Appeals Court reaches mixed decision on USPS/PRC IMb dispute

The Court of Appeals for the DC Circuit today handed down its decision in the lawsuit brought by the US Postal Service against the Postal Regulatory Commission (PRC) over the PRC’s attempt to regulate new Intelligent Mail barcode (IMb) rules. Mailers had claimed that the regulations increased their costs, and therefore were price increases that needed to be counted against the postal service’s rate cap for “Market Dominant” services. The PRC sided with the mailers, so the USPS appealed to the Court, claiming that the law clearly prohibited the PRC from “characterizing mail preparation requirements as changes in rates.”

Today’s decision rejects the postal service’s claim, finding the law “ambiguous” on that point. But while the Court found that the PRC could determine that a change in the rules amounted to a rate hike, “The standard enunciated by the Commission to determine when requirements changes are ‘changes’ in rates” seems boundless and, thus, unreasonable; and the Commission’s inconsistent application of the standard in this case proves the point.” The Court went so far as to find that “The Commission’s judgment in this case ‘lacks any coherence. We therefore owe no deference to [the Commission’s] purported expertise because we cannot discern it. We therefore remand the case to the Commission to enunciate an intelligible standard and then reconsider its decision in light of that standard.”

The entire decision is available here (.pdf file).

PRC Approves USPS Price Adjustments for Certain Market Dominant Products

prcWashington, DC – Today the Postal Regulatory Commission issued Order No. 2472 approving the Postal Service’s price adjustments for Standard Mail, Periodicals, and Package Services. The prices are scheduled to take effect May 31, 2015. In Order Nos. 2378 and 2398, the Commission remanded the price adjustments for Standard Mail, Periodicals, and Package Services to the Postal Service for non-compliance with applicable statutory and regulatory requirements.

In today’s order, the Commission approves the Postal Service’s revised price adjustments and classification changes, which now comply with applicable statutory and regulatory requirements. In addition, the Commission directs the Postal Service to propose several methodologies relating to changes approved in Order No. 2472. The Commission approves several changes to workshare discounts and the Mail Classification Schedule in Order No. 2472, some of which necessitate the development of methodologies to be used in data reporting. The Commission directs the Postal Service to file the following within 90 days:

  • The Postal Service is directed to file a proposed methodology for determining the costs avoided for the Presorted FSS workshare discounts.
  • The Postal Service is directed to file a proposed methodology for determining the costs avoided for the 5-digit pallet presort Standard Mail Carrier Route flats workshare discount.
  • The Postal Service is directed to file a proposed methodology for determining the bottom-up costs for the new Periodicals Mail Carrier Route bundle and container entry options.

The Commission’s regulations require that the Postal Service use accepted analytical principles in its data reporting to the Commission. 39 C.F.R. part 3050.

The Commission’s complete analyses of the Postal Service’s Market Dominant price adjustments for fiscal year 2015 are located at www.prc.gov in Docket No. R2015-4.

USPS to delay April 26 rate adjustments

The US Postal Service announced today that it will hold off on rate adjustments scheduled to take effect on April 26. The adjustments, which involve First Class Mail, Special Services and Competitive Products, have already been approved by the Postal Regulatory Commission. Rates affecting Standard Mail, Periodicals and Package Services, however, have not been approved, after the PRC twice rejected USPS rate requests for those classes of mail, saying they were “riddled with errors”, and failed to comply with the law.

The USPS says it doesn’t want to burden customers with multiple implementation dates for different classes, and will set a new date for implementation once it manages to sort out the faulty submissions. It did not offer an estimate of how long that might take.

PRC Again Remands Price Adjustments Back To USPS: Standard Mail, Periodicals, and Package Services Products Affected

prcWashington, DC – For the second time in this case, the Postal Regulatory Commission returned a Postal Service proposal to adjust rates for Standard Mail, Periodicals, and Package Services.

In Order No. 2378 issued on March 6, 2015, the Commission remanded the rates for these classes of mail so that the Postal Service could provide additional information and justifications, correct errors, and fulfill applicable legal requirements. The Commission held that the Postal Service needed to address several deficiencies, including unequal Standard Mail nonprofit and commercial discounts, improperly justified Standard Mail worksharing discounts with passthroughs above 100 percent, and improperly calculated billing determinant adjustments for all three classes.

