USPS rate structure includes 8.5 percent hike

The U.S. Postal Service recently announced it would hike periodicals postage rates an average of 8.5 percent on July 10, disappointing publishers who expected passage of the Postal Service Reform Act to moderate the price increases.

Postmaster General Louis DeJoy said the price increases from the USPS Board of Governors would use the full measure of price increase available from the Postal Regulatory Commission.

He said the reason for the big increases was USPS’ continued need for cash to update its vehicle fleet, prepare networks for more packages and make up for losses in earlier years. A small moderation of .3 percent that USPS recognized from the reform bill was offset by rising inflation, postal officials said.

“Our industry that worked for more than a decade to help USPS have received very bad news this week,” NNA Chair Brett Wesner, president of Wesner Publications, Cordell, Okla., said. “It is hard to find good news in a pricing release like this, but there are some small bright spots. One is that USPS is finally recognizing the value of our use of flats trays for newspaper containers by passing along a 3.7 percent increase instead of the nearly 11 percent for mailing sacks. Increases are never welcomed, but recognition that we are doing a lot to be more efficient is some small relief.”

Ironically, the price increase was announced on the day President Biden was to sign the Postal Service Reform Act of 2022, which took more than $50 billion of debt off the USPS balance sheet.

“The Board of Governors has discretion in how much increase it passes along,” Wesner said. “We recognize USPS is facing inflation problems – including fuel cost – but it also has not only the relief from PSRA but also $10 billion in CARES Act money.

“Right now USPS has a much stronger cash flow than many in the industry. The governors could have recognized this situation in such a perilous economy. Unhappily, they did not. Now we look forward to a recalibration of the plans to increase rates again in January. Hopefully, the USPS’ new plans for improving operations will begin to show up by then.”