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Postal Service Seeks Record Price Hikes To Bolster Falling Revenues

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Postal Service seeks record price hikes to bolster falling revenues

Lydia DePillis byline

By Lydia DePillis, CNN

 

Updated 5:33 PM ET, Wed October 10, 2018

 
 
A letter carrier prepares mail for delivery at the United States Postal Service Joseph Curseen Jr. and Thomas Morris Jr. processing and distribution center in Washington, D.C., U.S., on Tuesday, Dec. 12, 2017.
 
A letter carrier prepares mail for delivery at the United States Postal Service Joseph Curseen Jr. and Thomas Morris Jr. processing and distribution center in Washington, D.C., U.S., on Tuesday, Dec. 12, 2017.

(CNN)The US Postal Service is asking for the biggest price jump on stamps in its history.

Facing pressure from the Trump administration to address a revenue shortfall, the Postal Service on Wednesday proposed raising the price of 1-oz. letters from 50 cents to 55 cents, which would be a record nominal increase if approved. The price of each additional ounce would go down slightly.
The request was made by the USPS' board of governors, which has been operating on an emergency basis because of a lack of confirmed members. It will have to be approved by the Postal Regulatory Commission.
"The Governors believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue," the USPS said in a press release. "The Postal Service has some of the lowest letter mail postage rates in the industrialized world and also continues to offer a great value in shipping."
 
 
     
     
    Rates for mailing services -- which includes catalogs and magazines as well as letters -- are pegged to consumer prices. Those have been rising faster this year, but still limited the price hike for that category to 2.5 percent.
     
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    Prices for packages, however, can float with market rates. The USPS wants to boost Priority Mail prices by an average of 5.9%. A small flat-rate box that costs $7.20 to ship, for example, would next year cost $7.90.
    The steep price increases come at a time when the USPS' losses have been mounting, dragged down in part by a requirement that the quasi-public agency pre-fund the cost of retiree health benefits.
    As letters and advertising mailers have been replaced by e-mail and online ads, the USPS has been making less and less money. Revenue from first class mail declined from $28.4 billion in fiscal year 2015 to $25.6 billion in 2017.
    Package revenues fueled by the rise in e-commerce have been a bright spot, bringing in $19.5 billion in 2017, up from $15 billion in 2015. But it hasn't made much of a dent in the $58.7 billion net deficit that the Post Office has accumulated over the years.
    The White House has proposed privatizing the Post Office, a plan that postal unions protested in nationwide demonstrations on Monday.
    President Donald Trump has repeatedly criticized the terms of USPS' contract to deliver Amazon packages, the details of which are confidential. The Postal Service says it makes a profit through the arrangement.
    "Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?" Trump tweeted last December. "Should be charging MUCH MORE!"
     
      In April, Trump ordered a review of the Postal Service's business model by a task force led by the Treasury Department. Postal Service spokesman Carl Walton says the review has been completed, but that the agency hasn't seen it yet.      
      "I think they're waiting until after the elections," Walton said. "We're waiting just like everybody else."                                                                                                                                                                                  https://www.cnn.com/2018/10/10/business/us-postal-service-stamp-price-hike/index.html                                               

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      What I find amusing is privatized delivery companies make money, while the USPS does not, but the privatized companies USE the USPS many times to deliver their packages!  Equally amusing is continuing mail service on Saturdays and package deliveries on Sunday!

      Paper is becoming archaic, though it will take several more generations till it is gone completely.  Until then, in my opinion, as a business owner, delivery needs scaled back from the weekends and if something is so critical that delivery is needed, do as the private companies do, charge extra!  Further, I would like to see, for the duration of time that paper mail exists, infinitely better post office service, meaning clerks that adapt to stepping in and helping, when the lines extend out the door.  How about a special counter for those that bring in dozens of packages for mailing?

      If I were to complete a customer satisfaction survey on the USPS, I would give the normal route delivery an A for my home and a C- for my business.  For counter service, I would give a D.  For those that question if I have ever expressed my satisfaction/dissatisfaction to our local postal office, I have, multiple times.  In fact, for one delivery issue to my business, after multiple local calls, I told the local postmaster, that if their issue wasn't corrected, I would be going to the regional postmaster.  Problem immediately solved.


      The lamps are going out all across America and we may never see them lit again in our lifetime....

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      59 minutes ago, jaman said:

      Did you know that Dianne Feinsteins husband (personal company) owns 56 regional US POstal Service warehouses?  Worth $950 million.  Sounds like a fleecing to me.

      Did you also know that Diane Feinstein died 3 years ago?  It's a real "Weekend at Bernie's" situation.

      I send 1 letter a month.  All of my bills are on my credit card...easy peasy.

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      3 hours ago, jaman said:

      Did you know that Dianne Feinsteins husband (personal company) owns 56 regional US POstal Service warehouses?  Worth $950 million.  Sounds like a fleecing to me.

      Misleading fake news. :nono:

      Richard Blum, Dianne Feinstein's husband, chairs a company that brokers sales of USPS facilities. 

