The Postal Service continues to drive innovations that give consumers more control over the mail they receive, make direct mail simple to send, enable multi-media touch points and reinforce the resiliency of mail as a trusted, effective communications channel.
Stamp Program — The Postal Service continues to issue postage stamps as a convenient and secure payment method for consumers. While more customers may be using postage they can print themselves at home or at work — especially when discounts are being offered — the basic postage stamp remains popular with consumers and collectors worldwide.
The “Forever” stamp concept was first introduced in April 2007 with a stamp featuring the image of the Liberty Bell and was designed for consumers’ ease of use during price changes. In FY2011, all domestic First-Class 1-ounce stamps became Forever stamps with the exception of stamps in coils of 3,000 and 10,000, and those formats were added to the Forever program in FY2014. Forever stamps sell for the basic First-Class Mail 1-ounce price in effect at the time of sale.
A Global Forever stamp was introduced in 2013, offering a single price for any First-Class Mail International 1-ounce letter to any country in the world. Global Forever stamps may also be used to mail a letter up to 2 ounces to Canada.
In FY2015, we took the “Forever” stamp concept one step further and extended this convenience to customers needing stamps for mailing items weighing more than 1 ounce as well as for postcards and bulky or odd-sized envelopes that require hand sorting. The new “additional-ounce” Forever stamps will always be equal in value to the applicable price for the price category printed on them at the time of use. Customers purchasing these Forever stamps can easily determine their use by the descriptions on the stamps: “additional-ounce, postcard, non-machinable surcharge, 2-ounce and 3-ounce.”
In FY2015, 28 new stamps were issued with 72 designs recognizing American history, culture, people and achievements. Some of the stamps issued — as part of the Postal Service’s annual stamp program — paid tribute to individuals as diverse as Wilt Chamberlain, Robert Robinson Taylor, Martin Ramirez, Maya Angelou, Elvis Presley and Paul Newman. Other stamps issued included these subjects: Batman; From Me to You; The War of 1812: Battle of New Orleans; The Civil War: 1865; Medal of Honor: Vietnam; United States Coast Guard; Special Olympics; and a social awareness stamp for Missing Children. Additionally, the Postal Service jointly issued stamps with Japan Post (Gifts of Friendship) and Sweden Post (Legends of Hollywood — Ingrid Bergman). Batman proved to be the biggest selling commemorative stamp issuance of the year with sales over $26 million. Batman was followed by Missing Children, From Me to You, Maya Angelou and Gifts of Friendship, which all generated over $10 million each. Our biggest-selling stamps, featuring Flags and Holiday themes, had much greater sales.
The Postal Service also is authorized by Congress to issue semi-postal stamps that are used to help raise funds for designated causes. The price of a semi-postal stamp pays for the First-Class Mail single-piece postage price in effect at the time of purchase and reasonable reimbursement of costs to the Postal Service, plus an additional charge. This additional charge (or “differential”) helps fund causes designated by Congress, with money going to a congressionally selected executive agency or agencies.
Four semi-postal stamps have been issued since the program began in 1998. Since inception of semi-postal stamps to the beginning of FY2015, a total of $96.2 million had been raised. In FY2015, an additional $2.1 million was raised bringing the total to $98.3 million. The two semi-postal stamps on sale in FY2015 were the BCR and Save Vanishing Species stamps.
In FY2015 sales for the Breast Cancer Research stamp were over $9.7 million, raising nearly $1.8 million. This brings the total raised for BCR to over $81 million since 1998. By law, 70 percent of the net amount raised is given to the National Institutes of Health and 30 percent is given to the Medical Research Program at the Department of Defense.
In FY2015 sales for the Save Vanishing Species stamp were over $1.7 million, raising over $326,000 for the Multinational Species Conservation Fund (MSCF). This brings the total raised for MSCF to nearly $2.9 million since September 2011.
For more information about the Postal Service stamp program, visit www.usps.com⁄stamps.
Promotions — The Postal Service annually offers promotions designed to create excitement about mail and provide multiple opportunities for mailers to enhance the value of their mail. In FY2015, the Postal Service launched several promotions designed to help marketers engage their customers by using dynamic color print mobile technology as well as traditional and innovative mail techniques.
Every Door Direct Mail (EDDM) — Every Door Direct Mail (EDDM) service is an easy, cost-effective way for marketers to reach potential customers near their businesses. Using an online mapping tool available at usps.com, mailers can select individual postal routes for delivery to every household on those routes. They also can refer to demographic data in choosing routes. In February 2015 this tool was optimized for viewing on mobile tablet devices. With EDDM Retail, customers can pay for and enter their mail at the retail counter using simplified mailing preparation. Since its launch in April 2011, EDDM has generated over $1.7 billion in revenue and nearly 11 billion mailpieces from mailers across the country.
Market-Dominant Product Pricing and Classification — Our Mailing Services, which include First-Class Mail, Standard Mail, Periodicals and certain parcel services, account for approximately 76 percent of our annual operating revenues. Price increases for these services are generally subject to a price cap by class of mail based on the Consumer Price Index for All Urban Consumers (CPI-U). Our Board of Governors sets the prices, which are reviewed by the PRC. Prices for certain Mailing Services increased an average of 1.9 percent in May 2015, 1.7 percent in January 2014 and 2.6 percent in January 2013.
Price Increases — On May 7, 2015, the PRC approved price increases for the Market Dominant products of Standard Mail, Periodicals and Package Services. Previously, the PRC had approved price adjustments for First-Class Mail and extra services. The average price increases, which became effective May 31, 2015, were slightly below the CPI-U price cap of 1.966 percent. We expect these price increases to generate approximately $900 million in annualized contribution.
Exigent Surcharge — In December 2013, the PRC ruled that the Postal Service could collect an exigent surcharge to recoup revenues lost due to the Great Recession’s impact on mail volume. The surcharge revenue is in addition to revenue that the Postal Service would generate solely from a price increase based on CPI-U.The PRC determined the value of this lost revenue to be $3.2 billion in incremental revenue, and $2.8 billion in contribution. The ruling also stated that when this revenue amount is reached the Postal Service must remove the surcharge from their prices.
As a result of the ruling, the Postal Service implemented a 4.3 percent temporary exigent surcharge on Mailing Services in January 2014. That same month, the Postal Service filed an appeal of the PRC ruling in Federal Court. In June of 2015, the Federal Appeals Court ruled in favor of the Postal Service’s appeal. They remanded the case back to the PRC to review the total amount of surcharge originally awarded. In their review the PRC determined that the Postal Service was due an additional $1.4 billion in revenue. The new total incremental revenue target number for the exigent surcharge is $4.6 billion. In FY2015, the Postal Service collected $3.5 billion in incremental revenue from the surcharge. We expect the surcharge to remain in effect until approximately April 2016, absent a successful appeal.
