A settlement agreement in the pending rate case could be reached by January, if not sooner.
Industry negotiators and officials of the U.S. Postal Service report making “significant progress” towards an agreement, which would end the Postal Rate Commission’s proceedings in the case.
A report on that progress is scheduled to be filed Friday with the PRC which has been holding hearings on the postal service’s plan to raise rates next September by an average 8.7% to generate some $5 billion in new revenue.
If a settlement is reached, it would mark the first time in recent memory that a major rate case before the PRC was decided in this fashion and could set a precedent for the resolution of future proposals by the USPS for overall rate increases.
Industry negotiators are currently reviewing the potential effects of a postal service proposal to have the rate increase begin in the spring, possibly, as early as April 1, on catalogers, direct marketers and major mailers.
Negotiators for both sides said that the amount of federal aid the USPS receives to deal with the after effects of Sept. 11 and mail tainted with anthrax, will affect the specifics of a final settlement agreement.
So far Congress has not acted on Postmaster General John Potter’s request earlier this month for a $5 billion appropriation to make up for lost revenue due to the attacks and to cover its costs to sanitize facilities contaminated with anthrax.
The unprecedented negotiations to end a major rate case began in October at the suggestion of PRC vice chairman George Omas, who presides over the hearings on the postal service’s proposal.
A negotiated settlement to the rate case “might be the right course of action” in view of the current national crisis, according to Omas.
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