Postal Service Files Market Dominant Price Change
Proposes an Additional $0.9 Billion in Annualized Contributions
WASHINGTON ̶ On January 15, the Postal Service filed with the Postal Regulatory Commission (PRC) a Market Dominant price change based on a Consumer Price Index (CPI) cap authority of 1.966%.
The Postal Service believes strongly in the value of mail and maintaining relevance for today’s customers, offering reasonable pricing, workshare incentives, and meeting its obligation to the American public to strengthen its financial condition.
All of the proposed price changes are based on CPI prices plus the Exigent Surcharge approved by the PRC in Docket Nos. R2013-10 and R2013-11.
Using the CPI, we estimate that this price change will generate an additional $0.9 billion in contribution on an annualized basis. If the PRC approves the filing, the proposed April 26 implementation of the prices will improve the FY 2015 financial outlook by $0.4 billion in contribution.
The key elements of the CPI case include the following:
• Above average price increases to address PRC concerns about underwater products
• Special Services simplification to reduce redundancy and improve customer ease of use
• Introduction of a separate Flats Sequencing System (FSS) pricing structure for Standard Mail and Periodicals
• Introduction of Carrier Route bundle and container pricing for non-FSS flats for Standard Mail and Periodicals
• Include four promotions (Earned Value Reply Mail, Color Transpromo, Emerging Technologies, Mail Drives Mobile)
Various industry webinars will be scheduled to offer depth and insight into the proposed changes.
In November, the Postal Service filed for the transfer of First-Class Mail Parcels to a competitive product and the elimination of Return Receipt for Merchandise as a special service. These matters are still pending with the PRC. For the purpose of this filing we are assuming that these products will remain in the Market Dominant category.
WASHINGTON — The United States Postal Service today filed notice with the Postal Regulatory Commission (PRC) to change Priority Mail prices, including a reduction in prices on average for businesses and other customers who use Commercial Plus and Commercial Base online shipping services. The price change will include a modest increase for Priority Mail prices at Post Offices and other postal retail outlets. The proposed changes, which would go into effect in September 2014, are intended to offer more competitive pricing and build on Priority Mail’s popularity with customers.
Sen. Tammy Baldwin (D-WI) was unsuccessful in getting Section 301 stricken from the Postal Reform Act of 2014 (PRA) in a Homeland Security and Governmental Affairs Committee markup session on January 29, but she may have succeeded in substantially altering it.
The offending-to-mailers rate setting clause put in the bill by authors Tom Carper (D-DE) and Tom Coburn (R-OK) would install the 4.3% exigent increase as the rate baseline going forward and increase the annual rate cap to CPI plus 1%. Additionally, it would strip the Postal Regulatory Commission (PRC) of its power to approve or deny rate increases and essentially hand a rubber stamp for price increases to the U. S. Postal Service. Read more.
Via Direct Marketing News
In granting a emergency postal rate hike last month, the Postal Regulatory Commission left both sides unhappy: The mailing industry, represented by an umbrella group known as the Affordable Mail Alliance, was displeased that the five-member commission agreed to any increase above the inflation rate; U.S. Postal Service leaders were frustrated that the boost will be temporary, ending once $2.8 billion is raised. Read more.
From USPS News Link:
CFO Joe Corbett has named Scott G. Davis the new Acting Controller VP. He is replacing Tim O’Reilly, who announced his pending retirement last month.
Davis previously served as SOX Management Control and Integration Manager. He also has worked as San Mateo Accounting Service Center Manager, Assets and Payables Manager, and District Finance Manager.
Davis holds a doctorate and master’s degree in business administration and is a certified public accountant. He is an Advanced Leadership Program graduate, a certified Lean Six Sigma Green Belt and is currently working on a project to obtain his Black Belt certification.
On December 24, 2013, the Postal Regulatory Commission approved an exigent increase that shot postal rates up 6% and sent direct mail marketers and their accountants back to their strategic models and financial forecasts to remake plans for 2014. Mailers had hoped the PRC would soften the blow with a lower percentage increase and were disappointed by the Commission’s ultimate decision to give USPS the rate it asked for. Read more.
Via Direct Marketer News
WASHINGTON — The U.S. Postal Service’s regulator approved price increases amounting to 6 percent on most mail, a step the service’s board called a “last resort” forced by Congress’ failure to pass cost-cutting legislation.
Posted by Angela Greiling Keane and Alan Levin, Bloomberg News
PRC Approves Postal Service Request for Exigent Rate Increase;
Rejects Permanent Price Increases
December 24, 2013
Washington, DC – Today the Postal Regulatory Commission issued Order No. 1926 in Docket R2013-11 partially approving a request by the Postal Service for an exigent rate increase to offset losses suffered as a result of the Great Recession of 2008-2009.
Today the proposed International and Domestic Market Dominant Federal Register Notices for the January 2014 price change were posted on pe.usps.com under the Federal Register Notices tab of the left-hand side. The official 30 day comment period will start once the Federal Register Office reopens and posts these notices on the federalregister.gov web site. We look forward to feedback from the mailing industry.
Via USPS RIBBS
The Postal Service is revising Mailing Standards of the United States Postal Service, Domestic Mail Manual (DMM®) to require the use of Intelligent Mail® package barcodes (IMpb) on all commercial parcels, and to require the transmission of supporting electronic documentation including piece-level address or ZIP+4® Code information. Included in these new requirements is a per-piece price adjustment for mailpieces not complying with the IMpb standards.
The Postal Service is also adding DMM reference to a future requirement to use a complete destination delivery address or an 11-digit delivery point validated ZIP CodeTM in the mailer’s electronic documentation.
Read more: Federal Register (Vol. 78, No. 243).
Visit USPS RIBBS website for information on Shipping Services File (SSP Version 1.6).