USPS Will Use New Rules to Change Postage Rates

The U.S. Postal Service Board of Governors announced on Nov. 15 that it will use new rules established by the Postal Regulatory Commission (PRC) to change postal rates in the future. Under the new rules, USPS can adjust rates for each market dominant class of mail - First-Class, Periodicals and Standard Mail – so long as the increase for each class of mail does not exceed the Consumer Price Index (CPI). The Postal Service can adjust rates at different levels within the class of mail.

Daily newspapers spend roughly $1 billion on postage across all classes of mail with nearly $800 million spent annually on Standard Mail. The new rate setting system for market dominant products – tied to the CPI – will provide newspapers and other mail consumers with price predictability going forward.

The comprehensive postal reform law provided the USPS Board of Governors with an opportunity to file one final rate case with the PRC using regulations that have been in place since 1971. A rate case under the old law usually takes 10-11 months. Postmaster General Potter said that by using the new rate setting system, USPS can move forward now to offer contract rates and volume discounts for its competitive products (parcels/priority mail). Postal observers believe USPS will propose new rates on market dominant products – mentioned above – in January or February, with the expectation that the rate changes will go into effect in April or May.

First Published:
December 08, 2007