Standard-A and periodical mailers are gearing up to fight a possible new postal rate increase but are concerned about the costs of litigating a new rate case after having done so just last year.
Though the U.S. Postal Service has not formally stated how much of an increase it will seek, the agency's Board of Governors said that the USPS must begin preparing a new rate case to ensure its financial future. Insiders said the increase would be hefty, with increases averaging 15 percent to 20 percent and even higher for magazines. The USPS, which faces a possible net loss of $3 billion this year, is reportedly seeking $6 billion in new revenue.
The Magazine Publishers of America expressed outrage and disbelief yesterday over reports that the U.S. Postal Service will request another rate increase for all classes of mail this summer averaging 15 percent to 20 percent and even higher for magazines.
“The postal service’s new plan to impose a whopping rate increase is simply unbelievable,” said Nina Link, president and CEO of the MPA, Washington. “It would follow on the heels of a 9.9 percent rate increase for periodicals that took effect only a few short weeks ago.
“The impact of such an increase will be felt by tens of millions of households across America who every day receive magazines, parcels, letters and every other kind of mail,” Link said.
The MPA also expressed concern about the future of the U.S. postal system.
“The country needs an affordable, dependable postal system providing universal service far into the future,” Link said. “We want to keep the mailbags full. Continuously increasing rates is precisely the wrong approach. A private sector business concerned about its future would cut costs and rationalize operations before raising prices. The postal service should do the same.”
Link said the MPA was “calling on the postal service to freeze hiring and take other actions rather than strap a huge postal rate hike on the backs of consumers.” Link said other actions should include “leveraging existing assets, eliminating unneeded capacity and using existing borrowing authority to smooth out annual fluctuations. Passing along increasing costs by raising prices should be last on the list of alternatives explored by the postal management. These actions would be a sensible alternative to raising rates at this time while enabling the Congress, the new administration, the USPS Board of Governors and the incoming postmaster general to fully review the future of the postal service.”
