A week ago, early in the morning, I mailed from the local Cedar City post office, not at an out of the way collection box, some routine paperwork to the accounting office at Macmillan, using first class mail. Yesterday, I got an email from the recipient saying that it had just arrived – six days from Cedar City to New York. It cost fifty cents. If I’d sent it by UPS next day it likely would have cost me close to forty dollars; two-day UPS would have been $26.

But historically, should a simple letter cost fifty cents? In 1958, sixty years ago, first class postage was three cents. If postage had increased only as much as the inflation rate, then first class mail should only cost twenty-six cents, roughly half what it does now.

We don’t get that much first class mail, and most of that consists of bills. What we do get is lots and lots of letters from non-profits asking for money, a number of periodicals to which we’ve subscribed, and over the course of a year, close to a ton of catalogues [and this is no exaggeration because weekly, I cart them to the local recycling bin], most of which comes from companies from which we’ve never ordered anything and never will.

From reading the Postal Service rate schedule and from researching direct mail costs, it appears that each of those one pound [or less] catalogues has a mailing cost of between eighty cents and a dollar fifty.

Theoretically, the Postal Services is supposed to allocate costs of providing services according to the base cost of each class of service under a “common charge” system. Except, in practice, it’s not done that way, and it hasn’t been done that way for at least forty years. How do I know? Because some forty-five years ago, I was a Congressional staffer working for a Congressman on the Appropriations Committee, and even back then the “common charges” were undertariffed and the postal rates for bulk mail, commercial mail [such as catalogues] were essentially based on the marginal costs… and Post Office officials testified that such pricing worked, and I could never get an answer that wasn’t trumped-up gobbledy-gook.

The same thing is happening today. The Postal Service recently entered into a contract with Amazon where the charges for delivering each package roughly average two dollars, half of what other large retailers pay. The lower charges to Amazon were based at least in part on the idea that serving Amazon costs less because Amazon’s shipping was so organized that the effort by the USPS was less.

The problem with this argument is that is doesn’t take into account the heavier load on the USPS infrastructure. It’s marginal cost pricing again, without enough revenue added to support the infrastructure. Charging Amazon on the basis of an accurate proportional common charge basis would add $1.50 on average to delivery changes, which would still be $.50 less per package than for other large retail shippers.

The same system also applies to catalogues. Now, the mail order retailers claim that any significant increase in their bulk advertising rate mail would be prohibitively expensive. I don’t buy it. It wasn’t true forty-five years ago, and it isn’t true now. When companies can afford to design, print, and send us literally tons of unread, unused catalogues year after year, with only minimal increases in their rates [in most years, it’s been 1-2 percent a year; this year was a “whopping” 5.9%], that claim rings rather hollow, but obviously the lobbying campaigns by retailers, manufacturers, and non-profit organizations outweigh any practicality.

Much as I think that there are worthwhile non-profits and charities out there, we’re also inundated by the tireless appeals of both the worthy and the not-so-worthy, sent at roughly a quarter of the cost of a first class letter, and most of those we’ve also never contributed to.

Is it any wonder that the Postal Service continues to lose money?