Some Question PMG’s May 6 Postal Increase Date

Sep 21, 2006 10:36 PM  By

Speaking in Arlington, TX, at a conference of business mailers on Sept. 20, Postmaster General Jack Potter, said that he expects the new postal rates to take effect on May 6, 2007. But some observers say that, given the complexity of the pending rate case, a summertime implementation is more likely.

The postal rate case proposed on May 3 calls for an average rate increase of about 8.5%. But unlike the postage increases implemented this past January, which were pretty much 5.4% across the board, the pending rate case is much more variable. The proposed increase for standard mail is about 9%, for instance, while Priority Mail rates will go up an average of 13.8%, Express Mail an average of 12.5%, and package services an average of 13.4%. (See “Making Sense of the Postal Rate Case” for details.) The case also proposes additional sortation levels and new worksharing options.

Because the rate case is so sweeping, Ed Gleiman, former chairman of the Postal Rate Commission and now a consultant with the Direct Marketing Association, believes that July 1 is a more realistic date for implementation of the new rates. “May 6 is the earliest possible date unless the case is finished early and everything breaks exactly their way,” he says, adding that the Postal Rate Commission (PRC) has seldom a finished a rate case early.

By law, the PRC has up to 10 months to issue a recommended decision on the Postal Service’s request. The 10-month period for this case ends in March.

Typically, Gleiman says, the USPS gives mailers 60 days to gear up for the new dates. “Given the complexity of this rate case, 90 days rather than 60 days is a more reasonable amount of time,” he adds.

Indeed, when reached for a comment, the USPS backed off the May 6 date. “No official date has been set,” says spokesperson Dave Partenheimer. “We’re expecting the PRC recommendation by March 5 and possible implementation in spring 2007, possibly in May.”

MULTICHANNEL MERCHANT will be producing a Webinar, “How to Cope with the USPS Rate Case,” addressing the complexity of the pending changes and offering tactics to minimize costs. To register for the free Oct. 3 Webinar, visit www.MultichannelMerchant.com/events/webinars/.