Regulators overseeing the U.S. Postal Service are considering a series of rate and operational changes. As part of this review, the Postal Regulatory Commission (PRC) is reviewing pricing rules the U.S. Postal Service has had in place since November 2020. At the time, the rules were scheduled to be reconsidered after five years, although the PRC left room for earlier review.
Calls for review come after industry stakeholders raised a number of concerns, according to a bulletin from Stephen Kearney, executive director at the Alliance of Nonprofit Mailers in Washington, D.C. Issues mentioned include:
- The magnitude of recent and future price increases
- The frequency of rate adjustment proceedings, the Postal Service’s service performance
- The effects that recent rate adjustments have had on mailers
- The Postal Service’s overall finances and financial stability, the Postal Service’s ability to collect adequate data and the Postal Service’s business reputation
In particular, some mailers wonder whether the Postal Service is in a vicious circle in which rate increases result in volume declines, which lead to revenue shortfalls, which in turn result in further rate increases. According to Kearney’s bulletin, Market Dominant mail (which encompasses Standard Mail, First-Class Mail, Periodicals, Package Services and Special Services) has declined from 121.6 billion pieces during FY 2021 to 109.5 billion pieces during FY 2023.
The volume declines have been accompanied by service declines. According to a PRC press statement from late March, 15 out of 27 Market Dominant products or categories failed to meet their service performance targets during FY 2023.
Interested parties may file comments related to the PRC’s review of the ratemaking system. While all comments relevant to the process are welcome, the PRC is especially interested in the following issues:
- Is the ratemaking system achieving the statutory objectives, while taking into account the statutory factors? Why or why not?
- If the ratemaking system is not achieving the statutory objectives, while taking into account the statutory factors, should modifications be made or an alternative system be adopted to achieve the statutory objectives? Why or why not?
- If so, what modifications to the ratemaking system should be made or what alternative system should be adopted?
Comments may be filed through this portal: https://prc.arkcase.com/portal/home Comments are due July 9, 2024. Reply comments are due by August 13, 2024.
In addition to rate issues, leaders at the Postal Service are considering several proposed changes. According to the U.S.P.S.’s Release Overview, possible modifications include:
* New Promotions and Incentives: USPS is introducing five Mailing Promotions and two Mail Growth Incentives for 2025, including promotions like Tactile, Sensory and Interactive Promotion, Integrated Technology Promotion, and more.
* An Incentive for Marketing Mail: An incentive program for Marketing Mail and Bound Printed Matter Catalogs is in the works.
* Elimination of Marketing Mail Simple Samples: USPS is discontinuing Marketing Mail Simple Samples.
* Price Restructuring: A price restructuring for Marketing Mail Flats at 4 ounces is planned, including separate per-piece and per-pound pricing structures.
* Official Election Mail/Ballots Identification: New requirements will be implemented to distinguish Official Election Mail/Ballots from Political Campaign Mail.
* First Class Mail Flat Pricing Reevaluation: There will be a reassessment of First Class Mail Flat pricing.
The full Release Overview is available here: https://postalpro.usps.com/july-2024-release-overview
Separately, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the Postal service on April 16, 2024. According to Kearney, witnesses will include Michael Kubayanda, Chairman of the Postal Regulatory Commission and Tammy Hull, Inspector General, United States Postal Service.
