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2015 Postage Rate Case Update

Posted by Mark Fallon on Feb 18, 2015 5:30:00 AM

2015 Postage Rate IncreaseThere have been several events that will impact mailers as the US Postal Service (USPS) implements the first rate case of 2015. These include a filing for price changes for competitive products, and a clarification on rate increases on market dominant products.

Less than two weeks after filing for an increase for market dominant products (i.e., mailing services), on January 26, 2015, the USPS filed for a rate change on its competitive products – shipping services. In the filing to the Postal Regulatory Commission (PRC), the USPS only requested increases for some products. Notably, they plan to keep prices for Priority Mail Express and Priority Mail at the current level. After a successful holiday shipping season, USPS management want to build on the goodwill created with customers – a sound business strategy.

The timing of the filing was to align the implementation of all price changes to occur on one date – April 26, 2015.

In the initial rate filing for market dominant products, the USPS used the “pre-exigent rate increase” pricing in their charts. This meant that the posted increases didn’t reflect current pricing, and caused confusion for mailers as they tried to calculate what their actual rates were going to be. On February 6, 2015, charts with the new rates were published on the Postal Explorer web page.

For First Class Mail, the retail price for a one ounce letter remains the same. The highest percentage increase for most business mailers will be for customers that sort mail down to the 5-digit level – an over 2.6% rate hike. And the savings for presorting mail compared to just metering mail drops by a half cent.

2015_First_Class
With its many different classifications, Standard Mail is more difficult to display. Rate changes are dependent upon subclass, entry points and sorting levels. Even just one subclass can have 22 different rate changes.

2015_Standard_Rates
The PRC is expected to hand down its decision on the rate cases in the next few weeks – March 6, 2015 for the market-dominant prices and February 26, 2015 for the competitive product pricing. As we noted in our previous post, mailers shouldn’t wait for the PRC decisions, but start taking steps now for the probable rate change. Most importantly, stay informed.

 

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