USPS is hiking the price of stamps, envelopes, and boxes this weekend to keep the postal office 'competitive'

uspsJessica Rinaldi/The Boston Globe via Getty ImagesUSPS.Jessica Rinaldi/The Boston Globe via Getty Images

  • A price hike on stamps, envelopes, and boxes from the United States Postal Service is scheduled to take hold on Jan. 27. 
  • The prices of those products will jump by several cents, but some shipments will become cheaper due to other changes. 
  • Analysts estimated that the price change, announced in October, could cost Amazon up to $1.1 billion. UPS and FedEx may also experience a hit. 

 

The United States Postal Service is hiking the prices of stamps, envelopes, and boxes. 

That will increase how much you pay at the post office, but it's slated to also affect the bottom lines at logistics companies and e-commerce giants like Amazon.

USPS' price change might cost Amazon anywhere from $400 million to $1.1 billion, Credit Suisse said when the price jump was announced in October. UPS and FedEx also use USPS delivery services, and could experience a hit as USPS bumps its prices.

"The Governors (of the Postal Service) believe these new rates will keep the Postal Service competitive while providing the agency with needed revenue," USPS said in the October announcement.

Stamps for a 1 oz. letter will go from 50 cents to 55 cents, though additional ounces will cost 15 cents instead of 21 cents. Flat rate boxes will go up by 70 cents to $1.05, and padded and regular flat rate envelopes will also increase by nearly a dollar. More detailed information on price changes can be found on the USPS website

In total, mailing services will increase by 2.5%. The USPS reassess its prices every year and often increases the cost of certain goods, a USPS spokesperson told Business Insider. The prices "are primarily adjusted according to market conditions," USPS said.

Read more: USPS is hemorrhaging billions of dollars a year and it might sell the rights to your mailbox to turn a profit

The USPS lost $3.9 billion in fiscal year 2018, according to a December 4 report from the Task Force on the United States Postal System. Its cumulative losses are nearing $70 billion.

President Donald Trump has personally urged the federal agency to up delivery prices on Amazon.

"I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy," Trump tweeted in April 2018. "Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer."

Meanwhile, USPS does not actually receive taxpayer funds. And the larger contributor to the USPS' woes is a 2006 law passed under President George W. Bush surrounding prefunding retirement benefits.

That law required the USPS to determine how much it would spend on pension over the next 75 years and quickly build up a fund to cover all of it. According to USPS' Inspector General, the new requirement to prefund retiree benefits accounted for $54.8 billion of the agency's $62.4 billion loss incurred between 2007 and 2016.

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