Pricing News from USPS:
Agency Remains in Dire Straits Financially, But Will Hold Off Filing For 2015 Rate Increase...At Least For Now
Dear Member:
Greetings from Washington. Amidst continued bad financial news from the Postal Service, Postmaster General Pat Donahoe announced this morning that the agency won't file for another postage rate increase until at least next Spring. Every year since 2012, the USPS has filed for rate adjustments in October with an effective date in January. The outcomes of the current lawsuit between the USPS, PRC and mailers (including ACMA) over this year's 4.3% exigent postage increase, as well as the prospects for postal reform legislation have the USPS in a holding pattern of sorts. So the PMG would not specify just when postage may change next year. As always, the USPS has to submit any rate change plan to the Postal Regulatory Commission (PRC).
Mr. Donahoe also laid out the following details during a meeting I am attending here:
Since 2006, postal volume is now down 29.5%; First Class volume alone is down 60%; overall revenue is down $14 billion a year - all of which forces "some tough decisions," the PMG said.
USPS expects to have controllable income of $300 million to $400 million – or about $1 billion less than its most recent fiscal year.
There is a pressing need for capital investment in postal vehicles, upgraded sorting equipment and technological innovation, but the current financial picture does not allow for this.
In his remarks, Mr. Donahoe said, "We need to see what the courts do, see how legislation develops, and just have more information than we have now. We realize it is too expensive to have two price increases a year."
What This All Means
The good news is, you will have more than 12 months without a postage increase, and any increase will be effective for less than 12 months. What’s more, the PMG said that if favorable postal reform legislation is enacted anytime soon, then there won’t be a need for a rate hike for the foreseeable future. The bad news is, the financial uncertainty ahead involving the USPS.
For now, please review ACMA’s member bulletin, Postal Pricing Guide for 2015, emailed to you on September 2nd at Noon E.T. Our guidance in that bulletin still looks safe, perhaps even now a little conservative. We will know more toward the end of this year and will alert you as soon as we do.
