Trends in Print and Mail

The last blog post proposed a new reporting structure of the US Postal Service (USPS) and the Postmaster General (PMG). This post will review the Universal Service Obligation (USO) and provide a draft USO for your consideration.

The USO is the vaguely defined responsibility of the USPS to provide consistent service at affordable rates to all citizens irrespective of geography. The Postal Regulatory Commission (PRC) calculates the costs of the USO and publishes a report on those costs.

In last month’s post, we reviewed the lack of real reform in the “Postal Service Reform Act of 2022”. While the bill does address some financial issues, it falls short of introducing meaningful change to the US Postal Service (USPS).

A common reply to the post has been, “What would you consider ‘real’ reform?”

That’s a good question, and one that will be answered in three parts. Part One will cover governance and accountability, and Part Two will address universal service and the final part will discuss future services the USPS may provide.

On March 8, 2022, the Senate Passed HR 3076 – “The Postal Reform Act of 2022”. This is an important law that will address several issues affecting the US Postal Service (USPS). However, no matter how this law is promoted, it isn’t comprehensive reform, and it doesn’t overhaul the USPS.

What’s included? In summary:

What I bought on my summer vacation last year.

The day before Thanksgiving, the Postal Regulatory Commission (PRC) published Order No. 6047 – Notice of Proposed Rulemaking for Regulations Pertaining to Section 601. The technical title veils the importance of the ruling. The section being discussed – 39 U.S. Code 601 – describes when the letter monopoly of the US Postal Service (USPS) doesn’t apply to a mailpiece. This is the core of the Private Express Statutes.

For over 6 months, mailing industry professionals – through their associations and as individuals – have expressed their concerns about a second postage rate increase in 2021. Through group calls with the US Postal Service (USPS) leadership, meetings with the postmaster general, and many articles and blog posts, the message has been clear – a second rate increase in 2021 will cause harm. Annual budgets have been set, printers and mailers are just beginning to recover from the pandemic, and USPS service levels will be lowered in September.

Their efforts were for naught.

“Any exceptionally successful person who does not think that good luck is the #1 factor in their success is a pitiful creature.” – Tom Peters

2001 - 2021

In April 2001, I decided to try my luck at starting a company. As my father pointed out to me at the time, I had a well-paying job with good benefits. I was leading a great team of people whose hard work led to success after success. We were pushing the envelope on print-mail technology as well as new ideas on what was expected from an in-plant shop.

On December 10, 2020, The Postal regulatory Commission issued Order Number 5777, requesting comment on Docket No. PI2021-1: Public Inquiry on the Universal Service Obligation Valuation Methodology. The Berkshire Company submitted the following document in response to the PRC.

The last year has brought one challenge after another. The pandemic. Civil rights protests. A divisive election. Violent rioters in our nation’s capital.

The impact to the US Postal Service (USPS) was augmented by additional factors.

On Sunday, January 24, 2021, the new US Postal Service (USPS) postage rates and rules go into effect. Mailers mailers have less than a week to complete their final preparations.

This may be the last increase under the ratemaking rules established under the Postal Accountability and Enhancement Act (PAEA) of 2006. Under the PAEA, the rates for Market Dominant products – First-Class Mail, USPS Marketing Mail, Periodicals, etc. – were limited by the Consumer Price Index (CPI).

After completing their 10-year review, the Postal Regulatory Commission (PRC) modified the ratemaking rules. On November 30, 2020, the PRC issued Order No. 5763 – Order Adopting Final Rules for the System of Regulating Rates and Classes for Market Dominant Products. Under the new system, the USPS will have additional rate authority to raise rates. The factors include a combination of delivery density and retirement-related expenses. The rules went into effect on January 15, 2021 and may be used by the USPS to raise rates above CPI.

There are currently four legal appeals on the PRC order, including one by the USPS. Industry advocates claim that the PRC overstepped its authority, while the USPS is appealing the narrow scope of the order. Until the courts issue a ruling, the order remains in effect.

The current USPS price list – Notice 123 – is available on Postal Explorer as either an HTML or PDF document. Until January 24, the new rates are available for download as either an Excel or PDF file. The Excel file has a tab for each rate class, complete with Zone and weight tables.

Even with the increase, postage rates are a great deal. The USPS retail rates for letter mail remain lower than our trading partners – including the countries that have privatized their posts. This is the current prices for one-ounce stamps (based on exchange rates in effect on January 17, 2020):