WASHINGTON – The Postal Regulatory Commission is hoping to expedite its reconsideration of certain rates based on the U.S. Postal Service Governors’ rate decision announced March 19.
This was a key message from Dan Blair, the new chairman of the Postal Regulatory Commission, who spoke at the annual Alliance of Nonprofit Mailers’ early morning breakfast at the National Postal Forum.
“The [USPS] will be filing a document outlining possible proposals for how they would like us to look at [the reconsidered rates], and from there we will establish a process,” Mr. Blair said. “We expect that to happen soon — even this week. This will be intended to make the process move quickly and efficiently so we can get back to what is on our plate, which is establishing a new system.”
The USPS Governors approved the PRC’s proposed 7.6 percent rate average increase and set May 14 as the date for the implementation of these changes.
However, the Governors requested reconsideration of the PRC’s rate recommendations for Standard mail flats, the Non-Machinable Surcharge for First-Class mail letters and the Priority Mail Flat-Rate Box.
Mailers, specifically catalogers, are anxious to hear the schedule, especially since they were hit with 20 percent to 40 percent rate increases. Catalogers are hoping the PRC lowers the rate and that the change takes place before the May 14 implementation date.
“It seems, from your statement, one would not expect this [decision] to languish for every long, which would be a good thing for all of us,” Tony Conway, executive director of the Alliance of Nonprofit Mailers, said in reference to Mr. Blair’s comments.
Mr. Blair said that he could not discuss the details of the decision, however.
At a luncheon later, Mike Plunkett, acting vice president of pricing and classification for the USPS, said the agency will file a two-page document that will explain its reasoning for its reconsideration as early as today.
“We will also ask the PRC to expedite the decision as quickly as they can,” he said.
Once the PRC makes its final decision, the Governors can reject it and send it back again, modify it or implement it, Mr. Plunkett said.
“This follows the same procedure as an omnibus rate case,” he said.
Mr. Plunkett also said that if the flats rates do not decrease, the USPS is not expecting catalog mail volumes to drop that much, although he is not sure right now.
“Some mailers will convert their catalogs to letters,” he said. “And some will pay the flat rate.”
Mr. Plunkett said he doesn’t think the rates will affect the first phase of the agency’s flats sequencing system, scheduled to go into affect in September 2008, but that it may affect the second phase.
The flats sequencing system program is designed to boost postal efficiencies in the processing, distribution and delivery of letter mail that will soon be applied to the sorting of flats mail such as large envelopes, magazines, catalogs and circulars.
Meanwhile, Mr. Blair reiterated some of the statements he made at the March 13 USPS/PRC regulatory summit, when he discussed filing another rate case.
At the time, he questioned whether or not it makes sense to litigate an omnibus rate case at the same time the PRC is trying to develop a new system under the new postal law. The PRC has 18 months to implement a new system.
“I think that everyone knows the amount of resources, time and effort [that] are devoted to a rate case, and if we have one last subsequent rate case, it will divert valuable attention, time, money and those resources from what we are trying to do, which is [to] establish a new system,” Mr. Blair said.
“The driver’s seat is the Governors of the USPS,” he said. “They are the ones who choose to file a rate case. But we will see what happens.”
Mr. Plunkett also discussed another rate case, and said that whether or not the agency files one under the old system, “the financial impact is going to be more or less the same. It’s more important that we get it right.”
He said the agency is planning to prepare for a rate case, but that the decision will not be made for several months At the breakfast, Mr. Blair said that the community has a role to play in whether or not a rate case is filed.
As he did at the summit, he asked mailers for their input as the PRC begins developing and implementing a modern system of rate regulation.
“The community certainly has the opportunity to file, and they should make their comments known,” he said.
The PRC issued an Advance Notice of Proposed Rulemaking in late February, asking for written comments by April 6 and responses to those opinions by May 6. The comments are supposed to be published on the PRC’s Web site at www.prc.gov.
Mr. Blair said that besides the next rate cases, the mailing community is encouraged to file comments regarding anything from service standards and the complaint process under the new law, to the exigency language in the bill, which allows the USPS to raise prices by more than the growth rate in the CP in certain circumstances.
Mr. Blair added that as of March 27, only one mailer, John Mulford, a New York-based direct marketing consultant, has filed a comment with the PRC.
“The postal service is planning to file its comments by April 6,” Mr. Plunkett said.