Postage Hike Likely in May, Says BOG

The U.S. Postal Service Board of Governors (BOG) said it expects to implement postage rate increases in May that will raise standard mail rates 9%.

This was part of the USPS plan calling for a 3.2% revenue increase and a 2.6% expense increase over the current year's forecast, which would result in $1.7 billion in net income. However, the estimated $3.3 billion escrow requirement results in a net deficiency after escrow of $1.6 billion.

The USPS's fiscal year begins Oct. 1.

The plan assumes continued slower growth in the U.S. economy and expected overall 0.5% decrease in mail volume--including a 2.8% decrease in first class mail volume, according to the USPS.

At its meeting in Washington, DC, the BOG also approved a Postal Rate Commission decision requiring that only 30% or more of a publication's basic annual subscription price is required qualify as a paid subscription.

The BOG also extended its negotiated service agreement with Capital One Services Inc. to Sept.1, 2007. NSAs provide incentives to use more first class mail and allow marketers to substitute electronic notices for actual returns of undeliverable-as-addressed mail.