Prepare for July 2022 Postal Price Increase

As we mentioned in previous blogs, the USPS plans to implement twice yearly price increases for Market Dominant Products. For 2022, there will be only one increase, since the Market Dominant products received an increase in August of 2021.

The USPS plans to file for this year’s increase in April 2022, with an implementation date of July 10, 2022.

Then, starting in 2023, the USPS plans to implement price adjustments twice a year – in January and July.

Market Dominant products include First-Class Mail, Periodicals, USPS Marketing Mail, Package Services (including Bound Printed Matter, Library Mail and Media Mail), and Special Services.

The USPS price authority consists of five factors: Consumer Price index (CPI), Density (amount of increased addresses to deliver to vs declining mail volumes), Retirement (USPS must pre-fund their employee retirement obligations), Non-Compensatory (the mail classes not currently covering their costs), and Bank (the amount of rate authority the USPS did not use in past price increases).

It’s never easy being the bearer of bad news, but better to be prepared than be caught unaware. Bottom line, mailers should be planning for a postal increase in the 6 to 9% range, effective on July 10, 2022. Some mail classes may see increases lower than this, some may see increases higher than this, especially mail classes that are not covering their costs, such as Periodicals and Package Services. In Marketing Mail, Flats are not covering their costs, so we expect higher increases for those categories. Our best estimates by class are shown below:

First-Class Mail: 6.4% increase
USPS Marketing Mail Letters: 6.4% increase
USPS Marketing Mail Flats: 8.4% increase
Periodicals: 8.4% increase

Once the USPS files their rate proposal in April, we will have better estimates. For now, we recommend that mailers plan for increases in these general ranges starting on July 10, 2022. We will continue to keep you posted as new information is available.

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