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Postal rate increase bumps cost of doing business

By By Sheila Blackmon/The Meridian Star
Jan. 10, 2001
A 1-cent increase in the price of postage stamps effective last Sunday will impact businesses more than residential customers, officials said Tuesday.
Postal service officials say they need the increase because they lost $200 million last year.
He said Meridian has fewer direct mail companies than most cities. Meridian's downtown post office lists about 300 "standard mailers" individuals, businesses, groups or organizations who mail in bulk.
Local companies affected might be those such as printing companies, real estate agencies, finance companies, tax collectors and those who mail periodicals. Some utility companies may see an increase, but those who use postcards won't because postcard postage prices didn't rise. Nonprofit mailers churches and nonprofit organizations will actually see a decrease in postage prices.
Swancey said the postal service is not allowed to operate for profit and must eventually break even. He said post offices aren't subsidized by taxes or government funds, leaving postage and products as their only income.
Soaring fuel prices and decreasing priority mail volumes caused the postal service to lose money last year, he said.
In past years, priority mail use has increased 11 to 15 percent annually, but last year it suffered a decline. Growth was at 2 to 3 percent. Swancey said other mail was also "slower than expected."
He said increased productivity moving more mail in less time with automated machines saved the postal service $2 billion last year, but it didn't compensate for the losses. The postal service is expected to lose about $500 million in net income this year.
Swancey said postal service officials asked the Postal Board of Governors and the Postal Rate Commission for a 6.4 percent overall increase, but got a 4.6 percent increase "under protest," which means "we didn't get all that we wanted." Swancey said they can file an appeal, and more of an increase is possible.
Swancey said automation mailing is the best way for bulk mailers to save money. They can buy software that will let them print their mailing lists with bar codes, which is sorted and delivered faster and cheaper than stamped mail because it passes through fewer human hands.
He said machines can sort 30,000 pieces of mail each hour, while 17,000 can be sorted manually. It's about 6 cents cheaper for each piece of mail.
Sheila Blackmon is a staff writer for The Meridian Star. E-mail her at