Postal Service Files For Rate Increase

The United States Postal Service (USPS) filed notice with the Postal Regulatory Commission (PRC) for a rate increase that, if approved, would increase postage rates anywhere from 2 to 4 percent, depending the class and category of mailings. The new rates would take effect on Jan. 21, 2018 after review by the PRC.

The proposal would raise Mailing Services product prices about 1.9 percent, and most Shipping Services products would average a 3.9-percent increase. The new prices would include a one-cent increase in the price of a First-Class Forever stamp, from 49 cents to 50 cents. Increases in Mailing Services are limited to the Consumer Price Index (CPI) while Shipping Services prices are adjusted “strategically, according to market conditions and the need to maintain affordable services for customers.”

The filing is routine but it is “separate from all the issues we’re dealing with,” Kearney said, including a proposed rule change for Marketing Mail that could raise nonprofit rates another 3 to 7 percent. The ANM filed two sets of comments opposing the change and also got about 80 nonprofits to write letters to the PRC in opposition, he added. It also doesn’t take into account the 10-year review of the pricing system, which employs the CPI cap, that’s being undertaken, he said.

Nonprofit flats, primarily used in fundraising with large envelopes, would see a rate decrease of 3.7 percent while nonprofit letters likely would project an increase of about 4.4 percent, according to Stephen Kearney, executive director of the Alliance of Nonprofit Mailers (AMN). He has submitted questions to the USPS about why it chose to have a big disparity in prices for letters and flats.

USPS made clear on the first page of Friday’s filing that it is using the CPI cap system but they expect that will be the last time. “We filed extensive testimony that the price cap should stay,” Kearney said. “There are plenty of other things the Postal Service can do to fix its finances, mainly controlling costs better but also higher returns on retirement funds,” he said.

There also are no sitting USPS governors when there should be nine, Kearney said. USPS governors are supposed to set strategic direction, hire and fire the Postmaster General, and set postage rates, among other responsibilities. “The absence of USPS governors is hampering the ability of postal management to make needed strategic decisions to steer the agency through the current transition to lower mail volume, but much higher package volume,” he said.