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In Rare Move, U.S. Postal Service Will Reduce Prices

ARI SHAPIRO, HOST:

Here's a news headline we don't often hear, postage rates are about to go down. It starts on Sunday. Among the changes, first-class mail will be 2 cents cheaper. NPR's Yuki Noguchi reports on how the small change is causing big headaches for the service.

YUKI NOGUCHI, BYLINE: The USPS is very clear; this is not a discount marketing campaign.

DAVID PARTENHEIMER: This is not something the Postal Service wanted to do, but because of the Postal Regulatory Commission, we're forced to do this.

NOGUCHI: David Partenheimer is a spokesman for the Postal Service. He says forced to because that government commission is ending a temporary rate hike program that started in 2014, so the service could recoup some losses it incurred during the Great Recession.

PARTENHEIMER: This mandatory action will worsen our financial condition by reducing revenue and increasing our net losses by about $2 billion per year.

NOGUCHI: Last fiscal year, even after substantial cost-cutting, the Postal Service lost more than $5 billion. Part of its problem is that it's not a normal business, nor is it a taxpayer-funded agency. It's somewhere in between. Its rates are regulated, and it has a very expensive mandate to provide daily service to all U.S. residents. But it also competes with private carriers like UPS and FedEx. Mark Dimondstein is president of the American Postal Workers Union. He says the only winners from this rate cut are catalog companies and other mass mailers.

MARK DIMONDSTEIN: The reduction of a first-class stamp from 49 cents to 47 cents doesn't save the individual mailer much. It saves the big mailers tons.

NOGUCHI: Workers, he says, worry about the impact on their jobs.

DIMONDSTEIN: The workers want to provide the service. We want the people to get the cheapest possible postal rates that they can, but not to the extent that it undermines the institution and undermines service.

NOGUCHI: As for those who bought forever stamps at the higher 49 cent rate, sorry, no refunds. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.