Governors Reject PRC Change in Bulk Parcel Return Service Fee

The U.S. Postal Service’s Board of Governors yesterday rejected a Postal Rate Commission recommendation to decrease by 13 cents the Bulk Parcel Return Service rate at its meeting in Philadelphia. The BPRS is currently $1.75 per piece.

The PRC, the oversight board of the USPS, suggested the 13-cent rate cut in a 37-page decision completed in April. It stated that the fee was based on fiscal 1998 data and that it was too high. It suggested a reduced rate of $1.62.

In 1997, the USPS instituted the BPRS, which allows cosmetic, hosiery and continuity club mailers to absorb return merchandise postage costs for opened and returned parcels by customers. Companies using the service must have minimum annual returns of 10,000 parcels that must be machineable and weigh less than 16 ounces.

Einar Dyhrkopp, chairman of the Board of Governors, said the recommendation was dismissed because the PRC failed to explain why the existing fee is unlawful, a requirement during a complaint process. He noted the appropriate manner to adjust fees is during the omnibus rate case process, which is currently under way. The USPS has also proposed changing the rate for the BPRS from $1.75 to $1.65 in the rate case.

Also during its monthly meeting, the board approved funding for upgrades to USPS’ high-speed sorting equipment for all letter mail processed by Optical Character Reader equipment. Postal officials said upgrades will increase address recognition rates by as much as 8 percent over the next year and save the agency a projected $64 million annually.

In other board activity, Charles Bravo, vice president, Information Platform, USPS, gave a presentation. He said the Information Platform links day-to-day operational data the USPS uses to manage the mail system to enable large volume customers to see their mailings as they flow through the mail stream.

“The Information Platform is a core component in our strategy to do e-business, connecting the physical hard-copy mail to electronic services,” he said. “The platform will capture information about mail as it moves through the mail stream.”

Bravo said that within two years, postal management will have more data about what, when, where and how much mail is coming their way — before the mail enters their operation — “and be able to place the right amount of staff and equipment in the right place at the right time.” As a result, he said customers could use this data to reduce costs and take advantage of new opportunities to grow their business.

The board also received an informational briefing on sponsorship of the USPS’ Pro Cycling Team. Gail Sonnenberg, senior vice president, sales, USPS, told the board that the sponsorship has been used to generate employee morale and millions of dollars in new revenue. She also said that the positive publicity the agency received following Lance Armstrong's victory in the 1999 Tour de France connected the notion of winning with the mail service which helps employees and customers feel good about the postal service as an organization.

“In a competitive environment,” said Sonnenberg, “this helps to make customers want to do business with us.”

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