The United States Postal Service increases its rates today. Domestic rates last increased in 2002, and international rates were last comprehensively increased on January 7, 2001. The overall domestic increase is 5.4%, the overall international rate increase is 5.9%.
The costs of a stamp for an ordinary sized first class letter of up to 1 ounce increases from 37 cents to 39 cents. Each additional ounce is now 24 cents (up one cent per ounce). A priority mail flat rate envelope goes from $3.85 to $4.05. An express mail flat rate envelope goes from $13.85 to $14.40. Domestic money orders up to $500 are now 95 cents. Traditional certified mail, return receipt service has gone from $4.05 to $4.25 in addition to postage.
Global priority mail is now $5.25 ($4.25 to Canada and Mexico), A one ounce air mail letter is 64 cents or 84 cents depending upon its destination. Aerogrammes are 75 cents, post cards are 75 cents (55 cents to Canada and Mexico). International money orders are now $3.45.
Given four to five years of moderate inflation and significantly increased fuel costs that have resulted in fuel surcharges from private delivery services, this is pretty reasonable. The price increases fund an "escrow account" that appears to be designed to operate as a rainy day fund for the postal service, and wouldn't even be required to fund current services. Virtually all funding for the postal service comes from postage and other service fees.
The post office is organized as an independent corporation with a Presidentially appointed board of directors that must receive approval from a Presidentially appointed commission for fee increase requests. Thus, it is basically organized as a publicly owned utility.
The United States Postal Service continues to offer postage rates among the lowest in the developed world, despite having a much larger service area.
The cost of an economy rate domestic letter in euro-cents (today a Euro is worth about $1.21) is as follows:
Germany 55 (67 cent U.S.)
Finland 55 (67 cents U.S.)
France 53 (64 cents U.S.)
Greece 47 (57 cents U.S.)
Italy 45 (54 cents U.S.)
Beglium 44 (53 cents U.S.)
Netherlands 39 (47 cents U.S.)
In Canada, a domestic letter costs 50 Canadian cents (a Canadian dollar is about 86 cents), i.e. 43 cents U.S. In Australia 50 Australian cents (an Australian dollar is worth about 74 cents), i.e. 37 cents U.S. A domestic letter in Japan costs 80 Yen (a dollar buys about 116 Yen), i.e. about 69 cents U.S.. In the U.K. a domestic letter costs 21 pence (one pence is worth 1.76 U.S. cents), i.e. about 37 cents U.S. In Mexico a domestic letter is 6.5 Pesos (a Mexican peso is worth about 9.5 U.S. cents), i.e. 62 cents U.S. Australia and the United Kingdom, who have domestic postal rates slightly lower than those in the United States, both have far more geographically concentrated populations than the United States and lower average costs of living.
No private delivery service offers prices that even begin to compete with a 39 cent letter. The United States Postal Service provides this competitive price at the same time that it is pretty much fully unionized, is subject to a mandate to provide universal service at a uniform price (for smaller items) even if it is not cost effective to do so in local cases, without a significant government subsidy, with a mandate to provide employment on a preferrential basis to military veterans, without fuel price adjustments, and paying all of its employees well over the minimum wage with full benefits for all full time employees.
For all the griping people do about the postal service, it compares very favorably to private enterprises and foreign governmental entities. And, its service is far closer to timely and accurate than most people realize. It is entrusted with billions of pieces of mail each year. The United States Postal Service is one of the best counter-examples to the claim that government owned enterprises can't be efficient and necessarily translate into higher prices and lower service quality for consumers.