USPS Nears Another Rate Hike Proposal

Washington–Sources both within the U.S. Postal Service and outside say the agency will probably announce its proposal for a rate increase in mid-September or early October. According to most of the same sources, the new rates, which could go into effect as early as next summer, may result in catalogers’ paying an average of 15%-16% more for postage.

If the USPS Board of Governors (BOG) makes the rate case proposal following its monthly meetings on Sept. 10 and 11, the rate increases could be implemented in July 2002. (What with the necessary hearings, it takes at least 10 months for the Postal Rate Commission [PRC] to render its “recommended decision.”) But “implementing rates in time for next fall/holiday season will cause fits among mailers,” says Gene Del Polito, president of the Arlington, VA-based Association for Postal Commerce. “They’ll budget accordingly and mail less. So I think we’re looking at January 2003 implementation.”

Other sources say that another reason the USPS might hold off implementation until January ’03 is a political one: 2002 is an election year, and a postage increase could hurt Republican campaigns because of the USPS’s ties with the Republican-led government. And as Linn’s Stamp News, a Website devoted to postal affairs, points out, President Bush might name as many as three new postal governors–or one-third of the nine presidentially appointed seats–later this year to replace Clinton-named governors whose terms expire. They could “alter the aggressive nature that the current board had adopted toward higher rates,” according to Linn’s, by delaying implementation—or even by favoring a lower increase in rates.

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