Monday, June 10, 2013

Mailers Rallying Against Rumored 10% Postage Hike

Mailing-industry leaders fear that the U.S. Postal Service is on the verge of requesting emergency rate increases of up to 10%.

After lying dormant for a couple of years, the multi-industry Affordable Mail Alliance was reorganized on Friday to fend off expected "exigent" (higher than inflation) rate increases for the ailing Postal Service. The group started rallying mailers today to contact members of the USPS Board of Governors, which is rumored to be discussing such rate increases when it meets next week.

The alliance was formed in 2010 when USPS sought to solve its financial problems by sidestepping the inflation-based cap on rate increases for First-Class, Standard, and Periodicals mail. That attempt failed, but this time the Postal Service is in more dire circumstances, perhaps only months from running out of cash.

When the Board of Governors backed down in April from a money-saving plan to curtail Saturday delivery, it asked postal management to examine options for increasing revenue. It specifically mentioned the possibility of exigent increases, especially for supposedly unprofitable classes like Standard flats and Periodicals.

One scenario being discussed among mailers is an exigent increase of 5% to 7% for all market-dominant classes plus an additional 3% for the unprofitable classes. That's on top of the usual inflation-based increase, which could be close to 2% in January.

Annual rate hikes for the market-dominant classes are generally capped by changes in the Consumer Price Index. But the law also has a provision “whereby rates may be adjusted on an expedited basis due to either extraordinary or exceptional circumstances.”

The law, however, does not provide the Postal Regulatory Commission clear guidelines as to what constitutes "extraordinary or exceptional circumstances" justifying a special rate hike.

Mailers have questioned whether exigent rate increases would actually backfire by shaking confidence in USPS and the stability of postage rates, which would accelerate the shift to other media.

In a related matter, the PRC today rejected the Postal Service's proposal to use a one-time "Technology Credit"to justify rate increases, a gambit described in New Postal Incentive Could Backfire for Mailers.

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Anonymous said...

what a joke USPS is!....
corruption from top to bottom, even the Union!

Anonymous said...

Many times we've had our local post office tell us not to send so much mail.


Anonymous said...

Mad because they do not want postage increase for unprofitable mailings? The Post office has to by law deliver bulk mail at loss. The government needs to take total control of the Post Office or stay out of its way!!!The Post office has been a cash cow for the government for far to long!!!!!!

Frank said...

Large mailers have been subsidized by 1st class mail for many years. When I started with the P.O. in 1978, bulk mail was less than 20% of volume and paid about 9 cents per letter. Today some of the largest mailers still pay less than 10 cents and bulk mail is now over 50%. Let junk mail start paying it's own way. I would rather loss my job not delivering junk people don't want in their mail boxes than to lose my job to as yet another subsidy for junk mail!

Anonymous said...

These are the same corporate aholes that are against getting rid of Saturday. Correct me if I am wrong, but wasn't the USPS invented for the people, not business. This is not Mitt Romneys America.

Anonymous said...

Just remember, every time the US government takes money out of the post office, the money you paid for stamps becomes money you paid as a tax.

ET - 10 Jeffrey E. Simmons said...

It's about time. The USPS is the backbone of a $1 trillion/yr mailing industry which employs 10 million souls. They subsidize Pitney Bowes, FedEx and UPS, the federal government and also the largest bulk mailers for YEARS.

Now that it's time for the largest, most profitable of these mailing mills to start paying their fair share, they're going to put on the poor mouth? Give me a break. I reiterate... It's about time.

Anonymous said...

The Republicans in Congress are doing everything they can to set the PO up to fail so they can 'privatize' it. If they changed the ridiculous requirement forcing the USPS to put $5 billion in first dollars to pre-pa pensions, it would be a huge step in bringing them back to solvency. Of course, that's not going to happen anytime soon.

If you think rates are high now, wait until FedX and UPS take it over. They won't need approval for rte hikes once it's part of the so-called 'free market'.