Money Orders — Are a special service that offer a safe, convenient, and economical alternative to sending cash through the mail. They can be purchased at any Post Office or from any rural route carrier. Postal money orders are available for any amount up to $1,000. Money orders can be cashed at any Post Office or can be deposited or negotiated at financial institutions. Money orders are replaced if damaged, lost, or stolen.
Shipping Services
Priority Mail — Priority Mail is offered in both the United States and abroad. The domestic offering is a 1–3 day nonguaranteed delivery service and is typically used to send documents, gifts, and merchandise. Priority Mail International provides customers with a reliable and economical means of sending correspondence and merchandise up to 70 pounds to over 190 countries and territories worldwide.
Express Mail — Includes Express Mail and Express Mail International. Express Mail is the domestic offering. This overnight, money-back guaranteed service includes tracking, proof of delivery, and insurance up to $100. Delivery is offered to most destinations and is available 365 days a year. A surcharge is added to the price for Sunday and holiday delivery. Commercial prices and volume rebates are available to customers meeting certain volume thresholds. Express Mail International offers fast delivery service to over 190 countries with service guaranteed to select destinations.
Parcels — Parcel Select and Parcel Return Service are two programs designed to provide economical means of shipping packages. By taking advantage of the “first mile and last mile” aspect of the Postal Service, Parcel Select saves customers money by sorting packages closer to their ultimate destination; while Parcel Return Service is a workshare discount program where our customers go to selected sites to retrieve packages sent back to them from their customers. Parcel Select and Parcel Return Service allow us to partner with other companies to serve our respective customers’ needs.
Details on our revenue by mailing, shipping, and other categories are found in the Operating Statistics Section.
Pricing and Classification Activity
P.L. 109-435 gave the Postal Service new flexibility in setting price and classification changes. Prices are set by the Governors and are approved by the PRC to be in compliance with the new regulations enacted as part of the law. We plan to adjust prices for our Mailing Services annually in May, with increases no higher than that of the rate of inflation. We plan to provide at least 90 days’ notice of the new prices for Mailing Services.
On February 11, 2008, we announced a May 12, 2008 price adjustment for Mailing Services — First-Class Mail, Standard Mail, Periodicals, Package Services, and Special Services. The average increase by class of mail was at or below the 2.9% rate of inflation, calculated using the CPI-U for the past 12 months using an averaging method approved by the PRC. The First-Class Mail stamp price was increased from 41 cents to 42 cents. For the first time, customers could use the Forever Stamps they purchased before the price change, after the price change without adding additional postage.
Prices for Shipping Services must cover each product’s attributable costs, as well as an appropriate share of the institutional costs of the Postal Service. For 2008, the institutional cost coverage percentage, determined by the PRC, was 5.5%. The new pricing flexibility provided by the law allows us for the first time to utilize contract prices, rebates, online price reductions, and other incentives to encourage growth. Prices must be announced at least 30 days prior to the implementation date. We provided 60 days notice prior to the May 12, 2008, price adjustment for Shipping Services.
Highlights of the Shipping Services price adjustments are described below. Express Mail was changed to a zone-based pricing system, with customers paying less for nearby destinations. Customers also receive a 3% price reduction for purchasing Express Mail online or through corporate accounts. Additional price reductions became available for those who ship quarterly minimum volumes. Priority Mail offers a 3.5% savings for customers who use electronic postage or meet other requirements. Parcel Select — our “last mile” delivery to every door — features pricing and volume incentives for large and medium shippers. Parcel Return Service moved entirely to a weight-based pricing system, resulting in significant price reductions for many lighter packages.