USPS One Step Closer to Raising Rates

The Postal Rate Commission (PRC) on Nov. 1 recommended increases in U.S. postal rates, all but ensuring a rate increase by mid-January. The commission did try to accommodate the Postal Service’s request for a 5.4% across-the-board increase, but increases for certain types of mail were significantly higher. Among the commission’s recommended increases:

• First-Class Mail – 5.2%
• Standard Mail Regular – 5.4%
• Enhanced Carrier Route – 5.5%
• Nonprofit Regular – 3.0%
• Nonprofit Enhanced Carrier Route – 12.3%
• Priority Mail – 5.4%
• Express Mail – 5.5%
• Parcel – 7.3%

The USPS Board of Governors will vote on the rates on Nov. 7. Bob McLean, executive director of the Mailers Council, an Arlington, VA-based industry group, expects the recommendations to be approved. “It’s rare for governors to do anything other than accept a rate case,” says McLean. “And since this is a ‘settled case,’ it’s extremely likely that they will approve all the PRC’s recommendations.”

Several industry groups, most notably the Direct Marketing Association and the Alliance of Nonprofit Mailers, have supported the PRC’s recommendations, citing the relatively modest rate hikes.

Neal Denton, executive director of the Alliance of Nonprofit Mailers says that the double-digit increase for enhanced carrier rates for nonprofit mailings is a bit deceiving. “Current laws say that nonprofit mailing rates must be 40% less than commercial mailing rates on materials of the same size and weight,” Denton explains. “You can’t maintain that huge discount and implement only a 5.4% rate increase.” Denton adds that the majority of nonprofit mailings are sent via regular nonprofit standard mail, for which the PRC recommended a mere 3.0% rate increase. “The continued 40% savings are much more important to our mailers than a rate increase that will only last a year,” he says. “We support the commission’s decision. It’s legally sound.”

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