USPS Rate Case Expected to Seek Big Increases

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Mail industry insiders say the U.S. Postal Service's next rate case, expected to be filed in October, could call for some of the biggest increases in recent years.


"I'm damned near certain that the USPS is going to drop this case in the next few weeks, probably after the Oct. 2 USPS Board [of Governors] meeting," said Neal Denton, executive director of the Alliance of Nonprofit Mailers. "The overall size of the filing is still unknown, but I believe that periodicals should expect proposed increases in the neighborhood of 15 percent."


Other insiders said rates for other classes of mail also could rise 10 percent to 15 percent and that there may be a 3-cent increase in the First-Class letter rate, bringing the cost of a First-Class stamp to 37 cents.


If an application for higher rates is filed with the Postal Rate Commission in October, the USPS could implement the new rates 10 months after the independent panel reviews the case.


Some postal officials, however, doubt that the governors would implement increases in fall 2002, which is a heavy mailing period in an election year.


New appointees to the Board of Governors, however, could change things.


President Bush is expected to make at least two appointments to the board this year. Bush also is expected to name a new PRC chairman, a move that could overshadow the governors' appointments.


Meanwhile, the mailing industry is waiting to learn the size of the USPS' losses in fiscal 2001. The loss was predicted to be $3 billion earlier this year, but estimates have dropped sharply to $2 billion or less. The USPS' fiscal year ends Sept. 7, and year-end estimates are expected to be announced Sept. 11 at the board's meeting in Washington.


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