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Postal Service requests 5.6% rate increase for 2011

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Washington, D.C.—The United States Postal Service, continuing to lose money as consumers and businesses are increasingly using electronic forms of communications, requested the Postal Regulatory Commission on Tuesday to grant it an overall 5.6% postage rate increase.

If approved, new prices would go into effect Jan. 2.

The Postal Service typically is limited to rate increases of no more than the rate of inflation, which stood at 0.9% for the 12 months ended in May. In requesting increases greater than that, the Postal Service cited its dire economic condition; in its most recent financial statement, the service reported a net loss in May of $642 million, and a loss of $2.9 billion for the first eight months of its fiscal year.

Under the proposal, first-class postage would rise from 44 cents per piece to 46 cents.

The Direct Marketing Association, the Magazine Publishers of America and the Affordable Mail Alliance, a group of businesses and nonprofits, among other business and marketing groups, have urged the PRC to reject the rate hike, with the publishers group threatening a lawsuit.

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