On the same day President Biden officially signed the Postal Reform Act of 2022 into law after more than a decade of work by organizations such as the ACMA and Coalition for a 21st Century Postal Service, the USPS filed for its first postage rate increase of 2022 with the Postal Regulatory Commission (PRC). These rates are expected to take effect in July.
As mentioned in our Arandell Postal Update from January, a rate increase was expected to be proposed sometime in April by the USPS, which made full use of its new authority to increase rates beyond the consumer price index (CPI). The price increases for Marketing Mail are not favorable (as was also expected), and well exceed the rate of inflation for the most common processing/presort tiers.
As laid out by the ACMA, the most notable price changes include a 6.5% increase in Marketing Mail and an 8.5% increase in package services. Marketing Mail flats all received the PRC-mandated 2% bump, bringing the average in this category to an 8.5% overall increase. First Class stamps will increase from 58 cents to 60 cents.
You can see the full list of relevant rate increases, with the most common tiers highlighted here:
Worth noting is the USPS’s documented indication that they would be judicious in their pricing authority as granted by the PRC. However, the USPS ultimately took the maximum overall increases allowed. In addition, they presented themselves to our industry as being generous by announcing two new presort/palletization tiers. Ultimately though, these palletization tiers require massive scale to achieve, which will prove difficult even for the largest organizations in our industry.
As always, we will continue to work with our partners in Washington D.C. including the ACMA to find a viable solution for the USPS that does not require rates to increase twice a year. As also laid out in our earlier Postal Update from January, we would expect the second rate increase of this year to be proposed by the USPS in October and take effect in January of 2023.
For more information not mentioned in this Arandell Postal Update, please see the official filing from the USPS to the PRC here.