Tag Archives: Postal Rates

PRC is Threatening Your Livelihood

The Postal Accountability and Enhancement Act (PAEA) dictated that the Postal Regulatory Commission (PRC) conduct a study of the past decade to determine if the current system for regulating rates and classes for Market Dominant Postal Products was achieving its objectives.

Those results were published on December 1, 2017 and the PRC concluded that the current system achieved some of its goals, but overall the system has failed.

The PRC issued a Notice of Proposed Rulemaking that would give the USPS the authority to raise rates by at least 2% above the CPI for each market dominant rate class for five years.  It also allows for an additional 1% increase if they hit service and productivity standards, and will be required to raise prices for “underwater products” (Periodicals and Nonprofit mailings for example) by a minimum of an additional 2% above the price change authority to move prices toward full-cost coverage over time.  This could drive rate increases for standard letters (officially known as Marketing Mail Letters) up by 27% and flats by more than 40% over the next  five-years.

These proposed changes to the current postage rate ceilings are inflated and threaten the vitality and efficiencies of the postal service and our industry as a whole.

The PRC is an independent agency that has exercised regulatory oversight over the Postal Service since its creation by the Postal Reorganization Act of 1970. It is composed of five Commissioners, each of whom is appointed by the President and subject to confirmation by the US Senate, for a term of six years. To ensure bipartisanship, not more than 3 of the Commissioners can belong to the same political party.

The PRC is tasked with ensuring transparency and accountability of the USPS and fostering a vital and efficient universal mail system.  They act as an independent regulator for engaging postal stakeholders to promote a robust mail system through objective regulatory analyses and decisions.  Normally, the PRC does not have the final say when it comes to postage rate increases.  That is for the USPS Board of Governors.  However, this is not a rate case.  This is a 10-year review of the system which the PRC reigns supreme.

The argument that the USPS has accumulated losses of $59.1 billion include the $54.8 billion needed to prefund their already financially healthy retiree health plan; even though no other entity is required to do the same.

The current regulations force the USPS to reduce costs and raise efficiencies which is needed now more than ever as many economists expect inflation to increase.

Thursday, March 1, 2018 marks the end of a 90-day comment period.  There is another 30-day (one month) period allowed for replies to comments before a ruling can be implemented.

We are very active with industry associations and sit on several industry boards.  Together we are  fighting to prevent this travesty from happening.  The industry will continue to stand united and push the USPS to focus on rate increases specifically tied to cost efficiencies only.  We will keep you abreast of the situation as it unfolds.

 

 

 

 

January USPS Rate Increase

BEB UP ON THE HILL LOGOThe Postal Service has signaled for months that it will be filing for GUEST BLOGGER TOM GLASSMAN 2a general price increase later this year (calendar below). Publication of revised mailing standards (some below) that would also take effect in January.  Much of this follows a pattern the Postal Service sought to establish years ago: regular price changes announced in the fall and effective in January. The question of consequence for Customers, is less whether there will be a price change as how much an increase will be. The amount that prices for market-dominant mail can increase is tied to the CPI-based price cap, including how much “rate authority” from previous rate filings remains unused. As of the July CPI (based on the June CPI), was at an annualized cap of 0.676%. However, under the rules for calculating the CPI cap, because it’s been more than a year since the last general price increase (filed in January 2015 based on the November 2014 CPI), the applicable formula yields a higher cap (0.713%). To this would be added any unused authority (0.308% for First-Class Mail, 0.403% for Standard Mail, and 1.430% for Special Services) to determine the limit on any rate increase at the class level.   OK NOW, In English, take the CPI plus unused CPI would come to around 1.5 to 2 percent as I noted last night. Two big issues that I can NOT get my hands around would be, Flats are not covering their cost and drop ship discounts are not covering the cost so I anticipate a slightly greater increase in flats and a decrease in the drop ship discount by .5 to 1 cent.  If I “mail geeked” you and want help translating just give me a buzz.  Below is the expected time frame and a list of structural changes that I am anticipating.

