USPS halts plan to consolidate and close processing facilities
The Postal Service has suspended its plans to consolidate or close processing facilities in 2015.
According to documents on the USPS website, the closures and consolidations dates of all plants were changed from 2015 to “to be determined,” with the exception of three plants in Asheville, N.C., Houston, Texas and Queens, N.Y.
The USPS planned to close up to 82 mail processing facilities this year and expected to save about $750 million a year by closing those facilities – money that it desperately needs after the agency recorded losses in 21 of the last 23 quarters.
The price of a Forever stamp and other mail will rise by 3 cents on January 26, 2014. This represents the largest rate hike in 11 years. The increase will be in effect for two years, giving the USPS a temporary shot of extra revenue. “Allowing the rates to remain in effect indefinitely would result in over recovery of the financial impact of the Great Recession on the Postal Service,” wrote the commission.
The PRC (Postal Rate Commission) approved the exigent increase by a 2 to 1 vote, resulting in a 6% overall jump in postal rates. This is the first extra revenue for the USPS since the 2006 law limited rate increases to the rate of inflation.
In addition to First-Class mail, the higher rates will apply to magazines, newspapers, advertising mail and bills – which together account for most of the 158 billion pieces of mail delivered every year.
A review of the Exigent Rate Case from our partner, Thomas Glassman of Wilen Direct.
Mr. Tom Glassman of Wilen Direct
In general, the Postal Rate Commission granted the USPS request for additional revenue as a result of recession related losses. Even though the mailing industry argued that the losses were from diversion to other marketing methods. As a result, the rates contained in its exigent price filing would be allowed to take effect on January 26th. However, the PRC did not agree that the rate increase should be permanent and so directed that the rates should be implemented as a “surcharge”. The USPS was further directed to submit a plan for the eventual removal of that surcharge. I believe that you will see them in place for a long time.