Thursday, July 23, 2009

Postal Officials Ponder Emergency Rate Increases

Postal officials are spreading the word that they may seek emergency rate increases next year.

Various scenarios have been bandied about, including one that would raise the price of the 44-cent First Class stamp to 50 cents and other rates by similar amounts. But after several meetings with postal officials, the Direct Marketing Association is telling some members that the Postal Service is more likely to seek an "exigent increase" of only 2% to 3%, including only one cent for the First Class stamp, to help shrink its multi-billion-dollar losses.

Annual increases in most postage rates are generally capped by changes in inflation. Postal officials are realizing that deflation, especially the drop in energy prices since last summer, will probably mean no such rate increases next year, according to accounts coming out of meetings with postal officials. As Dead Tree Edition pointed out recently, USPS will not be able to institute normal rate increases in May 2011 unless the Consumer Price Index rises at an annualized rate of nearly 5% for the rest of this year.

That's why postal officials are pondering an unprecedented "exigency-based" rate adjustment, which postal regulations allow "only when justified by exceptional or extraordinary circumstances." Postal Regulatory Commission rules would also require USPS to discuss the circumstances leading to the proposed increases and "whether the circumstances were foreseeable or could have been avoided by reasonable prior action."

The PRC would hold a public hearing on an exigent rate request and by law would have 90 days to decide whether "such adjustment is reasonable and equitable and necessary to enable the Postal Service, under best practices of honest, efficient, and economical management, to maintain" appropriate service levels.

The Postal Service, which is supposed to break even, is projecting a loss of about $6 billion this fiscal year. To close that gap, which USPS says will grow unless it takes drastic action, postal officials are also discussing plans with mailer groups and postal unions to transition to five-day delivery in the fiscal year that starts in October 2010. That would require Congressional approval.

The closing of thousands of post offices is a possibility, the consolidation of processing and distribution centers has recently accelerated, and USPS continues to shrink its workforce -- all in response to declining mail volume that is causing the budget shortfall.

The meetings have also been an attempt by postal officials to shore up union and customer support for legislation that would reduce USPS' unusually high pre-payments for retiree health care. The Congressional Budget Office estimates H.R. 22 would save USPS about $2.5 billion annually for the next three years.


Anonymous said...

People bitch when you raise the stamp 1 cent, might as well go for a nickel and get it over with.

Anonymous said...

Its time to look at a real reduction in home delivery, say 3 days a week. Not only would that save the USPS a lot of $$$ but think of the carbon footprint!!!

Anonymous said...

Their worried about how dropping Saturday delivery will bring competition to door to door, universal service. How we'd lose our idenity. But they don't think one thing about raising first class mail rates. Stamps!

Raising rates for first class mailers has never been the answer but has always been the solution. And it's always the solution around contract negotation time.

Drop the cost of 1st class mail and get the American public to support our service.

The United States Postal Service is the 2nd oldest Federal Agency behind the Congress. And we are still today the MOST important agency in Federal Goverment Service.

Act like it.

Anonymous said...

I thought the postal service doesn't need to break even anymore.

Even if we drop first class mail to 32 cents the public will still do online billing and email. Its way more convient.

I think the military is a more important federal agency than the postal service.

swehking said...

I think the po should charge one flat rate for all letters. No more special rates. Also get rid of at least half of management and the postmasters are useless, what do they do? We are a service not a business.

Anonymous said...

Offer an incentive for retirement to reduce staffing to match mail volume.

Anonymous said...

If they truly want to save money tell them to look at all the management that is dead wood. Example... we are going to get minor route adjustments like all offices. We have someone doing a CORS adjusting our routes and it is becoming quite the mess. They have spent WEEKS trying to make the program work, yet it would take the union and local management about 2 hours to make the adjustments. What is more time savings.... 8 hours per day times 5 weeks or three people spending 2 hours doing the adjustments. Don't tell me we are going broke when you keep paying people to do meaningless tasks. And don't even get me going on ODIS.

Anonymous said...

Raising first class letter rates, and postage rates in general, will chase away customers. When the USPS recently raised it's rates for flats, manager were telling employees that the effect would be drastic reduction in volume - they expected this! Same thing has happened to letter rates. If the USPS dropped the first class letter rate back to about 35 cents and marketed to customers better to keep them informed of the advantages of using mail (to communicate, advertise, pay bills, etc.) more people would mail and the USPS would make more money then they do at 44 cents. The USPS could also do more to make mailing such things as bill payment not only more reasonably priced, but more secure and trackable - maybe work some deals with credit card companies, etc., so that the postmark date means something again.

Anonymous said...

lets get serious. why wait until october of 2010 tu plan for 5 day delivery. do it now. give the csrs employees one month for every year they worked and yu would see alot of us take the retirement. i am 29 years in and if they did that tommorrow i would retire and so would alot of others. but the po has no common sense

Anonymous said...

The e-mails and computer era have definetly put a crunch on the PO. The one thing they must focus on is the parcel market,as of right now the PO only has about 16% of that market. Yes all the commercials on the flat rate boxes need to be backed up with action. right now employees are being moved around and positions filled that way but there is no way that there are going to be enough spots for all these people to move..When your backs against the wall you must come out swinging, they need to get the product delivered they can order it on line but still needs to be shipped. I suggest 7 day delivery on parcels. No other company offers 6 move to 7, they have the employyees to get it done, some scheduleing and you are not even paying overtime to get this done but what a service this would be to all companies shipping any products....

Anonymous said...

management needs to cut it's work force in half and start to practice what it preaches. They would rather deal with the same problem day-in and day-out instead of fixing them. I was taught in college (management 101) that their goal is to correct problems, not create them. The big shits cook the numbers to look as though they are doing a good job. The problem is they beleive their own bull.I see 3-4 bosses in my office every day doing the same mindless tasks every day and getting nothing done. I have never seen any outfit spend so much time,money and energy and get nothing done.Government work could be a good job if the people calling the shots knew the jobs at hand and knew what was involved in getting the delivery task done.These people never did these jobs but tell us how to do it.I have a college education in management and this is not what they taught me.

Anonymous said...

The PO is a classic example of gross inefficiency.
Th cut the hours at the window and give the managers a bonus for capping hours. They could give a crap about the customers standing in line for 30 minutes.
F the PO.
They do the same crap year in, year out and expect to see different results.
F the PO; they should compensate me for all the time wasted using their crappy lousy service!