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USPS Targets 2011 Rate Increases

August 2010

WASHINGTON, DC—The U.S. Postal Service (USPS) is proposing 5.6 percent rate increases, on average, in order to stave off a projected $7 billion loss for 2011, though the increase would only reduce the loss by $2.5 billion at a time when mail volume continues to decline sharply. Mailers, meanwhile, quickly mobilized their collective outrage in an effort to stymie what they consider an unlawful increase.

The proposed increases would bump the cost of mailing periodicals by 8 percent and catalogs by 5.1 percent, while small parcels would balloon by 23.3 percent.

The USPS is hoping to leverage an exigency clause in the 2006 law that would permit an increase in excess of the inflation rate.

"Rather than gouging its customers with 10 times the rate permissible by law, USPS should be eliminating its costs; inflation in postal costs was 6+ percent in 2009," says Jerry Cerasale, of the Affordable Mail Alliance.

The proposed increases, if passed, would take effect in January of 2011. The Postal Regulatory Commission (PRC) has 90 days to review the rate increase request.

The Affordable Mail Alliance quickly accumulated a following of more than 200 printers, newspapers, associations and suppliers, including RR Donnelley, Quad/Graphics, Trend Offset Printing, IWCO Direct, Sappi, NewPage and Printing Industries of America (PIA).

According to Lisbeth Lyons, PIA Government Affairs, the chances of these rates being approved hinge on the PRC accepting the USPS' argument that an exigent condition exists.

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