USPS to Raise Catalog Rates by 1%

Catalogers received some good news today when the U.S. Postal Service filed for an inflation-based rate increase that would reflect less than a 1% rise in Standard Mail flats.

Overall, the proposed rate increase would mirror the current 1.74% CPI (Consumer Price Index) cap. The USPS proposal must be approved by the Postal Regulatory Commission. The proposed price changes are expected to generate $340 million for the balance of the fiscal year and $720 million, if implemented for a 12-month period.

Postage for Standard Mail flats – the category most used by catalogers – would increase by just 0.8%; carrier route flats by 1.4%, and high-density flats by 0.4%. Bound Printed Matter Flats would rise 0.7%. The new prices would become effective April 17.

The USPS in July had filed an exigent price proposal that was rejected by the PRC in September. The USPS appealed that decision to the U.S. Court of Appeals for the District of Columbia Circuit in November and awaits a decision.

Don Landis, vice president of postal affairs for catalog printer Arandell Corp., was delighted by the news. “We believe the industry will increase volume because of it.”

Joe Schick, director of postal affairs for printer Quad/Graphics, says “it’s good to see the lower increases for Standard Mail and Bound Printer Matter flats, although I’m disappointed to see carrier route increasing at a much higher rate than the overall average for flats.”

That trend, Schick adds, is a “continuation of what we have seen in the last couple of price increases, and does not bode well for what we expect will be the FSS (Flats Sequencing System) scheme pricing in the future. Remember that the USPS stated that FSS Scheme prices would be no more than the carrier route price at the time we transition to FSS pricing.”

Also, Schick says he would have liked to see the new prices implemented in the usual May timeframe. But the earlier date “was not unexpected given the USPS financial position.”