New postal legislation in the United States
In last year’s edition of World Mail Review, Lawrence Chaido gave readers a fascinating insight into postal regulation in the United States from the earliest days of the republic. When we went to press in May 2006 Congress was still debating a new Postal Accountability and Enforcement Act.
Despite the major changes to the political landscape following the 2006 congressional elections, the Act did indeed become law in December.
World Mail Review asked Lawrence to bring our readers up to date with the Act, and some of its implications.
Main Provisions of the Postal Accountability and Enforcement Act
The new act (the first since 1971) will enable the USPS to take forward both its domestic and international business plans, and ensure its future solvency.
The act outlines some key principles that will affect the operations of the Postal Service.
It defines what postal services are, namely the delivery of letters, printed material, or mailable packages, including acceptance, collection, sorting, transportation, and ancillary functions.
The USPS is relieved of certain huge escrow pension and healthcare payment requirements, in particular in respect to former military personnel
The universal service obligation remains a six day delivery financed with a regulated monopoly, but the newly empowered Postal Regulatory Commission (which replaces the Postal Rate Commission) is required to carry out a detailed review of the whole area of monopoly, reserved services, and the USO by December 2008.
In general, services in which the USPS is market dominant (including single piece international letters, packets and other non-commercial products) will be under a ten year rate cap regime where increases do not exceed the consumer price index increases. Where services are competitive (such as express, domestic parcels and priority mail, and commercial international letters and parcels) the USPS has much more freedom to determine prices without reference to the Postal Regulatory Commission (PRC).
The PRC will become much more of a regulator, with sub poena powers. It will also oversee with the USPS the establishment for the first time of performance and quality standards for market dominant products, including the introduction of objective external measurement. In addition, for the first time in over 200 years the PRC will have oversight of international issues.
As a further sign of the move to a more commercial environment, senior USPS executives can now earn salaries in excess of congressmen.
The International Dimension
Of particular interest are the related revisions to the international relations and oversight of the USPS.
The USPS is now explicitly permitted to enter into commercial and/or operational contracts related to providing international postal services and other delivery services, as it deems appropriate.
There is also now a requirement that the Customs Service and other appropriate Federal agencies ‘shall apply the customs laws of the United States and all other laws relating to the importation or exportation of such shipments in the same manner to both shipments by the Postal Service and similar shipments by private companies’.
This is clearly a very major change, and the agencies concerned are now reviewing their policies before this provision is enacted in May 2007.
As we know, USPS has recently significantly uprated the role of its international unit, in part at least to capitalise on these changes.
I am sure that the future of the USPS will see additional turning points as the business continues to grow, evolve, and adapt to its environment. It is my hope that the next turning point in the direction of the Postal Service will not take a further 35 years to enact.
