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Posts Tagged ‘USPS’

USPS Announce Rate Increase for 2012

USPS has announced that they will be taking the maximum increase allowed under current law, which is 2.1%.  The actual percentage price increase for specific products will vary, however, the overall average price increase for all mailing services is capped at the rate of inflation as measured by the Consumer Price Index (which is 2.1%).  The new prices will go into effect on January 22, 2012 for most mailing services.

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Will Saturday USPS Service Stop?

usps-logoBy law, the USPS is required to ask the Postal Regulatory Commission for an Advisory Report on any change in their services. The Postal Service advised the Commission that due to declining mail volumes and revenues, they are considering the elimination of Saturday mail service with the exception of Express Mail and existing Post Office Box service.

Last week, the Postal Regulatory Commission issued their thoughts on the Postal Service’s plan to eliminate Saturday mail service. To follow are the key findings of the Commission’s report:

  • The Commission’s estimate of annual net savings is $1.7 billion
  • The estimated savings by the Postal Service is $3.1 billion
  • In either case, full savings is unlikely to be achieved until year three after implementation
  • The Commission estimates net revenue losses of $0.6 billion due to volume declines caused by the service cuts
  • The estimated net revenue loss by the Postal Service is $0.2 billion
  • The planned changes would cause an average of 25% of First-Class and Priority Mail to be delayed by two days
  • The Postal Service did not evaluate the impact of the proposed cut on customers who reside or conduct business in rural, remote, and non-contiguous areas

It should be noted that customers in rural or remote areas can be particularly affected by the Postal Service’s plans. To gain a better understanding of these issues, the Commission received significant input from rural America by traveling to South Dakota and Wyoming to meet directly with rural customers and community leaders.

The elimination of Saturday service has been proposed many times before and was debated extensively in 1977 and 1980. However, in 1983, Congress adopted specific language that required the Postal Service to maintain six-day delivery. Congress will now consider the Commission’s Advisory Report, as it reviews the Postal Service’s request to change the law.

As an outsider looking in, it is my opinion that elimination of Saturday service will occur later this year. What do you think will happen? Please feel free to post your opinions and comments on this blog entry.

Postal Regulatory Commission Denies USPS Price Increase Request

On September 30th, the Postal Regulatory Commission announced that it unanimously denied the USPS’s exigency price increase request in its entirety.

The Postal Regulatory Commission issued an order yesterday denying a Postal Service request for an average 5.6 percent rate increase. The Commission found that the Postal Service failed to justify a rate increase in excess of its statutory CPI price cap.

According to Chairman Goldway, “From the outset, we devoted ourselves to a careful study of the law. The Commission and our staff have worked to determine the law’s intent, to clearly understand its provisions and to define our responsibilities in order to apply it fairly. Notwithstanding the complexity and difficulty of the issues before us, the Commissioners’ deliberations have been collegial. The decision we have come to is a consensus and is unanimous. We concluded we must deny the request.”

Commission Blair commented by saying, “I support the Commission’s denial of the exigency increase requested by the Postal Service. However, I offer a concurring opinion which would deny the Postal Service the requested increase because it did not meet the threshold test of showing the existence of “extraordinary or exceptional circumstances” as required by the Postal Accountability and Enhancement Act.”

The Postal Service may be unable to continue to meet a statutory 10-year payment schedule – averaging roughly $5.5 billion per year – to create a fund to pay future retiree health benefit premiums. It has been unable to fund this obligation from operations, and has instead used up all of its retained earnings and drawn down from its $15 billion borrowing authority. Even with the requested increase, the Postal Service would be unable to meet this annual obligation either in 2011, or in succeeding years.

We will watch for the next move by the Postal Service and keep you apprised of any new development.

U.S. Postal Service 2011 Proposed Rates

Proposed price changes for the U.S. Postal Service were filed with the Postal Regulatory Commission today. If this proposal is accepted, the increases will take effect on January 2, 2011.

After reviewing the potential changes, about 90% of USPS services will see an increase of between 4% and 6%. For complete details of the pricing proposal, visit the USPS website at http://www.usps.com/prices.

As they say, the devil is in the details, and publishers will need to pay very special attention to these details. The proposal includes an 8% increase for Periodicals, 5.1% increase for Catalogs, a 23% increase on Standard Mail Parcels and a 7% increase on Media/Library Mail. USPS’s justification for the larger increases was that these specific services did not cover the costs associated with them.

Other price increases noted include taking a First-Class Stamp to $0.46 cents and increasing the cost of mailing a First-Class postcard to $0.30.

It is well known that the USPS continues to struggle just to break even. Over the last ten years, they have reduced expenses by more than $1 billion every year. Even with the 2011 projection there will a shortfall of $7 billion. In order to eliminate that gap, the Post Office would need a 20% price increase across the board to eliminate the estimated shortfall.

The Post Regulatory Commission has 90 days to review this proposal and make its final ruling. They can decide to accept all increases or reject all increases. Stay tuned for more updates from Ware-Pak.

US Postal Service Announces Rate Increases for 2010

The USPS has announced new pricing for shipping services to be effective January 4, 2010. The services that will see price increases include Express Mail, Priority Mail, Parcel Select (Destination Entry Only), Parcel Return Service, Global Express Guaranteed, Express Mail International and Priority Mail International. Rate increases will not impact First Class Mail.

On average…

  • Priority Mail prices will increase by 3.3 percent.
  • Express Mail prices will increase by 4.5 percent.
  • International Shipping Services prices will increase by 3.3 percent.

For the complete list of USPS rate increases, visit http://pe.usps.com/PriceChange/Notice123_jan_2010.pdf

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