The United States Post Office has expectations to raise the price of postage by three cents. The overall cost will then be 49 cents to mail a simple letter. The new rate hikes according to CNN will definitely help add cash to the Post Office’s bottom line.
More than other government agencies, the Post Office is in the red. Their plan for the hikes may raise upto $2 billion dollars for the agency.
Mickey Barnett, chairman of the Postal Service Board of Governors commented on the potential rate hike. “Of the options currently available to the Postal Service to align costs and revenues, increasing postage prices is a last resort that reflects extreme financial challenges.”
The post office reported this last quarter losses of around $740 million dollars. Last year, a loss of $5.2 billion was reported, but the agency lost $16 billion. This fiscal year, the Postal Service has lost almost $4 billion dollars. Future retiree health care benefits have become a major problem for the agency, as the postal service has exhausted a $15 billion dollar loan to make up for the difference. The declining post office revenues stem from changes in how communications are made in today’s technological age. The post office reportedly handled 37.9 billion pieces of male between April and June, down from 38.3 billion last year.