issues instead of bilking them for worsening services. Until the Postal Service consolidates its network and fixes its nonsensical parcel pricing, stamp price hikes should be off the table.

Stamps are one of many products to see repeated price hikes over the past year. Consumers have had to cope with $4 gasoline, $5 for a dozen eggs, and … soon, more expensive Valentine’s Day chocolates and flowers. At least for these products, consumers know exactly what they’re getting once they cough up the extra cash.

USPS deliveries aren’t what they used to be. Delivery wait times have gotten progressively longer as part of a plan by postal leadership to cut costs over the long-term. In October 2021, new service standards went into effect that tacked 1-2 days onto 30-40% of first-class mail. The USPS’ estimated cost savings per year amount to less than $200 million, a fraction of a percent of operating costs (~$80 billion) in any given year. The price hikes and service cutbacks will only erode the USPS’ brand without making a dent in the agency’s $100 billion in cumulative net losses.

There are plenty of alternatives that postal leadership could pursue without cutting into consumer expectations. According to the Taxpayers Protection Alliance’s report on postal reform, the USPS could save more than $1 billion per year through more consistent reporting, auditing and information-sharing. 

Additionally, the struggling agency has far more processing equipment and collection boxes than it needs. And this excess network capacity diverts critical manpower away from tasks such as handling election mail. Even before Postmaster General Louis DeJoy’s term, the agency was removing more than 2,000 collection boxes a year in order to allocate labor more efficiently. But these efforts didn’t go far enough.

The IG noted in 2016 that “removing unnecessary collection boxes throughout the Eastern Area would eliminate 73,043 work hours over the next five years,” saving millions of dollars. Postmaster General DeJoy wisely ramped up removals of unneeded equipment, but an outcry fueled by postal misinformation forced him to halt these needed changes. Ramping up removals could go a long way toward creating a lean, consolidated postal network.

In addition, the agency should consider shuttering or selling post offices that are losing money and close to other, operational post offices. A 2021 report by the USPS Inspector General notes that, “Among nearly 13,000 underwater post offices, one-quarter are within three miles of another post office, and more than half are within five miles.” Closing these offices would be a welcome departure from the current approach of crude closures that leave consumers without any remaining offices nearby.

Getting the USPS back into the black will take a coordinated and dedicated effort by postal leadership and Congress. 

The beleaguered federal agency cannot and must not take the painful “shortcut” of raising stamp prices on millions of Americans. The USPS must announce an end to price hikes and commit to fundamental reforms to avert (another) taxpayer bailout.

Ross Marchand is a nonresident fellow for the Taxpayers Protection Alliance.

This commentary was provided to the News-Press by The Center Square, a nonprofit dedicated to journalism.