Higher Stamp Prices Parceled Out In Bid to Make Post Office First Class

POSTAL rates are rising. But before you gripe about paying more for a mail system that lost your cable bill and regularly rips ``Opera News'' in half, consider this: The price of stamps may not be going up enough.

At least, not enough to fix an institution dogged by sloth, fires, breakdowns, and disgruntled employees who store mail in their own apartments. The United States Postal Service has chalked up huge losses the last three years and now has a cumulative deficit of $8.3 billion. Many experts think the rate hike announced today will be followed by another attempt to increase postage in relatively short order.

``This increase is enough to last them 18 months, tops,'' says Brian Hummell, assistant director of the Alliance of Non-Profit Mailers.

Another round of hikes might accompany the Postal Service's long-awaited overhaul of its ancient mail-classification system, which is expected to be completed next year. In the age of E-mail and Internet, the Postal Service still places mail in categories it established a century ago: letters, parcels, publications, and bulk mail.

If done fairly, switching these classifications around and establishing new subcategories - ``small catalogs with bar-code pre-sorting,'' for instance - might cut costs and boost revenue.

``The classifications have not changed and the marketplace has changed radically over the years,'' says Greg Frey, a Postal Service spokesman.

The machinery leading to today's increase began moving last March, when the Postal Service sent the Postal Rate Commission (PRC) a proposal to raise many rates 10.3 percent across-the-board. The PRC acts in a manner similar to a utility-rate commission, providing a public forum to consider increases for a mail system that, as currently chartered, is essentially a quasi-commercial institution.

The PRC scheduled an announcement of its decision for Nov. 30. The announcement had not yet occurred as the Monitor went to press, but large mail customers widely assume that the PRC will approve an increase of three cents on the first ounce of first-class mail. That means it will cost 32 cents apiece for first-class stamps after the Jan. 1, 1995, phase-in date.

The last increase in the price of a first-class stamp was four years ago. That's the longest the Postal Service has gone without a hike in its flagship rate since becoming a semicommercial entity by order of Congress in the 1970s. Since the last increase, ``natural gas for heating has jumped almost 40 percent and the price for a loaf of bread is up almost 13 percent,'' said Postmaster General Marvin Runyon in a recent memo to mailers.

Indeed, the Postal Service received unusual support from large mailers for its 10.3 percent increase proposal. Big companies that send out lots of mail, such as American Express and Time-Warner, saw the proposal as a relatively small one that could save them millions of dollars in the short run.

OTHER types of mailers haven't been so happy. The Postal Service's proposal did not strictly raise rates evenly across the board, and nonprofit mailers in particular objected to the increase, figuring they could face hikes of up to 20 percent in their postal costs.

The Christian Science Monitor is a member of the Alliance of Non-Profit Mailers, the organization that pressed nonprofit objections to the Postal Service move.

With this rate hike behind them, Postal Service officials will now look to reclassification as their next big step. ``They need very much to reform their mail classification system. It's the skeleton on which all rates are based,'' says Gene Del Polito, director of the Advertising Mail Marketing Association.

The current structure contains some perversities that push mailers to use the Postal Service inefficiently, says Mr. Del Polito. For instance, it is sometimes cheaper for companies sending small catalogs to just toss them in as general, nonautomated mail. They have no financial incentive to include bar codes or other means for postal workers to use machinery.

But what the Postal Service really needs, according to Del Polito, is not a bureaucratic fix like reclassification. It's more freedom, mandated by Congress. Current law does not allow the Postal Service to make a profit. The new, GOP-led Congress might change this.

``There's going to be a lot of interest in privatization come January,'' Mr. Del Polito says.

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