Postal Rate Commission announces decision on higher rates

Americans will be paying an additional 3 cents to mail a letter this summer. <br><br>The independent Postal Rate Commission on Friday gave its approval to an unprecedented agreement on postage prices,

Friday, March 22nd 2002, 12:00 am

By: News On 6

Americans will be paying an additional 3 cents to mail a letter this summer.

The independent Postal Rate Commission on Friday gave its approval to an unprecedented agreement on postage prices, reached by the post office and nearly all of the businesses and organizations that normally fight rate changes vigorously.

All that remains now is for the postal governing board to set the date, probably around June 30.

``This decision will allow the Postal Service an immediate influx of revenue while holding rate increases to a reasonable percentage for postal customers,'' rate commission George Omas.

The approval means a first-class stamp will rise 3 cents to 37 cents, there will be a 2-cent boost in post cards to 23 cents, and most other mail charges will also rise.

Without the usual opposition, the rate commission was able to give speeded-up consideration to the Postal Service's request for new rates.

Battered by declining business in a slow economy, the post office lost $1.68 billion last year and was anticipating a $1.35 billion loss this year after freezing new construction and cutting 12,000 jobs.

The agency announced Sept. 11 it would seek higher rates to take effect this fall.

Then the terror attacks, followed by the anthrax-by-mail infections, socked the agency with hundreds of millions of dollars in additional costs for cleanup and preventing future mail contamination.

Knowing that would plunge the post office into even worse financial straits, Rate Commission Chairman George Omas suggested the post office and 60 or so organizations that usually fight it out over rates to reach an agreement all could accept.

In the end all but the American Postal Workers Union signed on to the deal, which avoided months of hearings and arguments before the agency and permitted the rapid rate decision.

The union, which represents workers who sort mail, argued that the rate increases offered giant mailers discounts for presorting mail that exceed the amount the Postal Service would save by not doing that work.

The post office responded the contention was fallacious, ``based on speculation regarding postal revenues, finances and capital investment plans.''

Organizations that would benefit from the discounts defended them. ``The settlement rates are well within lawful limits,'' argued a group including the Association for Postal Commerce, the Mailing and Fulfillment Service Association and the Recording Industry Association of America.

While many that normally oppose rate increases accepted this one, it was not always cheerfully.

Longtime rival United Parcel Service said that while it ``could find fault with a number of the rates set forth in the settlement,'' it joined in the agreement to help the post office ``respond to recent extraordinary events and return to financial stability.''

One group of businesses commented that if the case had been fully argued, its members would have fought for different rates.

``The settlement agreement represents, we believe, the best result that is possible to achieve under current circumstances,'' said the group, which included the Alliance of Nonprofit Mailers, AOL Time Warner, Coalition of Religious Associations, Magazine Publishers of America and the National Newspaper Association.

``However,'' the group added, ``the circumstances themselves _ the need for so much additional revenue so soon after the last two rate increases, based on estimates developed prior to Sept. 11, 2001 _ reflect poorly on the Postal Service.''

In addition to the 37-cent rate for the first ounce of first-class mail, other increases requested by the post office include:

_Increase the postcard rate 2 cents to 23 cents.

_A 1-pound priority mail item would rise 35 cents to $3.85.

_Increases in parcel post, with a 5-pount item costing $4.19 to $7.25 now, depending on distance, would rise to $5.03 to $9.43.

_A half-pound Express Mail item would jump $1.20 to $13.65.

_Certified mail would increase 20 cents to $2.30.

_Insurance charges would go up for most mail, depending on amount of insurance, but would be reduced for Express Mail.

_The charge for a return receipt would go up 25 cents to $1.75.