Dear Industry Executive:
This week, the USPS announced two major changes to its future price change schemes:
- The Postal Service will not raise prices on Market Dominant products, such as Marketing Mail, First Class, and Periodicals, until July 2022.
- However, beginning in January 2023, the USPS will make price changes to Market Dominant products twice a year indefinitely, each January and July.
July 2022 rate authority will include 10 months of CPI plus retirement, density, and non-compensatory class authorities as determined by the Postal Regulatory Commission (PRC). The January rate authority will include six months of CPI, plus any unused rate authority. Subsequent July rate authority will include six months of CPI plus the retirement, density, and non-compensatory class authorities and any remaining unused rate authority.
With the peak season surcharges, this now makes three impactful rate increases we face each year. More, the USPS has said it interprets the PRC directive to increase underwater products at 2% more than the class average to mean that this extra 2% underwater surcharge will now apply twice a year.
The Postal Service has submitted an official statement reflecting the above schedule with the PRC. The statement gives estimated filing and implementation dates for future adjustments of each mail class over the next three years. ACMA will be bring this into question with the PRC asking if this is what the regulator intended given that it disproportionately burdens a small part of the mailing community.
This increases the urgency to get postal reform passed and to complete work on the flats workflow redesigns aimed at reducing the reported costs of flat mail (and to get out of this punishing underwater status). Your aggressive help in these areas is both needed and appreciated:
- Write your congressional delegation both complaining and asking for this to be reviewed.
- Write the PRC as a mailer expressing dismay that you have lost visibility and predictability into future rate increases given the density factor and now are being disproportionately discriminated against as a flats mailer.
As always, the ACMA is happy to help out members work through this at any time so don’t hesitate to contact us.