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USPS to make big changes starting with rates

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CNY/NNY/S. Tier: USPS to make big changes starting with rates
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Postage stamps are now 46 cents, instead of 45. The extra penny tacked onto the price of a letter might be unnoticeable to some people, but as YNN's Andrew Sorensen reports, the Postal Service says the rate hike comes in the middle of a lot of changes they hope will make a big difference.

NEW HARTFORD, N.Y. -- Is a penny really a big deal?

"You know, it really doesn't bother me, it's a penny. I mean, how many times do we throw a penny in a jug?" asked post office customer Kelli Hickey on Monday.

To folks like Hickey, a penny can be piece of mind.

"I'd rather do things through the postal service than online. I just trust it," she said.

To others, it's a half-expected surprise.

"I woke up this morning and said, 'Did postage go up again?' and sure enough it did," fellow customer Maria Horan said.

But to the U.S. Postal Service, it's part of a way out.

"To some extent they're keeping up with inflation," explained Syracuse University economics professor Don Dutkowsky.

Their addition of one cent postage per standard letter is also an effort cope with record losses. They lost $15.9 billion last year alone.

"A couple cents is palatable for the public, here, and we've gotten used to it," Dutkowsky said.

Dutkowsky predicted the rate hike might help them out a little.

"The move here is kind of a nickel and dime move to keep pace with their operating expenses," he said.

But they have a long way to go.

"They've got bigger structural costs behind that they have to reconcile such as their pension plans down the line," Dutkowsky said.

They also have to make up for lost business to the internet and competitors.

"This is all part of what they're trying to do to stay viable," explained Dutkowsky.

Over the last ten years, the amount of mail that's actually being sent has decreased quite a bit, about 17 percent. So the hikes are risky.

"We actually went to a full electronic billing at my business, which has saved quite a bit of money," Horan said.

USPS says you can expect more yearly increases in the future, instead of every few years because of a legal change. But whether an extra penny will drive people away, or not phase them at all, will likely depend on what other measures they come up with to stay in business.

The Postal Service has also changed their rates and many of their services starting this week. You can find out more at ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP