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USPS Exigency Rate Case Rejected

The Postal Rate Commission (PRC) ruled this morning that the USPS has failed to meet its burden under the law for its controversial exigency filing. The PRC was unanimous in denying the request for an exigent rate increase. The ruling rejected the filing in its entirety. (Read the official announcement here.)

To be valid, an exigent rate adjustment must meet the following criteria:

1. Due to either extraordinary or exceptional circumstances;

2. Reasonable, equitable, and necessary under best practices of honest, efficient, and economical management; and,

3. Necessary to maintain and continue the development of postal services of the kind and quality adapted to the needs of the United States.

PRC Chair Ruth Goldway stated that all three provisions must be met.

On an afternoon conference call, members of Postcom speculated a scenario where the USPS would file a CPI-based increase in January. During this morning's announcement, Goldway stated that the allowable range for a CPI filing by the USPS in the January timeframe would be between 1.6 to 2%.

It is not known at this time what impact this announcement may have on Mail.dat 11-1 timing. Additionally, shape-based adjustments and other aspects of the rejected proposal would have to be re-filed by the USPS before they could take effect. According to the Associated Press, Postmaster John Potter stated, “We will need to take a much closer look at the ruling from the PRC in order to make an informed decision about what options we have and what may be the best course of action for our customers, our employees, our stakeholders and the American public.”

BCC President Chris Lien had this to say about the decision:

“We appreciate the perspective and sound judgment exercised by the PRC in their denial of the Postal Service’s request for a rate case based on exigency. Although the USPS is undeniably in a difficult financial position, sharp rate increases cannot be considered a cure-all for the cumulative conditions facing this proud organization.

“With this decision comes the natural question of ‘What’s Next?’ We at BCC encourage the mailing industry – who spoke so passionately against this proposed rate case for the past several months – to continue to make their voices heard. Congressional representatives must relieve the USPS of its mandated legislative burden in pivotal areas including retirement pre-funding and delivery frequency. The solution to this period of adversity must be found in innovation, and in strategic business decisions that adhere to modern competitive practices.

“BCC continues to support innovative actions by the USPS and the entire postal industry, as the necessary steps toward resolving our current situation.”