In the order issued today, the Commission finds that the Postal Service has not adequately addressed the concerns described in Order No. 2378 and has failed to demonstrate that the proposed rates comply with applicable statutory and regulatory requirements. As a result, the Commission again returns the proposed rates and directs the Postal Service to provide information demonstrating that they conform to the law.

Once the Postal Service files a response to the Commission’s order, the public will have 7 days from the date of that filing to comment on the revised proposal.

The Commission’s complete analysis of the Postal Service’s revised price adjustments for Standard Mail, Periodicals, and Package Services can be found in Order No. 2398, under Docket No. R2015-4.

PRC approves USPS First Class Mail Price Adjustments

prcWashington, DC – Today the Postal Regulatory Commission issued Order No. 2365­­­­­­ on Price Adjustments for First-Class Mail finding the Postal Service pricing proposals to be consistent with the Consumer Price Index based price cap under the Postal Accountability and Enhancement Act of 2006, 39 U.S.C. 3622(d)(1)(A). The new prices will take effect April 26, 2015.

The Commission did not delay the review and approval of First-Class Mail despite incomplete information filed by the Postal Service for other classes of Market Dominant mail.

The Commission has approved the following actions that will affect domestic mail:

  • The Postal Service will maintain the price of the First-Class Mail stamp, which includes the Forever stamp, at 49 cents.
  • The single-piece additional ounce for letters will increase from 21 to 22 cents.
  • The price of Postcards will increase to 35 cents.

The following changes affect international mail:

  • Outbound Single-Piece First-Class Mail (first ounce) will increase by 5 cents to $1.20.
  • Non-machinable Outbound Single-Piece First-Class Mail will increase to $1.42.
  • Outbound Single-Piece Postcards will increase to $1.20.

All Commission documents pertaining to price changes for 2015 are located on the Commission’s website at www.prc.gov, under Docket No. R2015-4.

All of the prices above include the current exigent surcharge approved in Docket No. R2013-11.

USPS won’t raise prices in January

The Postal Service Governors have decided to maintain current product and service prices and not seek a market dominant price change at this time.

Because the Postal Service has announced price change proposals in September and October for the past three years, mailing industry representatives and others have been waiting to hear whether a price change would take effect in January 2015.

The governors decided not to seek a change for mailing and shipping products and services in January in part because of the uncertainty regarding the exigent price increase.

The Postal Service will continue to evaluate pricing strategies and will communicate about any potential price change filings in early 2015, including advance notice to customers of any price changes.

Read more: USPS News Link Story – Pricing update.

USPS to raise retail Priority Mail rates, lower commercial rates

From the US Postal Service:

WASHINGTON — The United States Postal Service today filed notice with the Postal Regulatory Commission (PRC) to change Priority Mail prices, including a reduction in prices on average for businesses and other customers who use Commercial Plus and Commercial Base online shipping services. The price change will include a modest increase for Priority Mail prices at Post Offices and other postal retail outlets. The proposed changes, which would go into effect in September 2014, are intended to offer more competitive pricing and build on Priority Mail’s popularity with customers.

“The Postal Service is a vital business partner for small and large businesses and lowering shipping prices will save them money and improve their bottom line,” said Nagisa Manabe, chief marketing/sales officer. “With our affordable shipping options, we hope to attract new business customers and become their preferred delivery service.”

Both Commercial Base and Commercial Plus prices will be reduced on average, with most of the decreases concentrated in the ground zones weighing between 7-16 pounds. Price for Commercial Base customers will be reduced on average by 0.9 percent, and prices for Commercial Plus customers will decline on average 2.3 percent.

“Unlike others in the shipping industry, the Postal Service is not implementing any new dimensional-weight charges, continuing our commitment to deliver the best value for our customers,” said Manabe.

The Postal Service will continue to offer Priority Mail customers free insurance, expected delivery day, flat-rate packaging options and Regional Rate Boxes. Priority Mail is one of the Postal Service’s most popular shipping products, helping to boost USPS package volumes and meet customers’ needs for convenience at competitive prices. Last year, 871 million pieces were shipped through Priority Mail.

