Postal rates are set to rise by an average of almost 2 percent next month as part of annual increases by the United States Postal Service (USPS). Rates might jump even more – maybe 7.6% — as early as next summer after a once-in-a-decade review of postal operations.
The Alliance of Nonprofit Mailers (ANM) estimates that the Postal Rate Commission (PRC) could raise postal rates beyond inflation by as much as 5.6 percent to 7.6 percent. Executive Director Stephen Kearney said USPS will do its own calculations that might be a little different but not by much.
Total authority above the Consumer Price Index (CPI) would be 5.6 percent for compensatory products, which includes First-Class Mail and Marketing Mail Letters, and 7.6 percent for non-compensatory, such as periodicals and Marketing Mail Flats.
USPS could file notice with the PRC by the end of December for each of those rate authorities and how much of the authority would be used. Kearney said the PRC could approve that by the end of March, which then would require 90 days for implementation, bringing it to summer. “Of course, things could happen slower,” Kearney said, but the beginning of July would be the earliest it could happen.
USPS must submit its calculations by Dec. 31 and the PRC estimates that it would approve them in March, Kearney said. The new rule also extends the required notice by USPS of a planned rate increase from 45 days to 90 days.
Two classes as a whole are non-compensatory, meaning they do not cover their costs: periodicals and package services. Marketing mail is mostly letters that cover their costs but within that there are three categories that do not: carrier routes, flats and parcels, Kearney said.
USPS also has the option when doing density and non-compensatory for each class of mail to bank some of the rate authority, and not include it in any 2021 increase but a future year. “Our assumption is, they’re mostly likely to use it all because they’ve used every bit of rate authority they have,” Kearney said.
The alliance estimates the above-inflation rate authority breaks down as:
4.6 percent for density;
1 percent for retirement costs; and,
2 percent for non-compensatory mail.