Decision nears on boosting business mailing rates

Nation's Business, July, 1998 by Steve Bates

The U.S. Postal Service will decide soon when to impose a 1-cent increase in the cost of mailing a first-class letter and will consider scores of other rate changes affecting business mailings.

In May, after 10 months of review, the independent Postal Rate Commission issued its recommendations on rate changes the Postal Service proposed in July 1997. Though the Postal Service's ruling Board of Governors is not bound legally to accept the Rate Commission's recommendations, it typically does so.

The key issue with the planned increase in the first-class stamp price, to 33 cents from 32, is when--not whether--to impose it.

Though some mailers and rate corn mission members have suggested that the Postal Service does not need to boost that rate after several consecutive years of billion-dollar-plus budget surpluses, the agency has not indicated that it will shelve the plan. The last change in the stamp price was in January 1995.

Rate commission Chairman Edward J. Gleiman said panel members see "no reason why any of the rate changes it is recommending ... should be put into effect before January 1999 at the earliest." The Postal Service governors could decide as early as June which rates to change and when to impose the changes.

Meanwhile, in May the governors selected career Postal Service executive William J. Henderson to be postmaster general, replacing Marvin Runyon, who resigned after more than five years. Henderson, 50, who was instrumental in improving the agency's on-time delivery efforts in major cities, inherits a work force of more than 800,000.