USPS Requests Additional Increase

USPS will pursue bid for above-inflation postal rate increase

Tuesday, November 8th, 2011

The US Postal Service told regulators today that it will pursue its request to make an above-inflation or “exigent” increase in postal rates.

The move came after USPS was told to declare its intention quickly by the Postal Regulatory Commission as they refused a delay in the process on the grounds that it would prolong uncertainty for mailers.

USPS wanted to delay the process of seeking an “exigent” postal rate rise – a price increase above its usual inflation-linked price cap – to allow time for Congress to sort out comprehensive postal reform legislation.

The process continues last year’s attempt to secure a 5.6% increase in prices for Postal Service products in order to avoid a financial crisis in the wake of the 2008-09 global recession.

The case has been through the US courts after the regulators rejected the request last autumn, on the grounds that it wasn’t only the recession that had caused the USPS financial problems.

Today, USPS attorneys said in the filing it will pursue its case, but in order to do so, needs to carry out extra analysis to work out what portion of its mail volume losses can be attributed to the global recession.

The Postal Service said the rates proposed in the original exigent case were now “unworkable”, since 16 months had passed since the proposals were made, but suggested that it could accept the Commission’s estimate that the recession had cost it $2.3bn in terms of the extra funds to be recovered from higher postal rates.

“If the plan outlined above is acceptable to the Commission, the Postal Service will proceed with filing its witness statements and any further legal analysis by November 21st,” said the USPS filing.

Commenting on its case, the Postal Service said continuing uncertainty that Congress will pass a rescue package meant that it had “little choice but to proceed with the case for now”.

“If legislation passes that promotes the Postal Service’s financial stability, the Postal Service will review its position any may choose to withdraw the case if warranted,” it said.