APWU Weighs In on PRC Review, Calling for an End to CPI Price Cap

03/25/2017The American Postal Workers Union (APWU) submitted comments before the March 20 deadline to the Postal Regulatory Commission (PRC) for their ongoing “10 Year Rate System Review,” required by Congress in the 2006 Postal Accountability and Enhancement Act (PAEA). The Commission is reviewing the effects of the current rate system, capped by the Consumer Price Index (CPI), to see how it impacts the Postal Service’s ability to meet the objectives stated in the PAEA. The PRC requested comments from stakeholders, including the public, about the Postal Service’s rate setting system. Continue reading

NALC submits comments in PRC’s rate-setting review

From the National Association of Letter Carriers:

The Postal Regulatory Commission’s (PRC) required 10-year review of the way the U.S. Postal Service sets its prices for postage and postal products is underway, with NALC making an official submission to the agency before the public comment window closed on March 20.

Chief among NALC’s recommendations is that the PRC should eliminate the price cap on so-called “market dominant” products such as First Class Mail.  The cap has failed to provide the means to achieve the most important objective of the 2006 Postal Accountability and Financial Act (PAEA): financial stability for USPS. Continue reading

USPS seeks an end to postage price cap

From USPS News Link:

USPS is offering comments on the 10-year pricing system review being conducted by the Postal Regulatory Commission (PRC).

Under a 2006 postal law, the PRC must review the system used for regulating rates and classes for market-dominant products, including First-Class Mail, USPS Marketing Mail and other mail categories. Continue reading

PRC Commences First Broad Review of Postal Ratemaking System

Washington, DC – Today, the Postal Regulatory Commission (Commission) begins its review of the system for regulating rates and classes for Market Dominant products that was first established in 2006. The law requires that the Commission begin its review of the current rate system ten years after the date of enactment of the Postal Accountability and Enhancement Act, to determine whether it’s achieving the objectives established by Congress. If the Commission finds that the objectives, taking into account the factors, are not being met, it has the authority to either propose rules that modify the system or adopt an alternative system to achieve the objectives. Order No. 3673 outlines the parameters and timing by which the Commission will complete its review. Continue reading

PRC recommends the President and Congress address the financial condition of the USPS

Washington, DC – The Postal Regulatory Commission (Commission) today made its recommendations to the President and Congress to address the volatile financial condition of the U.S. Postal Service. The Commission is required every five years under Section 701 of the Postal Accountability and Enhancement Act of 2006 (PAEA) to issue a report that evaluates how well the PAEA is operating and makes recommendations for legislation or other measures necessary to improve the effectiveness and efficiency of the Nation’s postal laws. Continue reading

Postal Regulator Seeks Public Comment on Report to the President and Congress

PRC must make recommendations for any legislation or other measures necessary to improve the effectiveness or efficiency of the postal laws of the United States

Washington, DC – Today the Postal Regulatory Commission (Commission) called for public input and comment as it prepares a statutorily mandated report to the President and the Congress on the operation of the Nation’s postal laws. The Commission established Docket No. PI2016-3 for this purpose.

prcUnder the Postal Accountability and Enhancement Act of 2006 (PAEA), the Commission is required to at least every 5 years submit a report to the President and Congress concerning the operation of the amendments made by this Act, and recommendations for any legislation or other measures necessary to improve the effectiveness or efficiency of the postal laws of the United States.

The Commission identified 13 areas of interest on which the public may focus its comments in addition to any other issues of interest related to the operation of the amendments of the PAEA.

  1. Postal Service Financial Situation
  2. Market Dominant Rate System
  3. Competitive Rate System
  4. Negotiated Service Agreements
  5. Post Office Closing/Consolidation Procedures
  6. Service Standards
  7. Nonpostal Services
  8. The Postal Service Fund and the Postal Service Competitive Products Fund
  9. Advisory Opinion Process
  10. Market Tests
  11. Universal Service Obligation and the Postal Monopoly
  12. Requirement of a Public Representative
  13. Requirement of Commission Inspector General

All interested parties must submit comments to the Commission under Docket No. PI2016-3 no later than June 14, 2016.

Source: Postal Regulatory Commission

PMG: Loss of exigent surcharge will cost USPS $2 billion a year

From the US Postal Service:

WASHINGTON — Absent Congressional or court action to extend or make permanent an existing exigent surcharge for mailing products and services – including the Forever stamp — the Postal Service will be required to reduce certain prices on Sunday, April 10, 2016. This mandatory action will worsen the Postal Service’s financial condition by reducing revenue and increasing its net losses by approximately $2 billion per year.

“The exigent surcharge granted to the Postal Service last year only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone,” said Postmaster General and CEO Megan J. Brennan. “Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service’s precarious financial condition.”

prcAn order from the Postal Regulatory Commission (PRC) requires the 4.3 percent exigent surcharge to be reversed after the Postal Service has collected surcharges totaling $4.6 billion. As outlined in a notice filed with the PRC today, that amount is expected to be reached by April 10th.

Postal Service prices for Mailing Services are capped by law at the rate of inflation as measured by the Consumer Price Index for all urban consumers (CPI-U). However, the law does allow for exigent pricing (price increases beyond the CPI-U cap) due to extraordinary or exceptional circumstances. That was the case when the Postal Service sought and ultimately received approval for the current exigent pricing, citing the severe effects of the Great Recession on Postal Service mail volume.

However, the PRC did not accept the views of the Postal Service concerning the extent of the harm resulting from the Great Recession, and the PRC strictly limited the period of time that the Postal Service could continue to collect the exigent surcharge. While the Postal Service has experienced rapid growth in package volume over the past few years, it is not nearly enough to offset the decline in revenues from Market-Dominant products, especially First-Class Mail.

Brennan added that the Postal Service’s current pricing system, where products that generate roughly 76 percent of its revenues fall under the statutory price cap, is fundamentally unsuited to the Postal Service’s current business environment in which First-Class Mail volume continues to decline and the network costs required to provide universal service continue to rise.

According to Brennan, “our current pricing regime is unworkable and should be replaced with a system that provides greater pricing flexibility and better reflects the economic challenges facing the Postal Service.”

The surcharge removal means these First-Class Mail prices will be adjusted to the following:

Current Mandated Reduction
• Letters (1 oz.) 49 cents 47 cents
• Letters additional ounces 22 cents 21 cents
• Letters to all international destinations $1.20 $1.15
• Postcards 35 cents 34 cents

Commercial prices will also decrease. A complete listing of the new prices, effective April 10, is available at www.usps.com.

PRC Issues Annual Report to the President and Congress

prcWashington, DC – The Postal Regulatory Commission released its Fiscal Year 2015Annual Report to the President and Congress that highlights its various activities performed throughout the year. By law, the Commission is required to submit an annual report to the President and the Congress concerning the operations of the Commission, including the extent to which regulations are achieving the rate setting objectives of the Postal Accountability and Enhancement Act of 2006. The report also must include an estimate of the costs incurred by the Postal Service to provide certain services.

Robert G. Taub, acting chairman of the Commission, said, “The Commission looks forward to building on its Fiscal Year 2015 accomplishments and continuing to fulfill its mission in the most effective and efficient manner possible.”

The Annual Report is available on the Reports/Data Service Performance page under PRC Reports on the Commission’s website, www.prc.gov.