Time Frame expected to be used by USPS

August: share technical changes and draft postage statements (without pricing) with developers

August: share draft mailing standards

September/October: Final PRC Market Dominant

November: Competitive filings

November/December: Publish final prices, mailing standards

1/8/17: target implement pre-release

1/22/17: targeting price effective date

 

Structural changes under consideration are as follows:

 

First Class

o Combine AADC and 3D auto letters for First-Class Presort (currently the same price)

o 3rd Ounce free for First-Class commercial letters

o First-Class Mail Promotions

 

Standard Mail

o Combine AADC and 3D auto letters for Standard Mail presort

o Simply Standard Auto letters by eliminating the per-pound rate between 3.3 and 3.5 ounces. Letters would be the same price from 0 up to 3.5 ounces.

o Increase Standard Mail flats piece price weight break from 3.3 to 4.0 ounces

o Standard Mail promotions (sent you the proposed changes about two weeks ago)

o FSS Standard Mail revert to previous structure

 

Also noted at the MTAC meeting was the issue with DSCF letter Mail. There was a change in DSCF pass-through calculation from FY14 to FY15. DSCF letter pass-through went from 57.4% in the FY14 ACD to 225% in FY15 ADC. FY15 discount $.043. The FY15 Cost avoidance – $.02 per piece.  Meaning the USPS is giving us a 4.3 cent discount for drop ship where it should have been 2 cents

The plan instead is to have modest increases over a number of price changes.

2016 BEB Postal Guides are Here

2016 POSTAGE RATES GOING DOWNBack in 2014, the USPS submitted an emergency rate increase (also known as an exigent rate case) to help raise $4.6 billion of lost revenue.  Congress approved it with the stipulation that once the lost revenue was recuperated, prices had to go back to the previously approved rates from May of 2015.   The money has been recaptured and postage rates will DECREASE effective April 10, 2016.  A first-class stamp will cost 47 cents, down from its current 49-cent price.

A digital version of our handy BEB Postal Guide with the new rates is attached below.

As our economy slows down and companies tighten their belts; the rate decrease offers (much needed) relief to marketing budgets.  Be sure to take advantage of the discounted rates while they last.  Step up your direct mail and be sure to mirror your direct marketing on your social sites for that extra boost.

Postal rate changes are based on the CPI (Consumer Price Index) which will most likely justify a rate increase in January of 2017.   Don’t let this unusual opportunity to mail for less pass you by.

2016-04 RATE DECREASE BEB POSTAL GUIDE

If you would like to receive a FREE printed copy of the 2016 BEB Postal Guide (printed on 8.5 X 11 Card Stock), click here.

Postal Rate Decreases Coming in April

BEB POSTAL RATES DECREASING APRIIL 2016The USPS & PRC (Postal Regulatory Commission) have started preparation for the end of the exigent surcharge that’s been in place since January 2014.  The surcharge removal is projected to end in early April, but that date is only a forecast at this point, as it’s based solely on when the full amount authorized to be derived from the surcharge ($4.63 billion) will be collected.

For obvious reasons, the PRC is interested in ensuring that the correct date is set for the end of the surcharge and, accordingly, had directed the Postal Service to provide biweekly updates on the amount collected beginning in the postal quarter when the end of the surcharge was anticipated. Also, the agency must give 45 days’ notice of the end of the surcharge.

In its February 14 report, the USPS explained that it had collected an estimated $4.347 billion, including $827.1 million so far in FY 2016.   For the 750 days that the surcharge had been in effect through February 14, the USPS averaged about $5.796 million per day in additional revenue. At that rate the total should take just over 799 days to collect, or until about April 3, 2016.   As the PRC has noted, the USPS is entitled to collect only the amount the commission authorized, and there’s no process for refunding any excess collected from ratepayers, so the need to be as precise as possible in setting the end date is clear.  In the meantime, the surcharge revenue continues to accumulate, mailers look forward to lower rates in April, and the Postal Service worries how it will replace the 4.3% of revenue.

See below for rate changes and comparisons:

2016-04 NP STANDARD LETTER AND FLAT COMPARISON

2016-04 STANDARD LETTER AND FLAT COMPARISON

2016-04 FIRST CLASS AND PC RATE COMPARISON

If you have questions or need additional information, please don’t hesitate to contact us!

 

New Delivery Standards for Standard Mail

New delivery standards for Standard Mail will take effect on July 1, 2015.  See below for details:

USPS Standard mail delivery standardsWe have experienced slower than normal standard mail delivery locally and regionally.  See details on what Houston mailers are experiencing and read our recommendations for the coming back to school and holiday seasons.  Read More…

USPS Rate Hike Approved

Postal Rate Hike Approved by BEB Business Extension BureauAfter three tries, the Postal Regulatory Commission (PRC) finally approved the proposed prices and classifications for Standard Mail, Periodicals, and Package Services yesterday.

