USPS to delay April’s planned price increases

The US Postal Service has delayed its planned price increases that had been due to take effect on 26th April. The delay comes because some price increases proposed by the Postal Service have been rejected by regulators, USPS said this week.

The Postal Service had been proposing to increase its monopoly service prices by an average of almost 2%, including a 1.949% increase for First-Class Mail, 1.886% increase for Standard Mail, 1.965% increase for Periodicals and 1.964% increase for Package Services.

Single-piece one-ounce letter rates were to remain at 47c, with Forever Stamps at 49c.

On the competitive side, the Postal Service planned to keep its Priority Mail prices frozen at 2014 rates, but raise rates for shipping products as a whole by an average of 3.4%, including an 8% rise for Parcel Select and a 9.8% rise for Parcel Select Lightweight.

Parcel Return Service rates were to rise by 4.8%, with international products Global Express Guaranteed and Priority Mail Express International rising by 7.2% and 6.7% respectively, with Priority Mail International rates rising by 5.5%.

However, expected regulatory approval from the Postal Regulatory Commission did not come, with the Commissioners twice sending Postal Service proposals on Standard Mail, Periodicals and Package Services back for a rethink because of various technical problems related to information on pricing and the calculation of the Postal Service price cap.

As a result, the Postal Service said yesterday in a submission to the Commission that its Board of Governors had decided to delay all planned price increases, including price increases that were greenlit by the regulator.

Mail customers were told that the Postal Service did not want to see a “piecemeal” implementation of new prices, presenting mailers with added costs of dealing with staggered price changes. It will therefore wait until all price changes are signed off by regulators before putting any into force.

“The Governors’ choice to delay the implementation of price and classification changes for First-Class Mail, Special Services, and competitive products was primarily motivated by a desire to minimize the potential adverse impacts that might result from staggering the implementation of new prices,” explained the Postal Service chief counsel on pricing and product support, Daniel J Foucheaux in the filing.

“In particular, the Governors considered the complexity of the required programming changes, the potential cost to the supply chain as a whole, and other customer-specific complications. The Postal Service will announce a new implementation date for the price and classification changes for all affected market dominant and competitive products when it submits revised rates for Standard Mail, Periodicals, and Package Services.”