Postal Rate Increase, Act III (recap of DMA Webinar)
On Monday, March 19, the USPS board of governors approved the rates that were recommended late last month by the Postal Regulatory Commission, paving the way for most of those new rates to go into effect May 14. The board of governors allowed three of those rates under protest, and resubmitted them for consideration again by the PRC. Those three rates included: 1) the rates for standard mail flats, 2) a surcharge on first-class, non-machinable mail, and 3) the cost of a flat-rate Priority Mail box.
According to Jerry Cerasale, the DMA’s senior vice president for government affairs, who spoke in a March 20 virtual seminar on the postal rate crisis, the Postal Regulatory Commission is required to reconsider those rates allowed under protest. “Clearly the governors understand this was a significant rate shock,” Cerasale says. There is no official time limit, and no standard procedure for reconsidering rates, but the governors have asked for quick action—as has the DMA. Historical precedent suggests that the commission will allow a period of public comment.
The bottom line for mailers affected by the standard mail flat increase: You need to assume, for planning purposes, that the rate will go into effect as proposed on May 14. Even if the PRC decides to mitigate the proposed rate, there is no way to know when they will make that decision. The most prudent course of action, Cerasale says, is to plan for the rate recommended originally by the commission. “Do not expect a change,” he says, “And if there is a change, we don’t know how big it will be.” And if rates are reevaluated after the May 14 deadline, there will be not retroactive reimbursement to mailers.
Cerasale cited figures that range from a possible 36%–40% rate increase for a 3–4-oz. national catalog that was not presorted or drop-shipped, to 20%–22% increases for flats drop-shipped “fairly well down in the system.” Suggestions on how to reduce mailing costs, from Kevin Conte, director of mailing solutions, Group 1, for Pitney-Bowes, and Larry Buck of SOS Consulting, emphasized careful attention to fixing addresses, applying all possible automated mail uplift and confirmation technology, and shifting to “intelligent bar-coding” across all applications sooner rather than later.
If you haven’t already figured out what the rate change will mean to your business, you can go to these sites for more information:
www.the-dma.org/postal (Click on PRC Recommended Rates for Standard
Mail or For First-Class Mail.)
www.usps.com/ratecase (Click on box with “Domestic Rates May 14.”)