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The US Postal Service (USPS) is in financial trouble. The decline in mail volumes has accelerated in the last year. At the same time, the USPS is losing market share in the package shipping market. Aging facilities and vehicles hamper efficiencies. Congress appropriated billions for electric vehicles and charging stations, but that will only cover a small percentage of the investment needed.
The response from the USPS is to raise rates – aggressively. The current plan is to raise rates twice a year, in January and July. The January rate increase will be based on the Consumer Price Index (CPI-U) and the July increase will be CPI-U plus factors for mail density and retirement payments. This tactic is driving down mail volumes at the fastest rate since the Great Recession.