Key Notes – Volume 04 Number 38

Changing the USPS Ratemaking Process – Based upon articles from a recent issue of Mailers Hub, written by Leo Raymond, there is no “right answer” the PRC could formulate on their review of the ratemaking process and no matter what it decides, there will be those who approve of the commission’s decision and those who won’t.  Mr. Raymond states the current yardstick, the Consumer Price Index, isn’t representative of costs experienced by the Postal Service, and should be supplanted by a more relevant index or, alternatively, the monthly CPI should be adjusted to better reflect the Postal Service’s (rather than consumers’) cost circumstances.  Expecting the USPS to have revenue demands that are in line with what should be its costs is fine, so long as the definition of “what should be its costs” is fairly established.  Particularly, there’s the question of what to do about what the Postal Service calls its “uncontrollable expenses.”  Evaluating and, if necessary, tweaking the current ratemaking process to ensure it produces adequate revenues for controllable costs (what “should be” USPS costs) is one thing, but deciding how the ratemaking system should also allow revenues to cover uncontrollable costs is something else.  Source:  Presort

FedEx to Raise Rates in 2018 – FedEx announced it would increase its Express and Ground Rates by 4.9% on January 1.  Their freight rates will go up the same amount on the same date. One Rate prices will move up by an average of 3.5% on that date as well.  The rate increases should help FedEx continue what has been good revenue and earnings momentum. Revenue last year was $60 billion, up from $50 billion a year earlier.  Source:  24/7 Wall St

Alliance Leads Opposition to Preferred Rate Change – At stake: Nonprofit Marketing Mail rate increases of 3.3% to 6.9% on top of other increases.  The Alliance of Nonprofit Mailers (ANM) and its membership are strongly opposing the Postal Service attempt to change analytical principles relating to periodic reports and compliance determinations (Docket No. RM2017-12).  According to the ANM, this proposal would force an average price increase of 6.94 percent for ECR nonprofit Marketing Mail and 3.33 percent for regular nonprofit Marketing Mail—in addition to any CPI-based price increases.  The industry is fighting back with dozens of letters from nonprofits in opposition to the USPS reversal of current policy.  The message rings loud and clear that this completely unnecessary change would knock substantial nonprofit fundraising out of the mail and endanger countless charitable missions that our nations needs now more than ever.  Source:  Source:  Alliance of Nonprofit Mailers

Postal Service Underestimates Delayed Mail by 2 Billion Pieces – Several senators are calling for major changes at the Postal Service after a report found the agency underestimated its delayed mail by 2 billion pieces.  One lawmaker went as far as to say anyone involved in the cover-up should be fired.  The delays cost $85 million, the USPS inspector general found in an August report.  The auditors tested the accuracy of the Postal Service’s reported delays at several facilities across the county and extrapolated the findings out to come up with the 2 billion figure over the course of one year.  The agency considers mail delayed when it is “not processed in time to meet the established delivery day.”  Source:  Government Executive

Still Standing – Hurricane Irma was no match for the nation’s smallest Post Office.  The Ochopee, FL, office survived the storm despite being in one of the hardest hit areas. At about 62 square feet, the office has been housed in a former toolshed since 1953.  Source:  USPS Link

Lack of USPS Promotions for 2018 – Every year, mailers have the ability to take advantage of various USPS promotions, which provide mailers with discounts and incentives to make use of new and innovative business technologies.  What’s being offered in 2018? Nothing.  2018 doesn’t bring the same opportunity for mailers to participate in promotions.  The USPS cannot launch any new 2018 promotions without the guidance and approval of a Board of Governors (BOG).  Appointing Board members is the responsibility of the current Administration and Congress, not the USPS.  This lack of a BOG not only affects the USPS but also many First Class and Marketing Mail mailers due to most 2018 budgets having been determined prior to the announcement that there would be no 2018 promotions.  Source:  GrayHair