USPS to raise shipping rates, hires consultancy

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Washington, D.C.—The U.S. Postal Service, which last week announced a $5.1 billion loss for its 2011 fiscal year, will raise shipping rates by 4.6% effective Jan. 22. Priority-mail fees will increase 3.1% and express-mail costs will rise 3.3%. Larger increases are scheduled for international mail and parcel-select service, mainly used by commercial shippers. The Postal Service will also introduce a new flat rate of $39.95 for express mail boxes, replacing rates based on weights and mailing distances. Unlike with mailing services prices, which will rise about 2.1% next year to match the Consumer Price Index, there is no legal cap on what the Postal Service may charge for shipping, allowing it to price those products to cover costs. In addition, the USPS has hired New York-based investment banking advisory company Evercore Partners to assist it in making operational, compensation and benefits changes to help reduce annual USPS expenses by $20 billion by 2015.
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