NEW YORK – The United States Postal Service (search) filed a request Friday seeking higher rates, including a two-cent increase in first-class mail, in order to help cover pension obligations and an expected decline in letter volume.
The Postal Service said the price of a first-class stamp would rise to 39 cents from 37 cents early next year if the increase is approved by the Postal Rate Commission, an independent body that oversees the post office.
The increase comes as part of a broader 5.4 percent rate rise that the Postal Service will apply to most packages.
The stamp price increase is needed to cover a $3.1 billion payment that Congress requires the Postal Service to make to its employee pension fund. The agency has sought congressional action to eliminate that requirement. If that happens, postal officials said, the rate increase request will be withdrawn.
If the increases are approved, Express Mail (search) package overnight would increase to about $14.39 from $13.65, and Priority Mail (search), a heavily promoted 2-3 day service, would rise to $4.06 from $3.85 for a 2-pound package.
The rate increases come as the Postal Service's lucrative first-class business, which generates more than half of the agency's revenue, has declined amid increased competition from e-mail and commercial delivery services such as FedEx Corp. (FDX) and United Parcel Service Inc. (UPS).
Stamp prices have increased three times since 1999, most recently rising by 3 cents in June 2002.
Reuters and The Associated Press contributed to this report.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox