USPS Goof Gives Publishers a Break on Postal Rates

Because of a calculation error, the average postal rate increase for magazines in April will be less than originally announced.

The Postal Regulatory Commission, which spotted the error last week, calculates that the average increase for “Outside-County” Periodicals (primarily magazines, with some newspapers and newsletters) will be only 1.34%, not the originally announced 1.965%. USPS acknowledged the error on Wednesday.

The slip-up came in creating an apples-to-apples comparison of the current rules and rates to the new ones. The PRC noted that the USPS calculations failed to account for new rules that will result in fewer carrier-route bundles and more Flats Sequencing System-optimized bundles.

Given that the Postal Service allegedly loses money on Periodicals Class mail, the PRC questioned why the class’s rate increase was so low -- by far the lowest of the "market-dominant" classes.

“The Postal Service’s intention was to increase Periodicals prices by 1.965 percent,” USPS wrote in its response to PRC questioning. But with the correction noted by the PRC, the proposed rates “unintentionally reflect a percent price increase for Periodicals that is below the goal of 1.965 percent.”

USPS’s response did not indicate it would try adjusting the proposed Periodicals rates, which may not even be possible at this late date. But publishers won’t get off scot-free: In the next round of inflation-based rate increases, the “unused rate authority” is likely to be applied to levying a higher rate hike for Periodicals.