Mailers denounce “11th hour” bid by USPS to dodge reporting requirements
Groups representing major mailers in the United States have denounced an “11th hour” attempt by the US Postal Service to keep quiet how much it is collecting in additional postal rates from a temporary surcharge currently under judicial review. Postal regulators agreed four months ago to allow USPS to claw back some of the financial damage caused by the 2008-09 recession through above-inflation 6% rate increases.
The rate increase was not to be permanent, the Postal Regulatory Commission decided, but would take the form of a temporary surcharge capped at $2.8bn.
The case is to be considered by the US Court of Appeals for the DC Circuit, which could rule the entire surcharge illegal, or require it to be reduced in size.
The Commission originally allowed the cash-strapped Postal Service to apply the temporary surcharge on the condition that it reported quarterly on how much it was collecting from the surcharge, and that by May 1, 2014, it would disclose plans for removing the surcharge once the full $2.8bn has been collected.
Last week, just days before the first reporting deadline, the Postal Service filed a request with the Commission to stay its reporting requirements.
USPS said putting out a plan for removing the surcharge, and reporting quarterly collection amounts, would be “premature” before the appeals court considers the regulator’s order. It also said it would not be able to produce the report in time for the first reporting deadline.
This week, mail industry groups including the catalogue industry, the paper industry, the marketing industry, the newspapers and magazines industries, as well as others, warned that allowing the Postal Service to dodge its reporting requirements could cause “irreparable harm” to mailers.
The mailers said that by the time the legal wrangle over the surcharge was fully resolved, and the surcharge perhaps reduced in size, the Postal Service could already have picked up the full $2.8bn.
The failure to issue a plan to rescind the temporary surcharge would also cause mailers difficulties in adjusting their software and mailing budgets to account for new prices, and cause problems for them in planning ahead.
“Brinkmanship”
The mailers’ filing said the Postal Service knew it would seek a stay on the order months before filing the request the week before the deadline.
“This is not the first time that the Postal Service has engaged in this kind of 11th-hour brinkmanship,” said the mailers’ filing.
“The Commission, however, is charged with regulating the Postal Service, and the Postal Service must understand that it cannot pick and choose which of the Commission’s orders it will comply with.”
The mailers noted that when USPS was ordered to equalize its rates for DVD and video game mailing firm GameFly to the level enjoyed by rivals Netflix, the Postal Service waited until just one week before its compliance deadline to file for a stay on the order, which was subsequently denied.
The increasingly rocky relationship between major mailers and the US Postal Service comes as USPS battles with continually declining mail volumes, with its customers looking to alternative channels for their customer communications.
Total mail volumes from the beginning of October 2013 to the end of February 2014 were down 3% year-on-year, with the biggest money-making product in USPS, First Class Mail, seeing a 4.7% year-on-year decline, with Standard Mail seeing a 1.5% year-on-year decline. Periodicals, which are increasingly moving online, have seen mail volumes drop 6.7% year-on-year in the Postal Service’s financial year so far.
