In an effort to minimize the $2 billion operating loss it is facing this year, and to comply with its mandate under law to break even over time, the U.S. Postal Service will raise rates on many of its products and services, effective July 1, 2001. Most notably, although you will still be able to send a one-ounce First Class letter for 34 cents, you'll now be paying 23 cents for each additional ounce, an increase of 2 cents per ounce.

Postcard postage will go up by a penny, to 21 cents. The cost of mailing 8 ounces of Express Mail will jump from $12.25 to $12.45; mailing up to 2 pounds of Express Mail or a flat rate Express Mail envelope will cost an extra 25 cents, at $16.25. The charge for sending certified mail will be adjusted upwardly by 20 cents, to $2.10, and domestic money orders will climb from 75 cents to 90 cents. To see a complete list of the rate changes, go to http://www.usps.com/ratecase.

If you're a small business owner who just updated your postal scale five months ago to accommodate the Jan. 7 increase in First Class postage, you must now update your scale again to reflect the modified rates.

Since it looks as if postage rates aren't likely to stabilize soon, consider adding rate insurance for your postage meter to your contract if you don't purchase it already. Although there's no way to get around paying higher postage rates, you will at least avoid the $75 to $175 fee charged to reset your postage scale.

You might be wondering why, in the interest of efficiency, the Postal Service couldn't simply have implemented all of the 2001 rate hikes at one time. The answer is: governmental red tape.

Following cumbersome procedures required under the Postal Reorganization Act of 1970, the Postal Service first requested increases 17 months ago. The Postal Rate Commission (PRC), an independent body, reviewed this petition, and lengthy hearings were held. The Postal Service Board of Governors provisionally adopted some of the PRC's recommendations in January of this year (raising First Class postage to 34 cents was one of them), but asked the PRC to reconsider the others.

Since January, the PRC has twice revised its original recommendations. On May 7, the Postal Service Board of Governors voted unanimously to modify the second set of recommendations, resulting in the changes that will go into effect on July 1.

Industry experts expect more price adjustments to come in 2002, as the Postal Service, which receives no tax money to cover operations, grapples with issues familiar to any business owner: the uncertain economy, dramatically escalating fuel prices, an increasingly competitive marketplace, and the bottom line cost of doing business.