“With the Postal Service, there are no shipping surcharges. We deliver on Saturdays for no extra charge, we pick up packages for free, and we deliver shipping boxes and envelopes, also for free. Just a few more ways we help businesses get the most out of their shipping*,” stated Manabe.

Commercial Base Pricing does not have any volume requirements and these reduced rates are available for customers who use Click-N-Ship, PC Postage products, permit imprints, or digital mailing systems (meters) that generate an IBI (Information Based Indicia) and submit data electronically to the USPS.**

Eligibility for Commercial Plus Pricing is based primarily on shipping volume. For Priority Mail, 50,000 pieces are required within the prior year. In lieu of past volume, customers can instead complete a customer commitment agreement.

Pricing at Post Offices and other retail outlets will have a modest increase of 1.7 percent on average.
Highlights of the new proposed retail pricing for Priority Mail products include:

  • Small box – $5.95
  • Medium box – $12.65
  • Large box – $17.90
  • Large APO/FPO box – $15.90
  • Regular envelope – $5.75
  • Legal envelope – $5.90
  • Padded envelope – $6.10

Priority Mail is the Postal Service’s flagship Shipping Services product, accounting for $6.4 billion in revenue in fiscal year 2013. It’s a convenient and fast way to send documents and packages requiring expedited transportation and handling.

The PRC will review the prices before they become effective Sept. 7, 2014, and must agree the prices are consistent with applicable law.3 The new price proposals will be available on the PRC website at www.prc.gov.

The pricing adjustments are part of a broader strategy to position the Postal Service for the future. USPS is also streamlining its mail processing operations, which will allow the organization to invest in new package sorting equipment and other upgrades, as it continues to seek legislative changes to update its business model.

* Except when Saturday is a national holiday. For details on free Package Pickup, visit usps.com/pickup; Available with the U.S. For use with Priority Mail, and Priority Mail International shipping. Boxes are delivered with our regular mail usually within 7 to 10 business days. To order, visit store.usps.com/store.
** Visit USPS.com or call your USPS sales consultant for eligibility requirements.

PRC files brief in exigency rate case appeal

The Postal Regulatory Commission has filed its brief in the appeal of its decision granting the USPS only a temporary “exigent” rate increase to make up for the impact of the “Great Recession”. The USPS had argued that it was entitled to a permanent increase, while mailers had opposed any price hike.

Here is the PRC’s summary of its argument:

prcThe Postal Regulatory Commission authorized the Postal Service to increase its prices temporarily to recover revenue losses associated with the volume declines caused by the Great Recession. The Commission’s order reflects legal and econometric analysis that preserves the balance that Congress struck in the Postal Accountability and Enhancement Act, giving effect to Congress’s decision to allow prices to increase faster than the rate of inflation only to the extent necessary to compensate for the effects of extraordinary or exceptional circumstances. Continue reading

Tech publishers group blasts USPS exigency rate increase

Trade Group will Explore Options to Appeal or Limit this Unjustified Increase in 2014.

siia_logoWashington, DC, January 09, 2014 –(PR.com)– On December 24, the Postal Regulatory Commission (PRC) voted 2-1 to approve an exigent, or “emergency,” postage rate increase of 4.3 percent, the full amount requested in September by the U.S. Postal Service (USPS). This increase is to be applied in addition to the CPI increase of 1.7 percent, totaling a 6 percent increase for periodicals. In response, SIIA President Ken Wasch issued the following statement:

“We remain very disappointed that the PRC has continued to ignore the lack of discipline, efficiency and overall fiscal responsibility of the USPS, and instead chose to place a continued and unjustified rate increase on the B2B industry. While the PRC at least had the good judgment to reject the USPS request to make this a permanent increase, we will begin 2014 assessing the opportunities to appeal or further limit the duration of this harmful increase.”

The Software & Information Industry Association (SIIA) is the leading trade associations representing technology, digital content, media and information companies, including those that publish business-to-business industry magazines and newsletters. Our membership is comprised of more than 700 members who publish more than 600 print periodical titles and mails approximately 800 million magazines and newsletters each year, representing approximately 15% of the periodicals class within the US Postal Service. In addition, SIIA members utilize first-class and standard mail extensively and collectively spend an estimated $260 million in postage each year. In November, SIIA submitted comments to the PRC outlining reasons why the exigent increase should not be approved.