The Postal Service Board of Governors has announced a rate change that will be effective on June 30, 2002. Along with the changes in rates, there will be several important mail classification and discounted rate qualification changes that will affect all classes of mail.

Why do postal rates increase? Postal costs go up just like those of any other business. Recent increases in costs for fuel and health benefits greatly affected the Postal Service. The financial impact of the terrorist events of last year and the resulting additional expense required to safeguard the mail has added unforeseen costs. In addition, the Postal Service adds 1.6 million new deliveries each year. Despite many recent gains in productivity, increased use of automation and cost savings realized from contracting certain functions, delivering mail to every household in the United States six days a week is an expensive task.

The Postal Service receives no tax dollars for operations and relies solely on the sale of its products and services to cover its operating costs. The Postal Reorganization Act of 1970 shifted ratemaking authority from Congress to two presidentially appointed bodies: the Postal Service Board of Governors and the Postal Rate Commission. Whenever the Postal Service determines that it is necessary to raise its rates, the staff must first convince the Board of Governors of the need for additional revenue. The Board, in turn, presents the rate change request to the independent Postal Rate Commission, which holds public hearings on the request. During these hearings, interested parties – customers, competitors, mailing groups, and major mailers – have the opportunity to provide evidence and arguments to the PRC reflecting their respective concerns.

The Postal Rate Commission has up to 10 months to conduct in-depth hearings before it makes a recommendation back to the Board of Governors. The Board may order the new rates into effect or modify the PRC’s recommendation. Typically, the entire process of raising postal rates takes about 1½ years from the development of Postal Services proposals to actual implementation. Competitors, such as UPS and FedEx, do not have such statutory requirements and can thus react almost overnight to changing economic conditions. The latest postal rate change reflects an overall average increase of 7.7%. However, U.S. postage rates will remain among the lowest of the industrialized countries in the world. The price of a one-ounce letter will become 37 cents and a post card will be 23 cents. The cost of each additional ounce will remain at 23 cents. Other new rates of interest to businesses are as follows:

*Priority Mail $ 3.85 (1 pound) *Certified Mail $ 2.30

*Express Mail $13.65 * Return Receipt $ 1.30

Rates for international mail have not yet been announced since any changes must be approved by the International Postal Union.

Non-denominated stamps for the rate change implementation are expected to be available at the Nokesville Post Office on June 17th. The printed denominated 37cent stamp will not be available until late July or early August.

Peter Jacobius, Postmaster