US Postal Rate Commission issues opinion on postal rate increase request
WASHINGTON, Mar 22, 2002 (U.S. Newswire via COMTEX) — The independent PostalRate Commission today approved an unusual settlement that will allow postalrates to increase as early as June 30.
The settlement was offered in a Commission proceeding considering a PostalService request for rate increases. The request had been developed before theterrorist attacks of September 11.
The Postal Service joined with mailer groups, postal employee organizations,competitors, and the Office of Consumer Advocate that represents the interestsof the general public in a proposal that will increase rates by 7.7 percent. Aspart of the settlement, the Postal Service agreed to a schedule that would deferany additional increases until late summer of 2003.
The rates for First-Class letters will increase by 3 cents, to 37 cents. Thepost card rate increases two cents to 23 cents.
One of the several unions of postal employees was the only party to oppose thesettlement. The union favored smaller discounts for First-Class Mail presortedby mailers. The Commission did not agree that the proposed discounts were toolarge.
This is the first time a postal rate case has been resolved through settlement.Normally, the numerous conflicting interests engage in complex litigation todetermine whether rate increases are justified. Federal law requires the PostalService to break even from operations. It is expected that next year the Servicewill need almost $75 billion in postage revenue.
The Commission recognized that the events of September and October, inparticular the disruption caused by the use of the mail to distribute lethalanthrax spores, had a significant but as yet unquantified impact on PostalService operations and finances. It suggested at an early stage of the case thatthe parties consider whether under such circumstances, a rapid settlement mightbe in the public interest.
Chairman Omas today commended all the parties involved for their selfless andcollaborative response in addressing the immediate and unprecedented challengesfacing the Postal Service.
“This decision will allow the Postal Service an immediate influx of revenue,while holding rate increases to a reasonable percentage for postal customers”Omas said. He stressed the increases should provide “breathing room the Service,and those businesses that rely on it, need to successfully meet recentchallenges.
