USPS asked to delay increase in Standard Mail flats

The Direct Marketing Association, the Association for Postal Commerce, the Mail Order Association of America and the Parcel Shippers Association have asked the USPS Board of Governors to delay implementation of new postal rates for Standard Regular and Nonprofit Mail until after July 15.

The four associations delivered the letter, addressed to James Miller, chairman of the board, to USPS headquarters April 30.

“This is to request that the Board of Governors act immediately to hold in abeyance all rate changes recommended for Standard Regular and Nonprofit Mail until the later of July 15th or a reasonable time following the resolution of the Governors’ March 29 decision requesting reconsideration of the PRC-recommended rates for flat-shaped Standard Mail,” the letter reads.

On Feb. 26, the PRC issued its recommended decision on the current omnibus rate case. On March 19, the USPS governors endorsed the PRC’s rate recommendations with three limited exceptions: Standard Mail flat rates, Priority Mail Flat Rate Box and First-Class Mail nonmachinable letter surcharge.

On March 29, the PRC issued an order establishing procedures for further consideration of these issues and invited comments from interested parties with a deadline of April 12 for initial comments and April 19 for reply comments on the issues returned by the governors.

“As you and your fellow Governors noted in your decision of March 19th,” the letter says, “the much larger increase for flat mailers recommended by the Commission substantially increases the risk that a substantial portion of flat mail would disappear entirely rather than being converted to letters, with potentially serious adverse financial consequence on Postal revenue. We share this concern over future volumes and meeting revenue needs of the Service.”

The associations said that, as an industry, they support the underlying rationale for relying more heavily than in the past on shape as a driver of costs and, therefore, rates: “[W]e had hoped that this matter would have been resolved in advance of the May 14th date for implementation of rate changes.

“However, given recent procedural developments associated with a request to re-open the evidentiary record, it now appears unlikely that the PRC will complete its deliberations in time to avoid implementation of the damaging rates initially recommended by the PRC.”

The letter referred to the fact that on April 27, the PRC announced May 4 as the new deadline for submitting comments on its reconsideration of certain provisions of the current postal rate case. May 11 is the filing date for reply comments.

The new deadlines stem from the PRC’s order on two procedural motions affecting reconsideration of the rates for Standard Mail flats.

The two procedural motions come from notices filed by the Coalition of Catalog Mailers.

The PRC granted a late notice of intervention filed by the CCM, but denied CCM’s motion to reopen the 2006 postal rate case and supplement the record.

In its April 12 motion, the CCM asked to delay the new rates for flats set to go into effect on May 14. The deadline was suspended, pending the resolution of CCM’s procedural motions.

The associations’ letter says that if rates are changed on May 14, “Standard Regular and Nonprofit Mail users – and the Postal Service, as well – face the prospect of a second round of rate adjustments once those deliberations are completed and the Governors act.

“Two rounds of rate adjustments in fairly short succession will be costly, confusing, and will compound the negative effects of the initial large increase recommended by the Commission for flat-shaped Standard mail.

“Although delaying implementation of all Standard Regular and Nonprofit Mail rate adjustments until at least the July 15th date previously selected for changes in Periodicals rates will result in a modest loss of revenue for the Service prior to the commencement of the rate case test year, we believe the long-term benefit of a stable Standard Regular and Nonprofit Mail customer base far outweighs any short-term financial losses for the Postal Service.”

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