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Rain or snow won’t keep the postman from arriving, but debt might. The U.S. Postal Service is having trouble keeping its doors open as it struggles with ballooning pension payments. This year, the post office only lost $5.1 billion, but that was because some pension payments to a retirement plan scheduled for this year were allowed to be delayed. Otherwise, they might have lost $10 billion. With these numbers, it’s not a surprise that the U.S. Post Office must find ways to generate revenue, meaning a hike in their prices.

How to Balance the Budget

Unlike the federal government, the U.S. Postal service has few choices for balancing their budget. They are obligated by law to cover their expenses via their rates. Expenses for operating rise yearly with additional gas costs, but also the agency is having difficulty setting aside money for future pension payments, which they are contractually obligated to service. That means higher rates to cover these shortfalls as well. Until they are allowed other options, their hands are tied so as to comply with the laws in place.

Rates Climb

Shipping rates will increase approximately 4.6 percent. The new prices will affect commercial shipments more since parcel -select and international packages will suffer the highest increases. For regular priority mail an increase of 3.1 percent is expect. Express mail will also have a similar rate hike of 3.3 percent. The Postal Service is also trying to generate other options for people who use their services. A new $39.95 overnight box will become available. It will be for items that don’t fit in a flat-rate envelope for express shipping. That rate is still lower than some of the previous offerings and is expected to generate significant interest from small business customers. As shipping costs increase, business owners who rely on the mail service to ship their products may find themselves squeezed even more as the Postal Service continues to struggle with a financial catastrophe of its own making, unless Congress acts to allow some other solutions to balancing the Postal Service budget.

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