US Postal Service is raising stamp prices to salvage itself

The US Postal Service plans to increase the price of its first-class mail forever stamps as the agency is facing immense pressure from the Trump administration to address a revenue shortfall. It is expected that the rise in stamps would be the largest percentage hike in over three decades.

The company, which is also raising the price of its mailing and shipping services, has been facing stiff competition from private package delivery services such as United Parcel Service (UPS) and FedEx (FDX). The new rates are expected to go into effect from January 27, 2019, once approved by the Postal Regulatory Commission.

A notice has been filed by the agency’s Board of Governors with the commission for the price hike of certain mail services. If the notice is approved, stamp costs will increase by 5 cents to $0.55, rates of mailing services such as catalogs, magazines, and letters would increase by 2.5%, prices of Priority Mail Express would spike 3.9% and that of Priority Mail by 5.9%.

This could be the third consecutive annual price hike. The company believes that the new rates will provide adequate revenue and make itself more competitive. President Donald Trump has been hinting the agency to consider a price hike in May as Amazon (AMZN) has been paying much less for products shipment through the US Postal Service.

The company confirmed that the hike has not impacted the prices for the weekend or holiday delivery. The hike does not include or add the surcharge for fuel or residential delivery. The agency offers among the lowest mail postage rates despite offering great value in shipping.

Thanks to the rising dominance of the internet, the US Postal Service experienced a drop in revenue from $28.4 billion in 2015 to $25.6 billion in 2017. The agency has accumulated $58.7 billion net deficit over the years.

Meanwhile, postal unions have protested over the White House proposal of privatizing the Post Office.