Business

Mailers, USPS Deliver Exigent Rate Increase Appeals

The just-implemented postage rate increase isn't going through without a fight. A sure sign: The Postal Regulatory Commission’s decision is being appealed by both those for and against the hike.

The just-implemented postage rate increase isn’t going through without a fight. A sure sign: The Postal Regulatory Commission’s decision is being appealed by both those for and against the hike.

For the general public, it’s an increase of a few cents here and there. But for the U.S. Postal Service, and the mailers that rely on it, it’s something worth going to court over.

This week, the U.S. Postal Service officially increased the price of first-class postage from 46 cents to 49 cents through an off-cycle “exigent” rate increase meant to be used in emergency circumstances. The increase for bulk mailers, including publishers and direct marketing firms, is 4.3 percent, combined with a previously approved 1.7 percent increase based on inflation. But depending on the side of the debate you’re on, the Postal Regulatory Commission (PRC) decision to allow the increase either went too far (by raising prices for bulk mailers already struggling to rein in costs) or not far enough (by only allowing the increase on a temporary basis for two years).

Increased rates will only result in more lost volume for the Postal Service.

And thanks to two separate appeals against the commission’s decision, it’s unlikely that the conflict over the rate increases is going to end anytime soon. A quick breakdown:

Associations sue to overturn the rate increase: As noted by AdWeek, a number of industry associations directly affected by the rate increase—including MPA: The Association of Magazine Media, the Greeting Card Association, and the Direct Marketing Association—joined together last week to ask the U.S. Court of Appeals in Washington, DC, to overturn the PRC ruling, which it says was reached using faulty metrics. The associations contend that the Postal Service’s ongoing revenue declines were brought on by an increase in internet usage and are not the lingering result of the recession. “The evidence used to secure this increase, more than three times the rate of inflation, is fundamentally flawed and thus inherently inaccurate,” MPA President and CEO Mary Berner said in a statement on the appeal. “Increased rates will only result in more lost volume for the Postal Service. Businesses will suffer, and good people will lose their jobs. We hope the legal system will see through the Postal Service’s fuzzy math. This counterproductive decision should be returned to sender.”

Postal groups want to make it permanent: The USPS, meanwhile, filed an appeal of its own, according to The Washington Post, arguing the increase should be made permanent. The regulators denied the permanent increase, saying that it would effectively be asking customers to offset structural changes caused by the decline in mail volume due to outside factors such as email and private-sector delivery services.

For its part, the PRC wasn’t surprised by the appeals, with spokesperson Ann Fisher telling the Post, “Given the nature of the case, an appeal, or two, was expected.”

(photo by Justin Sullivan/Getty Images)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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