Despite divided landscape, Postal Service rate increase approved

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At 4pm Tuesday, the Postal Regulatory Commission (PRC) announced its approval of an exigent rate increase of 4.3%, the full amount requested in September by the U.S. Postal Service. Commented David LeDuc, SIIA’s senior director, public policy, “We are extremely disappointed that the PRC chose to move forward with the exigent rate increase, as this action places a significant cost burden on many of our members. With the previously approved CPI increase of 1.7% and the announcement today of the 4.3% exigent rate increase, the full amount of this year’s increase equals 6.0%. The only bright spot in the Commission’s ruling today was the denial of the Postal Service’s request to make the increases permanent, instead the Commission ruled the exigent increase is only applicable for ‘less than two years.’”

Quoting from the PRC’s press release, “In its majority decision, the Commission found that the Postal Service experienced financial harm as a result of the Great Recession and is legally entitled to implement price increases in excess of the CPI cap for less than two years. The Commission denied the Postal Service’s request to make the increases permanent. It found allowing the increases to remain in effect indefinitely would be inconsistent with fundamental postal policies underlying the price cap.”

SIIA/ABM had fully participated in the mailing industry’s efforts, through our own efforts and those of the Affordable Mail Alliance (AMA). The Affordable Mail Alliance (AMA) made the argument that while the recession caused some financial harm to the USPS, the size of the exigent increase was significantly larger than it should have been based on the calculation of the damage caused by the recession. They also argued that a significant percentage of the losses were caused by electronic diversion and not the recession, which does not qualify for an exigent increase. SIIA/ABM also submitted its own brief to the PRC outlining reasons why the exigent increase should not be approved.

Obviously, there is still work to be done. “The Postal Service remains in a state of financial crisis,” wrote Postal Regulatory Commissioner Mark Acton. “Granting the Postal Service some or all of the pricing relief it seeks…may help in the short term but that does not alter that reality.”

SIIA will provide additional information and analysis after the Holidays.

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Ronn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 and SIIA in 2013 as editorial director…