Tag: USA

The U.S. Postal Service today announced that postage costs for nonprofit and other mailers will be set using a new approach pegged to inflation.

The new system enables the Postal Service to increase postage rates
annually — more frequently than it has in the past — but requires the increases to be no higher than the rate of inflation. To determine inflation, postal officials said they will rely on the most recent monthly average compiled by the Bureau of Labor Statistics.

Organizations that represent charities welcomed the news.

Previously, new rates were the result of a cumbersome process in which an independent body spent months in hearings, deliberating over research and comments submitted by charities and other organizations that send a large volume of mail. That process will no longer take place.

With the new system, nonprofit organizations are likely to see significantly lower postage increases than in the past, albeit more frequent ones. For example, postal officials noted that a recent monthly inflation average was 2.3 percent, much lower than the 6.7 average increase in postage for standard mail, the class of mail used by charities most frequently, that took place last spring.

While the law authorizing the new rate-making system requires the Postal Service to give a 45-day notice before postage costs go up, postal experts said that a longer notice is more likely, because the service and mailers need more time to adjust their mail-processing and printing schedules. Mr. Conway speculated that a 90-day notice is likely.

US Postal Service’s Chief Financial Officer’s report on end of year FY2007 performance

The Postal Service Governors announced today future prices will be adjusted using new regulations issued by the Postal Regulatory Commission (PRC) on Oct. 29. Consistent with the Postal Accountability and Enhancement Act of 2006, future price increases will be capped at the rate of inflation for mailing services.*

The Governors had the option of filing one last rate case under the regulations used since 1971 but voted to proceed with the new pricing regulations.

“We thank the Postal Regulatory Commission for completing the new rules eight months ahead of the statutory deadline,” said Postmaster General John E. Potter. “This delivers one of the main goals of the new law for business mailers—a predictable price schedule.”

The new pricing regulations give the Postal Service added flexibility for shipping services.** “We intend to use this new flexibility to grow our competitive business,” said Potter, “offering volume discounts and contract pricing.”

“There are still many details to be worked out, but we look forward to partnering with the PRC and our customers to maximize the advantages of the new pricing rules,” Potter said.

*Mailing services include First-Class Mail, Standard Mail and Periodicals.
**Shipping services include bulk parcels and expedited package services such as Priority Mail and Express Mail.