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The U.S. Postal Service’s Board of Governor’s announced that postal rate increases will follow the Postal Reform bill passed 11 months ago, which means that future prices will be tied to the rate of inflation.
The Board of Governors could have chosen to file a final rate case under the old regulations that have been in place since 1971; instead they chose to proceed with the new pricing regulations, writes Multichannel Merchant.
The USPS will have new flexibility in the pricing of shipping services, including bulk parcels and expedited package services such as Priority Mail and Express Mail. It intends to use the flexibility to become more competitive by offering volume discounts and contract pricing.
In the latest postal rate case, catalogers faced increases as high as 40 percent. Gene Del Polito, president of the Association for Postal Commerce, says that the Postal Service was aware of the hardship this caused for mailers. “There is absolutely no doubt in my mind that the Postal Service fully appreciates that catalogers got whacked in the last rate case and have no intention of repeating that,” he is quoted as saying.
Others are not so sure. Hamilton Davison, executive director of the American Catalog Mailers Association says that it is a misconception that having the CPI cap tied to future price increases will restrict exorbitant hikes in mailing rates. “The CPI cap is at the class level,” he says. “The entire class has to be averaged out to at or below CPI level.
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