The new pricing and classification changes for all market-dominant mail classes and competitive products take effect on May 31, 2015.   Below are the new rates:

2015-05-31 POSTAL RATES Standard & First Class 2015-05-31 POSTAL RATES NON PROFITWould you like a 2015 BEB POSTAL RATE CARD?  These cards are double sided with nonprofit rates on one side, and for profit Standard & First-Class rates on the other.  They also include handy dimension minimums/maximums and other mailing requirements.  Printed on sturdy card stock and measuring at 9″ high X 8″ wide, these cards are excellent reference material and they are FREE!  If you would like one mailed to you, click here.

USPS Rate Hike Remanded Again

POSTAL POOCH RATE HIKE REMANDED AGAIN 1Two weeks ago the Postal Regulatory Commission sent the Postal Service’s rate and classification proposals for Periodicals, Standard Mail, and Package Services back for corrections and amendment. Last week the revised proposed rates were resubmitted, and for a second time, the PRC remanded the rate case stating the Postal Service has not complied fully with applicable statutory and regulatory requirements.  Once the rate proposal is updated, the PRC will allow 7-days for public comment.  In a statement released last week, the PRC also noted; “The Postal Service states that the revised prices are scheduled to go into effect on April 26, 2015. … Pursuant to [statute], no rate shall take effect until 45 days after the Postal Service files a notice specifying that rate.”

Our good friend and postal expert, Leo Raymond of Epicomm wrote; “Though I’m not a lawyer, that last sentence seems to sink the Postal Service’s plans for an April 26 implementation date — at least for Periodicals, Standard Mail, and Package Services. (The proposed rates and classification changes for First-Class Mail, and competitive products were approved earlier, and there’s no legal reason why implementation of those rates would have to be delayed, though implementing them separately would be a major headache for mailing companies and their software providers.)”
If the USPS HQ can update and resubmit by Monday, and allowing for the seven days for comment, add another few days for the PRC to deliberate, and assuming it doesn’t remand the filing a third time, it’s reasonable to not expect an order on final rates in April. This means that it is possible that the 45-day clock won’t start until the date of the PRC order putting rate implementation (for the three classes involved at least) into mid-May.

We’ll keep you posted as things unfold.

PRC Approves Rate Hike effective Apr 26

April 26th Rate HikeThe Postal Regulatory Commission (PRC) has issued orders approving some of the price changes proposed earlier by the Postal Service. After its review of the USPS filing, discussion of the input from commenters, and its own analysis, the PRC found that “the planned” prices for First-Class Mail do not violate the price cap.

The PRC has also approved the price increase for competitive products (proposed on January 26), except for some rates associated with products whose transfer from “market dominant” to “competitive” remain under review.

Rate increases will take effect on April 26, 2015. You can view the new rates by clicking below:

STANDARD NONPROFIT LETTERS AND FLATS

STANDARD LETTERS AND FLAT | FIRST CLASS LETTERS & POSTCARDS

Downtown Houston Permit Holders

BEB MAIL POOCHIf you currently hold a mailing permit number that is issued from the Downtown Houston Post Office, you will need to make some changes.

As closure of the Downtown Post Office completes, all permit numbers issued from there must be re-issued from the North Houston office.

To make the transition, you are required to re-apply (at no additional charge) for a North Houston permit number. However, North Houston may not be able to assign the same number you were given from the Downtown Post Office. If the number issued from Downtown is not currently taken by another mailer in North Houston, you will be assigned the same number. Otherwise, you will be issued a new number.

This process must be completed no later than June 15, 2015
Inventory of items already printed with the Houston permit information will be accepted throughout the balance of this year. If you currently use a permit with the verbiage “Houston”; when creating new inventory, you will need to use the verbiage, “N. Houston” going forward. A sample for your review is below.
EXAMPLE INIDICA

You can see detailed standards for mailing permit verbiage by clicking here or you can contact the North Houston Post Office at 713-226-3032.

If you need additional information or assistance, don’t hesitate to contact us at 713-528-5568.

New Congress Against 5-Day Delivery

PostalReporter.com published a great blog with details about H.Res. 12, calling for the USPS to do what is needed to continue delivering mail 6-days a week.  Check out the blog and more details on the Resolution by clicking here.