USPS Proposes Higher Rates for 2018: Drop-Shipped Nonprofit Marketing Mail Letters Take Another Hit Above Inflation
Exclusive ANM Rate Comparison Charts available through the links below
Friday, October 6, 2017
The US Postal Service issued the following announcement today. The filing at the Postal Regulatory Commission can be found HERE.
WASHINGTON — The United States Postal Service filed notice with the Postal Regulatory Commission (PRC) today of price changes to take effect Jan. 21, 2018. The new prices, if approved, include a one cent increase in the price of a First-Class Mail Forever stamp from 49 cents to 50 cents.
Postcard stamps and metered letters would also have a one cent increase. Today’s filing does not include any price change for single-piece letters being mailed to international destinations or for additional ounces for letters.
The proposed prices would raise Mailing Services product prices approximately 1.9 percent, and most Shipping Services products will average a 3.9 percent price increase. While Mailing Services price increases are limited based on the Consumer Price Index (CPI), Shipping Services prices are adjusted strategically, according to market conditions and the need to maintain affordable services for customers.
Here is more detail on nonprofit rates provided by USPS. You can see that nonprofit drop-shipped marketing mail letters will take another hit. This is because USPS recalculated the pass-through of their cost-savings from work-sharing, and found it to be above 100 percent. They are bringing it down to 100 percent in stages, starting with 2017 rates. Unfortunately, this goes against all the work that mailers and their service providers have done to assist the USPS by sorting and dropping mail closer to its destination.
The January 2018 Nonprofit Marketing Mail Rate Comparison Charts can be found here, prepared especially for you by the Alliance of Nonprofit Mailers.
Office of Inspector General Puts USPS Balance Sheet into Perspective
In other news, the independent USPS Office of Inspector General reported that USPS $340 billion prefunding of its retirement obligations needs only a normal investment policy to reach fully-funded status. Read the report here.
The OIG analysis is consistent with the data supplied by the Alliance in our filing for the 10-year rate review. We showed that USPS retiree pension and health care pre-funding exceeds that of all sectors–federal and state governments, military, and Fortune-500 private sector corporations. The normal investment solution recommended by the Alliance and many others has now been validated by the independent analysis of the OIG. Raising investment rates to normal levels would “clean up the USPS balance sheet” without endangering the very existence of the Postal Service by allowing postage rate increases above inflation. But even without the better investment rates, USPS pre-funding is better than any other sector and covers obligations for decades to come. There is plenty of time to perfect the balance sheet.