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Postage Rates Are Going Up: The World Doesn't End

Posted by Mark Fallon on Oct 31, 2013 2:48:00 PM

On September 30, 2013, the US Postal Services (USPS) filed their annual request for a rate increase. Also, they refiled a 2010 request for an exigent rate increase higher than the rate of inflation. That means on January 26, 2014, postage rates may go up by 6%.

Contrary to rumor, this doesn't mean the end of print and mail as we know it.

The annual increase, which is tied to the Consumer Price Index (CPI), is an expected event. Like its competitors, the USPS is impacted by the rising costs of labor, healthcare and transportation. Unike its competitors, any rate change must still be reviewed by the Postal Regulatory Commission. However, if the past 4 rate cases are an indicator, the small increase is likely to be approved.

The USPS is also asking the Postal Regulatory Commission to reconsider a 2010 filing for an exigent rate increase above the rate of inflation. The primary reasons for this increase are the burden of pre-funding future retiree health beneftits, and the diversion of First Class Mail volumes to the Internet.

Again, if past is prologue, the Postal Regulatory Commission will probably not grant the extra increase. The USPS hasn't changed its argument for the exigent increase significantly. Also, the USPS has defaulted on the retiree health benefit payments for two consecutive years - with no negative consequences. Yes, the USPS is in debt, but to the US Treasury. I doubt the Treasury will take any action against another government agency.

Rates will go up on January 26, 2014. However, they will probably be less than what the USPS wants. And companies in the United States will be able to continue mailing at the lowest postal rates of any industrialized nation.

 Mark offers a vision of the document that integrates technology, data quality, process integrity, and electronic delivery. Recognized as one of the leading technologists in the print/mail industry, Mark is the author of the "Digital Document Command Center" model. His successes are based upon using leadership to implement innovative solutions in the document process.

 

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