The higher rates represent an effort by the financially troubled Postal Service to get more revenues out of its fastest growing mail segment — shipping services.
Both of its major parcel competitors,
FedEx Corp. and
United Parcel Service Inc., have publicly warned the USPS that it could risk pricing itself out of some parcel markets, such as lightweight packages, with these proposed sharp increases.
But the USPS attempted to minimize the size of the planned increases by noting that the increases are the first in three years for its commercial Priority Mail products and, if averaged, the increase would be "less than 3.3 percent per year." James Cochrane, chief marketing officer for the USPS, told
The Wall Street Journal that the agency needs a price increase on its lightweight residential parcels. With discounts offered big mailers, Cochrane said, the USPS makes only about 1¢ on each lightweight parcel it delivers. "We need to make more than a penny," he told the
Journal.
Most of the agency's "core business" is 1- and 2-pound packages, he said.
