In final regulations on mid-year rate reductions released this week, the Postal Regulatory Commission (PRC) created a Type 1-C rate adjustment that allows the U.S. Postal Service to reduce rates and bank the difference in relation to the cap based on the Consumer Price Index.
If, for example, the CPI is 2.5%, and it elects to file rate increases of 2% across the board, it generates some cap space that it could now hold in reserve to apply to decreases in other rate classes or bulk mailer promotions. USPS may not, however, combine the Type 1-C filing with any other rate filings.
“The new rules for Type 1-C cases provide the Postal Service with additional flexibility to propose and implement price decreases—including promotional rate incentives—without having to recalculate all available CPI pricing authority,” says USPS spokesperson Katina Fields. “At most, the new rules simply give the Postal Service the ability to change the timing of when it proposes its annual calendar of promotional rate incentives, which under the prior rules, had to be proposed with the annual price change.”
The PRC rules provide additional guidance designed to give great predictability to the mailing community in making decisions that rely on the Postal Service’s authority to adjust rates under the price cap.