Much has happened since our last postal update, particularly as it relates to Postal Reform and the possibility of a second postal rate increase; both of which are now entering the forefront in Washington D.C.
In December, the Postal Regulatory Commission (PRC) proposed Order No. 5763, which introduced new ratemaking regulations that allows the United States Postal Service (USPS) to increase postal rates above the standard annual changes that are based on the Consumer Price Index (CPI).
The belief is that with this new power, the USPS will exercise its right to increase postage rates that would take effect as early as later this summer. In a possible worst-case scenario due to the continued increases in the CPI, we understand the USPS could seek to increase rates anywhere between 6.8% for and up to 8.8%.
What also happened most recently was the unanimous approval of the 2021 Postal Reform Act by the House Oversight and Reform Committee, and the subsequent introduction of a similar bill in both the House and Senate. This bill would repeal several key items that were a part of the 2006 Postal Accountability and Enhancement Act, including the requirement of the USPS to pre-fund health and retirement benefits for all its employees.
Those in the industry including those of us here at Arandell believe this bill, which has bipartisan support, has a very good chance of making it to the President’s desk.
It contains essential financial reforms to place the Postal Service on a more sustainable path, as well as bipartisan reforms for transparency and accountability, and allows for continued growth of the Postal Service. However, it does nothing with respect to control the rates or service standard changes that the PRC, Board of Governors and Postmaster General DeJoy are planning to implement that are creating other concerns for the mail user industry.
What Happens Next?
The Postal Reform Act will now go to a vote by the House of Representatives and the Senate. If passed by each, it is then expected to be signed into law by the President.
In the meantime, we encourage all those in the print and mail industry to get involved with organizations like the American Catalog Mailers Association (ACMA), The Alliance of Nonprofit Mailers and The Association for Postal Commerce (PostCom), to help combat these legislative issues. These associations serve as great liaisons between businesses and political leaders and ultimately do affect real change.
In addition, we encourage you to share your voice and company’s viewpoint with members of Congress. You can express your outrage over the postal rate increase and encourage legislators to support the Postal Reform Act by clicking here: https://p2a.co/bzX4wuZ
Here at Arandell, we will continue to keep our customers, vendors, team members, partners and all other key stakeholders informed of these ongoing and fluid issues as they progress with our postal updates.