The United States Postal Service (USPS) initiated new postage rates that went into effect on January 24, 2021. The Postal Regulatory Commission (PRC) approved and finalized these rates after the USPS announced them on October 9, 2020. With that, the USPS postage rate has once again increased.
These price increases are usually based on the Consumer Price Index (CPI). The U.S. Bureau of Labor Statistics defines this as a “measure of the average change over time in the prices paid by consumers for a market of consumer goods and services.” In other words, the more people pay for their products, the higher the postage rates.
Consumer means often fund operating costs due to the USPS not receiving tax dollars for operating expenses. This year’s unexpected situations threw the USPS for a loop. More of the population went online shopping due to the COVID-19 pandemic. The November election processed millions of mail-in ballots. The holiday season had shoppers sending millions more packages than ever before. Many intended recipients have still not received their packages due to the overwhelming volume.
The USPS states that prices are adjusted according to “market conditions.” The market conditions described above contribute to a rise in demand for services and explain why changes in postal rates occur.
Changes in postage rates for each passing year are not a new phenomenon. Understanding why these rates change, however, is good for us to review every year.
We have listed below some of the highlights of the 2021 USPS rate increase for customers buying postage online for domestic letters and packages.
