The U.S. Postal Service announced hikes in shipping rates, effective Jan. 22, by roughly 5 percent, as part of efforts to boost revenue and avoid bankruptcy, according to a report by The Associated Press.

The proposed rates include a new $39.95 rate for overnight express mailboxes weighing a maximum of 70 pounds and a flat rate of $18.95 for express letters. Priority mail shipment prices will increase by 3.1 percent. These hikes will be in addition to the one cent increase for first class mail, to 45 cents.

In addition to the proposed price increases for next year, priority mail rates are: $5.35, $11.35, $15.45, $5.15 and $5.30 for a small box, a medium box, a large box, a regular envelope and legal-size/padded envelope, respectively.

However, despite news of these hikes, it's believed that new fees will only partially compensate for the staggering $5.1 billion loss the country's postal service reported last year. Although profits soared a reported 6.3 percent for priority and express mail, revenue for first-class mail dipped 5.8 percent.

The recession has  been hard-hit by the recession and growing use of the Internet over mail as well a requirement to fund future retiree medical benefits years in advance; the agency, an independent body, doesn't receive tax money for operations. In recent years, the postal service has shut branches, eliminating about 130,000 jobs.

To avoid further risks of bankruptcy, the Postmaster General, Patrick Donahoe, called for quick Congressional action to provide the service with greater flexibility in book-keeping. Donahoe further said that losses would actually have doubled, if the Congress hadn't allowed a delay to shift an outstanding $5.5 billion payment to a fund for retiree health benefits.

Postal reform bills have been passed by both Houses. However, Donahoe has said constraints in the bill that don't solve long-term budget problems.

We're in a deep financial crisis today because we have a business model that is tied to the past. We are expected to operate like a business but do not have the flexibility to do so, said Donahoe this week.