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Green light for revised USPS Standard Mail Flats rate rise

Wednesday, December 12th, 2012

US postal regulators have finally approved controversial new Standard Mail Flats prices at the US Postal Service.

USPS had suggested the Postal Regulatory Commission was going a little further than its remit when it rejected its original proposals last month, and demanded an above-average price rise for the rate category that includes items like catalogues.

Under protest, USPS went away and proposed a fresh rate increase, which yesterday was approved by the regulators.

As approved, Standard Mail Flats rates will increase by an average of 2.617% as of 27th January, 2013.

This compares to a 2.61% increase for Standard Mail Letters, a 3.081% increase for Standard Mail Parcels, a 2.059% increase for Standard Mail High Density Letters and a 2.092% increase for Standard Mail High Density Flats and Parcels.

USPS is changing other prices as well from next month, as approved by the Commission earlier this month.

Take Two

The Postal Regulatory Commission rejected last month’s original proposal for a 2.57% increase in Standard Mail Flats prices because it said the Postal Service did not demonstrate it was making progress towards completely covering the costs of the loss-making service.

The regulator had issued an order to the Postal Service back in 2010 to work towards recouping the Flats service losses, since under US postal law USPS is supposed to ensure full cost coverage for its monopoly portfolio products.

USPS, which has attempted to avoid excessive price increases for fear of driving catalogue companies out of business or toward alternative distribution channels, argued last month that it was making progress towards full cost coverage by working to cut the service’s operating costs. However, the Commission said it wanted a higher cost increase.

Approving the revised pricing, the regulator said yesterday: “The Commission finds that an above-average price increase for Standard Mail Flats is expected to improve cost coverage more than the initially proposed below-average increase.”

Prompt decisions

Today saw the Commission’s chairman, Ruth Goldway, criticised USPS for its “reluctance” to adopt Standard Mail Flats rates in line with the Commission’s 2010 order.

She said that the Postal Service’s actions meant mailers now had less time to prepare for the rate changes.

“I am committed to facilitating prompt decisions from the Commission in response to requests for price adjustments from the Postal Service,” Goldway chided USPS, “In turn I expect the Postal Service to respond to clear orders of the Commission by preparing price adjustments that satisfy (US postal law) requirements in a manner that provides adequate lead time for adoption by the industry.”

Source: Post&Parcel/PRC

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