The Administration released the long-awaited postal task force
report in December.

The Alliance Board met and discussed the report and actions of the task force in detail.  The general reaction was negative.

A primary concern is that the proposed business model is to divide
mail into “essential” and “non-essential” categories.  The task force proposes that the essential types of mail would continue to be protected by price caps, while the non-essential group would be priced at a market rate.

The task force believes the previous business model is outdated and enables urban areas to subsidize rural regions. They want the new model to create a subsidy of essential mail by non-essential mail.

Under the current model, everyone pays uniform rates. The proposal would make “non-essential” mailers pay much higher rates based on someone’s judgment of what is “essential.” The Alliance Board has stated that the “proposed system is not workable, legally, politically or practically.”

Raising prices above inflation without addressing the cost issues will drive away direct mail and package volume which is currently supporting a profitable USPS. As we all know, they have generated operating profits in each of the last six fiscal years and only the miscalculated retiree health benefits charges have dragged the USPS financials into a loss. We will keep you abreast of this as it moves along.