      In July 2011, the Postal Service entered into an exclusive contract with the real estate firm CB Richard Ellis Group Inc. (CBRE) to sell surplus Postal Service properties. Blum, Sen. Dianne Feinstein’s husband, is the chairman of the company’s board of directors. As a member of the board of directors, he received $157,000 in cash and stock awards from CBRE Group in 2012. His investment firm, Blum Capital Partners, L.P., is also the real estate firm’s fifth largest institutional shareholder. As of May 2013, it held more than 15 million shares worth an estimated $3 billion. However, this amounts to about 4.5 percent of CBRE Group’s total shares. CBRE Group is the largest commercial real estate firm in the world. Its Postal Service contract is responsible for a fraction of that revenue, and just a fraction of that fraction is passed on to shareholders.

      It isn’t accurate to say Richard Blum is “solely in charge” of CBRE or he “owns” the company, as CBRE is headed by President and Chief Executive Officer Robert E. Sulentic and is a public company whose shares are owned by many different individuals and institutional stockholders. However, it is indeed true that Richard Blum is both CBRE’s chairman and the husband of a U.S. senator, and Blum Capital, a private equity firm founded by Richard Blum, is one of CBRE’s larger institutional stockholders.

      However, Senator Feinstein holds no position in the Congress that provides her with any particular control or authority over the U.S. Postal Service (such as sitting on the Senate Committee on Homeland Security and Governmental Affairs, which has jurisdiction over the Postal Service).

      Postal Service spokeswoman Sue Brennan said that seven different firms participated in competitive bidding for the USPS contract, and CBRE Group was chosen because it “was the contractor with the best overall organization, capability and experience.”

      ETA: did I miss the grand reopening of the D&P forum? :huh:

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      22 hours ago, sapphire said:

      Misleading fake news. :nono:

      Richard Blum, Dianne Feinstein's husband, chairs a company that brokers sales of USPS facilities. 

      In July 2011, the Postal Service entered into an exclusive contract with the real estate firm CB Richard Ellis Group Inc. (CBRE) to sell surplus Postal Service properties. Blum, Sen. Dianne Feinstein’s husband, is the chairman of the company’s board of directors. As a member of the board of directors, he received $157,000 in cash and stock awards from CBRE Group in 2012. His investment firm, Blum Capital Partners, L.P., is also the real estate firm’s fifth largest institutional shareholder. As of May 2013, it held more than 15 million shares worth an estimated $3 billion. However, this amounts to about 4.5 percent of CBRE Group’s total shares. CBRE Group is the largest commercial real estate firm in the world. Its Postal Service contract is responsible for a fraction of that revenue, and just a fraction of that fraction is passed on to shareholders.

      It isn’t accurate to say Richard Blum is “solely in charge” of CBRE or he “owns” the company, as CBRE is headed by President and Chief Executive Officer Robert E. Sulentic and is a public company whose shares are owned by many different individuals and institutional stockholders. However, it is indeed true that Richard Blum is both CBRE’s chairman and the husband of a U.S. senator, and Blum Capital, a private equity firm founded by Richard Blum, is one of CBRE’s larger institutional stockholders.

      However, Senator Feinstein holds no position in the Congress that provides her with any particular control or authority over the U.S. Postal Service (such as sitting on the Senate Committee on Homeland Security and Governmental Affairs, which has jurisdiction over the Postal Service).

      Postal Service spokeswoman Sue Brennan said that seven different firms participated in competitive bidding for the USPS contract, and CBRE Group was chosen because it “was the contractor with the best overall organization, capability and experience.”

      ETA: did I miss the grand reopening of the D&P forum? :huh:

      Looks like washington insider trading for personal profit of the USPS by a company owned by her husband. CBRE was chosen because her husbands board  stock ownership interests. Its a factual statement , not a debating statement. (your own statement backs it up) AS we  know in Washington you dont have to be on the exact committee. A couple well placed phone calls to senate colleagues will do. Everybody in the swamp participates. Its nice to have a spouse who can "arrange"contracts that is a US Senator.

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      6 minutes ago, jaman said:

      Looks like washington insider trading for personal profit of the USPS by a company owned by her husband. CBRE was chosen because her husbands board  stock ownership interests. Its a factual statement , not a debating statement. (your own statement backs it up) AS we  know in Washington you dont have to be on the exact committee. A couple well placed phone calls to senate colleagues will do. Everybody in the swamp participates. Its nice to have a spouse who can "arrange"contracts that is a US Senator.

      Information is power.  Insider information is even more powerful.  A large circle of influence is critical to survival in politics and apparently she does that well.

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      13 hours ago, Harvey Mungaknuts said:

      Why not charge the junk mailers an astronomical amount.     And maybe eliminate the delivery of the junk mail

      I agree with your thought, in principle.  Yet I'm not sure the result wouldn't be more spam and popup ads on our computers and smart phones.  Pretty sure I'm not going to be happy with that either.

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