Get Ready for Higher Postal Rates

WASHINGTON – Use up those 34-cent first-class postage stamps while you can — because rates are going up to 37 cents by the middle of this summer.

The oft-bedeviled Postal Rate Commission approved a new rate arrangement Friday morning, after all the organizations and corporations that usually fight postage increases agreed that the money-hemorrhaging Postal Service needs all the help it can get.

All that's left to do is for the postal governing board to set the launch date for the new rates, probably around June 30.

Battered by the slow economy, the post office lost $1.68 billion in 2001 and was facing a $1.35 billion loss this year, despite having frozen new construction and cut 12,000 jobs.

"This decision will allow the Postal Service an immediate influx of revenue while holding rate increases to a reasonable percentage for postal customers," said Rate Commission Chairman George Omas.

In addition to the first-class rate increase, the cost of sending a postcard will jump 2 cents 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.

The agency auspiciously announced on the morning of Sept. 11, 2001, that it would seek higher rates to take effect in the fall of 2002.

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 prevention of future mail contamination.

Knowing that would plunge the post office into even worse financial straits, Omas suggested a moderate increase that the 60 or so organizations that usually fight rate hikes could accept.

In the end, all but the American Postal Workers Union signed on to the deal, avoiding months of hearings and arguments.

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-pound 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.

The Associated Press contributed to this report.