WASHINGTON (Reuters) -Surging inflation will prompt the U.S. Postal Service to seek higher prices for stamps and other services in January, just five months after its recent hike, as it continues to lose money.
USPS raised prices in July by about 6.5%, including increasing the price of a first-class stamp from 58 cents to 60 cents after hiking stamps by 3 cents in August 2021.
U.S. Postmaster General Louis DeJoy said Tuesday inflation would cause costs to exceed its 2022 budget plan “by well over $1 billion.” DeJoy said he plans to recommend to the Postal Board of Governors that USPS raise prices again in January.
DeJoy has said USPS for years had failed to charge enough for package and mail delivery.
USPS on Tuesday booked a onetime, non-cash benefit of $59.6 billion after President Joe Biden signed financial relief legislation into law. It reported an adjusted loss of $459 million for the quarter, compared to an adjusted loss of $41 million for the same quarter last year.
DeJoy said the Postal Service is working to address some hiring issues but is having success in most areas as it has boosted full-time permanent staff.
“This will enable us to rely less on seasonal employees, which we believe will prove difficult to hire this season,” DeJoy said. “We are still having trouble in hiring new letter carriers, especially in rural communities. We are employing new recruiting tactics.”
Struggling with diminishing mail volumes despite having to deliver to a growing number of addresses, the USPS before Tuesday had reported net losses of more than $90 billion since 2007. The bill Biden signed in April repealed the USPS’s requirement that it annually prepay future retiree health benefits and canceled all past due prefunding obligations.
DeJoy released a March 2021 reform plan that aims to eliminate $160 billion in predicted losses over the next decade.
DeJoy said despite reforms losses would still reach $60 billion to $70 billion over the next 10 years — and USPS must address those losses.
USPS is also set to receive $3 billion from Congress to boost electric vehicle and charging purchases. Last month, USPS said it plans to buy at least 25,000 EVs – more than twice its prior estimate.
Source: Economy - investing.com
