As predicted by postal industry observers after an appeals court review of the exigent postal rate, mailers who had expected the surcharge to be lifted next month will be paying it for at least another eight months.
In releasing Order No. 2623 yesterday, the Postal Regulatory Commission (PRC) authorized the Postal Service to collect an additional $1.2 billion—in effect reassessing the recession’s cost to USPS from $2.77 billion to $3.96 billion.
The PRC essentially gave the Postal Service what it had asked for following the decision of the D.C. Circuit Court of Appeals. Judges had denied the Postal Service’s request to bake the 4.3% surcharge into the rate, but questioned the validity of the “count once” used to determine the financial effects of the recession. In the order released yesterday, PRC agreed that the procedure—which assessed decreased mail volume only in the year it occurred—was invalid.
Other portions of PRC Order 1926, which originally instituted the surcharge, will continue to remain in effect. These include mandates that the Postal Service reports incremental surcharge revenue to PRC within 45 days after the close of each quarter and that it gives 45 days’ notice of exigency’s ultimate removal.
“We are pleased that the Postal Regulatory Commission took action so quickly to decide against a permanent postal rate exigency price increase and compensate the USPS for their losses experienced during the Great Recession,” commented the Direct Marketing Association in a statement. “We and the mailing community look forward to continuing our partnership with the Postal Service through the remainder of the exigency period and beyond.”
The PRC’s new order declined a request by the Postal Service that a “new normal” analysis of rate leveling be accounted separately for each class of mail. When exigency ends, it ends—probably some time next spring.