Tag: USA

There is only a “slight” chance that the pending rate case set to be implemented by the U.S. Postal Service on May 6 could be delayed, and then only by one week, according to Gene Del Polito, president of Arlington, VA-based Association for Postal Commerce.

While May 6 is the date that has been widely publicized, USPS spokesperson David Partenheimer said today that the Board of Governors would set the implementation date after the PRC votes on its recommendation. “At this point, we’re still expecting sometime in May,” Partenheimer tells MULTICHANNEL MERCHANT. “We anticipate the new rates will probably take effect in May, possibly May 6.”

H. Glen Walker, chief financial officer/executive vice president for the USPS, said last year it would cost the Postal Service about USD450 million for each month that the rate case is delayed. Last September, Postmaster General Jack Potter said that he expects the new postal rates to take effect on May 6, 2007.

But Del Polito says if an implementation delay occurred, it would likely only be for a week. The rate case calls for an average increase of about 8.5%. But unlike the rate hike implemented in January 2006 — 5.4% across the board — the pending case is much more variable. The proposed increase for Standard Mail is about 9%, for instance, while package services will rise an average of 13.4%.

The U.S. Postal Service in January released revisions to its proposed mailing standards. With the rate case, which it introduced in May 2006, the USPS is trying to align how much it charges for postage with the actual costs of processing the various types of mail. For that reason, a mail piece’s shape will be as critical as its weight in determining its postage.

The current price structure is based primarily on weight, but the Postal Service has determined that certain large but lightweight mail pieces actually cost more to process than some smaller, heavier pieces. Another goal of the rate case is to encourage mailers to take on more of the mail preparation tasks, such as sorting, by offering work-sharing discounts.

The buzz at the quarterly Mailers’ Technical Advisory Committee meeting yesterday at postal headquarters was a surprising announcement by Postmaster General John E. Potter: The agency will expand its Move Update rules to include advertising mail and change the frequency of the program.

Under current rules for Move Update, which is designed to reduce undeliverable-as-addressed mail, First-Class mailers can receive automation or presort rates when they update addresses every 180 days using the Address Change Service, NCOALink or another USPS-approved service. Now the program will be expanded.

Mr. Potter said the agency would give mailers 180 days to implement the new rules after they are finalized via the Federal Register. He did not mention a Federal Register notice date.

Mr. Potter said there would be serious consequences for people who don’t use the Move Update system, although he did not elaborate.

A key reason for the change, according to Mr. Potter, was to make sure that the people who want to receive mail are receiving it — and that those who don’t aren’t receiving it — given the current rash of do-not-mail bills that have cropped up in nine states this year.