While the U.S. Postal Service Board of Governors (BOG) considers the 700-page rate case recommendation from the Postal Regulatory Commission (PRC), the Arlington, VA-based Mailers Council is asking the board to adopt an implementation period of at least 120 days to allow mailers to prepare for the wide-ranging new rates and rules changes.
In a March 8 letter to BOG chairman James C. Miller III, council executive director Bob McLean asks that the minimum 120-day request begin only after the BOG’s decision is published in the Federal Register. “In a series of meetings over the last several months, ranging from first-line managers to the Deputy Postmaster General, we have expressed the need for adequate time between final implementation of new rates and regulations and the implementation date,” the letter reads. “Our white paper on this issue, previously delivered to your office, explains in detail why adequate preparation time is beneficial because it makes rate cases less difficult, litigious, and costly for both the Postal Service and its customers.”
Last August the Mailers Council, a coalition of mailers and mailing associations, released a research paper detailing the benefits of a standard implementation period for the Postal Service to follow when raising rates. The paper called for a period of at least 90 days, longer in more-complicated rate cases. No law or postal regulation currently mandates the minimum number of days between the completion of a rate case and the date that the USPS implements the changes, but the implementation period typically has ranged from 30 to 60 days.
Mailers and postal employees alike need sufficient time to plan for new rates, the research paper says, particularly in cases, like the current one, that involve substantial rules changes and systems updates. “We don’t assume anything until the Federal Register notice,” McLean says. “There can be changes right up to the last minute. The Postal Service has a hard time understanding. Preparing materials for a rate case like this is a perfect example of why you don’t want to do anything until it’s necessary.”
Unlike the rate hike implemented in January 2006 — 5.4% across the board — the pending case is much more varied. The PRC’s recommendations call for an average rate increase of 7.6%, less than the U.S. Postal Service’s proposed 8.1% hike. It recommends an average Standard mail increase of 9.3%. But for some catalogers, rates would increase by appreciably more.
Price recommendations for flats, for example–the category affecting most catalogers–is appreciably higher than the increase originally proposed by the Postal Service. For flats weighing less than 3.3 oz., the PRC is recommending an increase of roughly 20%, instead of the originally proposed 9%-12%. Since the Feb. 26 release of the recommendations, the USPS has received more than 1,000 pieces of correspondence regarding the PRC’s recommendations.
The tentative implementation date for the pending rate case is May 6. If the board approves the PRC’s recommendations next week, that would allow mailers less than two months before the implementation date. “Three years ago we tried to do this without success,” McLean says. Although time is of the essence, McLean hopes the letter sets the stage for future consideration. “There are so many new faces in the Postal Service who don’t understand how we work,” he adds. As for the chances of the request, McLean says: “I’m not sure because we have so many new board members probably unaware of the needs of mailers to prepare for a rate case.”
Historically, McLean says, the BOG usually accepts the PRC’s recommendations. “In many rate cases, they’ve taken exception with small matters, only occasionally making exceptions to big issues,” he says. “The letter is trying to educate these new governors on what we consider a pressing issue. Give us a standardized period of time, a minimum number of days. Right now it varies from case to case. We never know how much time.”
MULTICHANNEL MERCHANT produced two Webinars that look at the effects of the pending postal changes on mailers. You can access those Webinars for free, on demand, at multichannelmerchant.com/events/webinars/rate_update/ and multichannelmerchant.com/events/webinars/rate_case_2006/.