The U.S. Postal Service, in a notice that will be posted in the Federal Register Wednesday, said post office boxes in 38 Connecticut zip codes, in dozens of towns from Baltic to Waterbury, will cost more because their pricing will be changed from “market dominant fee group” to “competitive fee group.”
What this means is the U.S. Postal Service is not a monopoly and there is competition from private post box providers in those areas. Usually competition leads to lower prices for a good or service. But not in this case.
David Rubin, an attorney for the U.S. Postal Service, explained that private post box companies were providing a lot of services, putting pressure on the U.S. Postal Service to do the same. And the private post office box providers are charging a lot more than the U.S. Postal Service for post box rentals, “so we are reducing that difference,” Rubin said.
The increases in fees will be between 10 percent and 20 percent.
Connecticut is not the only state that will face a U.S. Postal Service fee increase next months. Dozens of other zip codes in Massachusetts, New York, New Jersey and other states will face hikes in postal box rental rates, too.
And this is just the latest price hike. The U.S. Postal Service raised rental fees on thousands of zip codes since 2011.
It charges from a low of $12 to a high of $650 for six months rental of a post box.
“All post office boxes bring in hundreds of millions of dollars a year,” Rubin said.
That revenue is important, especially since a drop in first class postage, thanks to the Internet, has hurt the U.S. Postal Service’s financial well-being, as has a requirement it pre-fund retiree health benefits.
The Postal Service has been bleeding money, to the tune of about $19 billion over the past 18 months.
When it tried to staunch the hemorrhaging with an announcement earlier this year that it would stop Saturday mail except for packages in order to save $2 billion a year, angry lawmakers respond with budget language to block the move.