Study: USPS should raise prices
The U.S. Postal Service has been making headlines recently as the federal agency starts increasing mail processing plant closures throughout the country. But new research conducted by the Postal Regulatory Commission (PRC) found the service could avert plant closures by raising prices to boost financial revenue. If the USPS raises prices on direct mail to avoid the need to close plants, businesses should consider employing address verification software to cut the increasing costs.
According to the PRC Annual Compliance Determination Report, the USPS lost $15.9 billion in 2012 and is disregarding methods of increasing revenue. The annual report assesses the agency's pricing and performance throughout the previous year and identifies strategies for growth. Since the Postal Accountability and Enhancement Act (PAEA) was put into effect in 2006, the PRC believes the act has contributed to the financial loses year after year. Through its audit, the PRC found that nine USPS products failed to generate revenues and the service has neglected various ways of balancing the budget.
Due to the inability of many USPS products to increase revenue, the service has lost $7.5 billion since 2008.
Ruth Goldway, chairman of the PRC, believes the USPS has improved from recent years but needs to identify new ways of generating revenue.
"This ACD highlights the untapped potential of the pricing flexibility available to the [USPS] under the law to address at least some of these losses," Goldway remarked.
Last year, the USPS increased prices on standard mail overall by 2.041 percent, but the study suggests it increase even more to cover fixed costs. As the USPS determines which steps are the most financially feasible, address verification software can offer businesses piece of mind in case the USPS raises mailing fees.