Live from the National Postal Forum: USPS to Ask for Rate Hike Within a Month

Apr 04, 2006 5:18 PM  By

Orlando, FL–Addressing the 6,500 attendees of the National Postal Forum on Monday morning, Postmaster General John “Jack” Potter said that it is likely that the USPS will file a case as early as later this month.

Potter gave no specifics regarding the size the proposed rate increase, but he hinted that it would likely be only a single-digit percentage increase, similar to this year’s 5.4% hike. He noted that this past January’s increase could have been delayed until next year, but that would only have resulted in a larger increase down the line. If rate increases must be made, he said, it’s generally better for mailers if they are small and incremental.

“The Postal Service has avoided $2.1 billion in costs since 2000, but we can’t cut fast enough to offset inflation,” said Potter. Potter said that mail volume reached a new high of 212 billion mail pieces in 2005, despite having to eliminate more than 100,000 jobs. He also noted the Postal Service’s high levels of customer satisfaction.

With both postal reform and future rate cases top of mind for most mailers, Potter was joined by the president of the USPS Board of Governors (BOG), Jim Miller. Potter then “went to the video tape,” and revisited Miller’s remarks on reform from last year’s National Postal Forum, during which Miller said he had asked Congress to revoke the escrow account imposed on the USPS and to restore responsibility for the military pensions of postal employees to the Treasury Department.

While both men joked that viewing the footage was just like “déjà vu all over again,” Miller told the crowd that the BOG was united in trying to make reform work. He said that it was crucial to negotiate an equitable contract with postal unions so that an outside arbitrator would not be granted the right to choose the fate of reform.

What’s more, Miller said, the BOG has been working with both the Senate and the House to focus on an opportunity to fine-tune the proposed reform legislation (see ”It’s Unanimous: Senate Passes Postal Reform Bill”) “Congress requires the USPS to break even,” Miller said. And he reiterated the need to get beyond reform legislation on Capital Hill and try to return to the USPS’s main focus – to respond to the needs of mailers.

“The key player here is the White House,” Miller continued. “They are interested in making the USPS a more efficient enterprise. And it’s important that we get this legislation right. A bad bill…is worse than no bill.”

Potter also spoke briefly about plans for the 2006-2010 Strategic Transformation Plan – a type of postal roadmap for the future. The plan focuses in part on changes in the mail community through technology– intelligent mail, with people paying bills electronically, mailers taking advantage of barcode technology for cost savings, and a greater focus on postal work share programs.