USPS Management Formally Proposes a July 1 Postage Hike

Washington—USPS management formally announced on April 25 that it will recommend that its Board of Governors (BOG) raise rates across the board—excluding first class—by 3%, effective July 1, CATALOG AGE has learned. The announcement was made during the Mailers Technical Advisory Committee (MTAC) meetings here. Staring a $2 billion-$3 billion deficit for its fiscal year in the eye, the USPS says it can’t get by much longer on the rates approved by the Postal Rate Commission (PRC) last November. Since then, the USPS has twice resubmitted its rate case to the PRC only to be rejected twice.

The USPS BOG is expected to vote on the rate hike during its monthly meeting here on May 7. In order to overrule the PRC’s second decision earlier this month to keep the rates as is, the BOG must vote unanimously. The last time the BOG considered such an action was 10 years ago when governor Tirso Del Junco voted against overruling the PRC. He’s still a governor, although he couldn’t be reached for comment.

“The issue isn’t so much the amount of the increase—which is bad enough—but the concept here that the rate increase spiral continues,” says Direct Marketing Association president/CEO Robert Wientzen, adding that the USPS “seems to have a death wish. If the Postal Service continues to lose money and all it does is continue to raise rates, it will increase the speed of mailers going to other media. It’s establishing a principal that as it continues to lose money, it’ll just continue raising rates, as opposed to cutting costs.”

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