Pricing and Classification Activity

Postal Service prices are set by the Board and reviewed by the PRC for legal compliance. We have provided, and anticipate providing, at least 90 days notice of any new prices for Mailing Services. There were no price increases for Mailing Service products in 2010. The price of a First-Class Mail stamp is currently $0.44.

Prices for Shipping Services must by law cover costs attributable to each product, as well as an appropriate share of the institutional costs of the Postal Service. The institutional cost allocation, determined by the PRC, is 5.5% of total institutional costs in addition to 100% of attributable costs. By law, changes in Shipping Services prices must be announced at least 30 days prior to the implementation date.

Prices for Shipping Services products — including Express Mail, Global Express Guaranteed, Express Mail International, Priority Mail, Priority Mail International, Parcel Select, and Parcel Return Service — increased an average of 3.3% on January 4, 2010. On November 2, 2010, we announced that prices for Shipping Services products will increase an average of 3.6% effective January 2, 2011.

We offer contract prices, rebates, online price reductions, and other incentives to encourage growth.