On the Scene at DMD: No New USPS Hikes—At Least For a Year

New York—Regarding the threat of yet another postal rate hike, mailers can rest easy—at least until next summer. According to deputy postmaster general John Nolan, following the upcoming July 1 rate hike, the U.S. Postal Service is “not going to raise rates for another year to a year and a half.”

Nolan made the pronouncement May 23 to a luncheon crowd of more than 1,000 attendees of the DMD Conference, held at the New York Hilton. “Am I up here today as a vendor, a supplier, or the great evil rate riser?” said Nolan, who is also chief marketing officer of the USPS, in beginning his speech. “No, I’m here as a partner.”

Among the topics he discussed was the need for postal reform. “Let’s not overcomplicate the issue of reform,” Nolan said. “We’re trying to create a growth engine for the mailing industry. But 76% of our costs are labor, and we have to think of how to control it and still be fair to employees.” He said that the USPS needs increased pricing flexibility along with a greater ability to introduce products.

As for the agency’s financial woes, “we’re not the only company in America that has had problems in this economy and that’s by fooled by the amount of fuel price increases,” Nolan said before adding, “Still, I’m not here to make excuses.”

As for why the Postal Service needs to raise rates again in July, just six months after a larger increase in the beginning of the year, Nolan explained that although the agency has made an additional 1.8 million deliveries so far this year compared to last year, it is out of cash and has a borrowing limit of only $15 billion this year. “If we had gotten the rates we had wanted the first time around” in January, he said, “we would have only had to raise rates once this year.”

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