Postal Service Is Close to a Deal To Raise Rates as Soon as Midyear
The U.S. Postal Service and the country's largest mailers are close to agreeing on a compromise that would boost postage rates as soon as June but stave off an even bigger increase threatened by the post office in the wake of the Sept. 11 terrorist attacks and the recession.</br></br>The deal, which includes accepting the Postal Service's proposal of late September to raise the price of a first-class stamp to 37 cents from 34 cents, follows two months of negotiations aimed at avoiding skirmishes that usually cause the rate-setting process to drag on for about a year.</br></br>The settlement calls for the higher rates to take effect at least three months earlier than the October implementation the Postal Service originally projected, giving the agency a much-needed revenue infusion. The agency reported a $1.7 billion loss for the fiscal year ended Sept. 30, 2001, and it has predicted a similar result for the current fiscal year.</br></br>The compromise still must clear several hurdles and could fall apart if not enough of the 58 companies, industry groups and other parties in the pending rate-increase case support the deal. A Postal Service spokesman said about two-thirds of the parties had indicated by yesterday's deadline they would go along with the settlement; the agency's board will decide early next week whether to endorse the deal, which it is expected to do.</br></br>Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association, the largest trade group for the direct-mail industry, said there are "a significant number of major parties that have at least informally stated that they would sign the agreement . . . [or] will not oppose it." Mr. Cerasale's group agreed to the compromise after the Postal Service abandoned its push for a settlement that would have boosted postal rates June 2, instead of the current plan of no sooner than June 30, giving mailers more time to prepare for the rate increases.