Market Dominant Product Pricing

According to the Postal Accountability and Enhancement Act of 2006, Mailing Services prices, on average, can increase no more than the rate of inflation based on the Consumer Price Index for an Urban Family (CPI-U). There are provisions in the law that allow for increases above CPI-U in exceptional or extraordinary circumstances. This is known as an exigent price change. Facing serious financial challenges and lack of Postal Service reform legislation in Congress, in September 2013, the Postal Service Board of Governors voted to seek price increases in 2014 above the annual increases associated with changes of the CPI. The Postal Regulatory Commission approved the CPI price change of 1.7 percent and a temporary exigent increase of 4.3 percent as a surcharge.

The PRC authorization dictates that this surcharge will remain in effect only until an additional $3.2 billion of incremental revenue above what the Postal Service would have recovered through a CPI-U increase alone is generated.

The Postal Service has filed an appeal with the U.S. Court of Appeals for the District of Columbia asserting that the PRC erred in its decision to limit the duration of the exigent price increase. The outcome of this appeal cannot be determined at this time.

In January 2014, overall Mailing Services prices increased by an average of 6 percent. The Postal Service increased the price of a 1-ounce letter by 3 cents to 49 cents. Prices also increased for postcards, large flat envelopes and First-Class Mail presort letters and cards. The price for a 1-ounce letter to all international destinations increased to $1.15.

In September 2014, 1.2 million Post Office Boxes were moved from Market Dominant to Competitive.