Rate Case Settlement Clears Hurdle

At press time, the U.S. Postal Service’s effort to expedite its rate increase by bypassing a full rate case review was all but ready to roll. Under the settlement agreement expected, new postal rates will be implemented on June 30.

Intervenors — organizations or individuals with postal interests who had previously signed on to testify for or against the USPS rate case — had until Jan. 18 to protest the settlement agreement proposal. Only one party, the American Postal Workers Union (APWU), the USPS’s largest union, stepped forward. The APWU’s criticism focuses solely on the difference between the 8.8% increase for the first class stamp (to $0.37) vs. the 12.2% increase for bulk first class mailers (to $0.275 a piece).

Although the APWU was scheduled to testify by the end of January, key officials at both the Postal Rate Commission (PRC) and the USPS said they didn’t expect the testimony to keep the PRC from moving forward on the abbreviated rate case. “We want everybody to air their differences,” says PRC chairman George Omas, “but I’m told it won’t take everybody” to agree to the settlement. The USPS collected signatures from 50 other intervenors favoring approval of the settlement, including the second-largest postal union, National Association of Letter Carriers; AOL Time Warner; McGraw-Hill Cos.; and United Parcel Service.

In making its final motion for stipulation and agreement to the abbreviated rate case, the USPS did propose three minor standard mail-related changes to its original rate case filing last fall — all backed by the 50 signatories. While the changes apply to saturation mailers that do blanket mailings in specific neighborhoods, rather than national catalog drops, some retailers that use enhanced carrier route (ECR) subclass for local traffic builder mailings, such as Sears, J.C. Penney, and Macy’s, could be affected by the following adjustments in the postal proposal:

  • The minimum piece rates proposed for saturation letters in the ECR subclass are reduced by $0.001.
  • The basic piece rate for ECR flats is reduced from $0.071 to $0.068.
  • The proposed pound rate increases from $0.58 to $0.60.

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