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How the U.S. Postal Service Works

USPS Mail Rates

In 2020, you could send a 1-ounce letter traveling from Florida to Hawaii for just 55 cents. That's pretty amazing, considering that the letter is crossing an entire continent and a large section of ocean. Because the USPS is not supported by tax dollars, its revenue must completely cover the cost of operations, and postage prices must be set at a level to cover those costs. These costs are primarily based on the type of mail (letter, postcard, large envelope, package, etc.) and its weight. Here are some basic postage prices from 2020 [source: USPS]:

  • First-class letters — from 55 cents, with each additional ounce 15 cents
  • Postcards — 35 cents
  • Large envelopes (flats) up to 1 ounce — $1, with each additional ounce 20 cents
  • Priority Mail — from $7.50 at the post office (commercial rates are higher)
  • Priority Mail Express — from $26.35 at the post office
  • Media Mail — from $2.80 at the post office
  • Retail Ground — from $7.50 at the post office

Setting postage rates is an often-complicated process that involves the USPS Board of Governors (BOG) and an independent Postal Regulatory Commission (PRC). The BOG is responsible for identifying when a rate increase is needed. Once it has determined a need, the BOG files a formal request with the PRC. The PRC studies the request (sometimes for up to 10 months) and gives the BOG a recommendation.

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If the BOG (with the exception of the postmaster general and the deputy postmaster general, who don't vote on these recommendations) votes to approve the recommendation, an introductory date for the new rates will be established.

If the BOG doesn't completely agree with the PRC recommendation, it may allow the decision to take place under protest, which means the BOG can go back to the PRC for additional study and reconsideration, or they may request judicial review of the recommendation.

If the BOG receives a revised recommendation from the PRC, it can order the new rates to be placed into effect. If the BOG ultimately determines that revenue generated by the recommended rates will not meet operating costs, the request can be modified and resubmitted to the PRC.

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