In previous columns, I discussed some of the mistakes the U.S. Postal Service made in preparing its latest rate case. But besides these errors of commission, the USPS made a few errors of omission. In other words, there were things the USPS could have done, but failed to do, to make the year 2000 rate case an opportunity for success instead of a recipe for disaster.
The most significant of these possibilities would have been to seek a reclassification of first class mail into two new subclasses – one for single-piece first class and the other for bulk-entered first class. For as long as mail classification has existed, these mail types have been consigned to a common subclass. This has greatly inhibited the postal service’s ability to bring anything even remotely approaching creativity to postal rate design.
Keeping the two together has constrained more sensible base rate designs to nothing less than whole-cent integers. Despite the general citizen’s ability to fathom the mysteries of “three stamps for a dollar,” postal rate makers persist with this whole-cent-only silliness.
Nonetheless, while there may be some rationale for constraining single-piece first class mail to whole-cent increments, there is absolutely none for bulk-entered mail. Without any artificial whole-cent constraints, it would be much easierfor the USPS and the Postal Rate Commission to devise rates that need not shift a billion dollars’ worth of costs from one mail class to another because a stamp might be raised a penny.
Even more important, however, is the freedom rate designers could enjoy if the link between single-piece and bulk first class mail were severed. Heck, the USPS might even be emboldened to propose new postal products that are more in keeping with a changing market’s needs rather than serving up the same old hash at higher and higher prices.
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