Prices of American stamps are increasing again. How do they compare globally? : NPR

The U.S. domestic mail delivery market is by far the largest in the world, and a recent report found its prices are very low compared to those in other developed countries. The U.S. Postal Service said this week it wants to raise rates in July. Justin Sullivan/Getty Images .

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The U.S. domestic mail delivery market is by far the largest in the world, and a recent report found its prices are very low compared to those in other developed countries. The U.S. Postal Service said this week it wants to raise rates in July.

Justin Sullivan/Getty Images

The price of a Forever postage stamp is set to rise in July, part of a U.S. Postal Service plan to raise the price of the first-class stamp to 73 cents from the current 68 cents, a price which was just increased in January.

The 5 cent increase would take effect July 14. If approved by the Postal Regulatory Commission, it would be the sixth price increase since January 2021.

Despite this series of increases, the U.S. Postal Service Office of Inspector General says a U.S. postage stamp remains a bargain in the global market, citing much higher prices in Europe and other regions ( more on this below).

The U.S. Postal Service has been criticized in recent years for resorting to measures such as slowing mail in response to its financial problems. Last year, the Government Accountability Office credited the agency with making some improvements, but it added that the USPS “should continue to take steps to restore its financial viability and that Congress should consider additional changes to the USPS's unsustainable business model.

Are US stamps still a good deal?

The price of a first-class stamp is cheaper in the United States than in many other developed countries, according to a recent ranking by the USPS Office of Inspector General, or OIG.

The bureau compared the United States to 30 other countries selected based on country size and postal service revenue, as well as the ability to obtain reliable data. The list includes much of the European Union, as well as countries like Canada, Japan, Brazil and Russia.

In raw numbers, only four countries offered stamps cheaper than the United States. And although many postal services have raised prices in recent years, the increases in the United States have been moderate compared to most countries in the sample.

“The price of [USPS] The stamp increased 26 percent from June 2018 to June 2023 ($0.50 to $0.63),” the inspector general's report states, “which is less than half the average increase of our sample size (55 percent) during this period.

When the OIG adjusted its analysis based on purchasing power parity, a currency conversion rate used to compare the relative affordability of goods in different countries, the United States had the lowest stamp price of the 31 postal services.

Why do stamp prices continue to rise?

You wouldn't imagine: stamp prices have increased more frequently and in greater proportions. And inflation is only part of the problem.

“The Postal Service has increased the price of [first-class mail] “18 times since January 2000,” according to the OIG report, “and has increased prices more frequently in recent years, increasing them five times between January 2021 and January 2024.”

The use of first-class mail, the Postal Service's main source of revenue, has long been in decline. As of July 2007, the volume of individual first-class mail, such as bill payments, letters and cards, was 2.7 billion items. By June 2023, this volume had fallen by 68%, to reach 900 million.

This is not to say that domestic first class mail is not cost effective. In fiscal year 2022, its “cost coverage” exceeded 210%, “meaning the revenue generated was more than double the attributable cost,” according to the inspector general.

But the agency's costs have increased. So while the cost of stamps was once largely tied to inflation, the USPS now uses multiple criteria in its price increase formula, under rules that were relaxed in November 2020. The pricing equation includes now elements like density: the need for the postal service to deliver less mail but to more addresses.

The rate hike also takes into account the agency's obligation to pay pensions and health benefits for its retirees, an expense that is responsible for a larger share of the proposed new rate hike than inflation .

“This retirement rate authority is only available for 5 years,” a USPS spokesperson told NPR, adding that 2024 “is the fourth year in which the retirement authority would be used.” .

So why are American stamps always cheaper than elsewhere?

One obvious reason is scale. The United States “is by far the largest market for domestic mail delivery,” with the Postal Service “handling half of the world's domestic mail (50.2%) in 2021,” according to the OIG.

While the USPS has seen a long-term decline in usage of its main domestic mail product, the decline has been even steeper and more prolonged in other countries. So even though the U.S. agency is seeing dramatic declines in volume, it is doing better than the postal services of many other countries.

And while inflation is putting pressure on many economies around the world, some countries and their postal customers have been hit harder than others. In the case of the USPS, “the price of a stamp in the United States was 5 percentage points higher than the increase in costs of goods and services between June 2018 and June 2023,” the inspector general reported.

Among the other 30 countries in the sample, prices increased by an average of 31 percentage points above inflation during this period, according to the report.

Although the USPS gained new authority to raise its rates a few years ago, the magnitude of those increases is governed by price caps like those mentioned above. But different countries have different rules about raising postage rates, meaning some might raise prices more frequently or more significantly than the USPS.

Sources 1/ https://Google.com/ 2/ https://www.npr.org/2024/04/12/1244273973/forever-stamp-cost-price-going-up-usps-postage The mention sources can contact us to remove/changing this article

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