The U.S. Postal Service will increase rates for standard mail flats 2.57% effective Jan. 27, 2013, pending approval from the Postal Regulatory Commission. That figure is also the overall average postal rate increase.
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In its filing, the USPS said it believes that above-average price increases for flats would impair its ability to enhance its revenue/contribution under the price cap. Over time, though, the USPS believes this will help push flats toward 100% cost coverage.
In its fiscal year 2010 Annual Compliance Determination (ACD) report, the PRC directed the USPS to increase the cost coverage of standard mail flats products through a combination of above-average price adjustments, consistent with the price cap requirements, and cost reductions until revenue for these products exceed attributable costs.
In the latest filing, however, the USPS said that price increases for standard mail flats would be counterproductive under the statutory price cap, striking a balance through the following factors: the PRC’s finding of noncompliance for standard mail flats in the 2010 ACD; the USPS’s ongoing concern about the long-term health of the catalog industry; and the USPS’s belief that above-average price increases for flats (at the expense of letters) will impair its ability to enhance revenue and contribution under the statutory price cap.
Rates for high density saturation parcels will increase 2.27% next year. Postal rates increased an average of 2.1% this year.
Jim Tierney ([email protected]) is a senior writer for Multichannel Merchant. You can connect with him on Twitter (TierneyMCM) and LinkedIn, or call him at 203-358-4265.