PRC Decision Receives Mixed Reaction

Industry groups were thankful the Postal Rate Commission scaled back some of the U.S. Postal Service’s rate requests but were worried that others could drive could seriously drive up costs.

The PRC recommended that standard mail rates be raised an average of 9.3% and that the U.S. Postal Service adopt the new shape-based rate schedules “to better reflect costs,” said chairman Dan Blair at a news conference Monday.

“Overall, we’re pleased with the decision of the PRC,” said Bob McLean, executive director of the Mailers Council, noting the PRC did not give the USPS everything it wanted but still felt it could keep operating.

“We’re especially pleased that the PRC declined to adopted the postal service’s new view on the value of worksharing and went on at length of discuss how this is both good for the postal service and for mailers,” he said.

Just the same, these rates are likely to hurt some mailers.

“Mailers who aren’t automation-compatible are going to be up the creek without a paddle,” said Gene Del Polito, president of the Association for Postal Commerce. “Even though the PRC recommendations were less than what the postal service asked for, some mailers, especially some catalogers and nonprofits, are going to be taking it on the chin.”

“On it’s face, it appears like it’s an improvement over what the postal service proposed for nonprofit,” added Tony Conway, executive director of the Alliance of Nonprofit Mailers. “But the change to the overall rate structure for periodicals is very significant and we’re still in the process of analyzing what it all means and how it’s going to work.”

“We are pleased that the PRC did adjust the postal service’s revenue requirement and responded to some of our concerns about the particulars of the rate request,” said John A. Greco, president of the Direct Marketing Association, in a statement. “However, we had hoped that more could have been done to offset the extraordinarily high increases for non-flat machineable and parcel mailings.”

Specifically, the PRC called for a 9.5% increase in regular standard mail rates; the USPS had asked for 9.6%. While the postal service proposed an 8.9% hike in the nonprofit standard rate, the PRC’s recommendation was just 6.7%. Similarly, the USPS wanted to boost the enhanced carrier route (ECR) rate by 8.9% but the PRC answered with 6.9%. The PRC left unchanged the USPS’ proposal of an 8.8% increase in the nonprofit ECR.

Among other standard mail categories, the PRC recommended:

* Raising three-digit presort two-ounce barcoded letter per ounce rate to 23.3 cents from the current 21.4.

* Raising five-digit presort nine-ounce flat rate to 62.9 cents from the current 57 cents.

In addition, the PRC called for periodical rates to be raised an average 11.8%.

Under the PRC’s proposal, first class stamps would go up to 41 cents from the current 39 cents and postcard rates would rise to 25 cents from the present 24.

The PRC went along with the USPS’ suggestion to create a “forever stamp” without a denomination that can be used for first class letters whenever postage rates go up on grounds that it would save the USPS money.

These recommendations now move to the U.S. Postal Board of Governors, which can accept or reject some or all of them. Rates are expected to go up as early as May.