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Regulator Rejects USPS 2020 First Class Mail Rates

USPS
Regulator Rejects USPS 2020 First Class Mail Rates

A day before the USPS releases its most recent quarter’s financial results, it got some bad news. The Postal Regulatory Commission (PRC) is rejecting its proposed First Class Mail rates for 2020. It appears to be an unusual occurrence, though we’ll reserve judgement until the experts weigh in.

The Alliance of Nonprofit Mailers was quick to tweet a link with the following comment: “@PostalRegulator nixes @USPS 2020 First-Class prices as over CPI. PRC “also expects…amended rate adjustment filing will demonstrate how the revised planned First-Class Mail prices are consistent with the relevant objectives and factors.”

CPI refers to the Consumer Price Index. First Class Mail is a “dominant” mail service (as opposed to “competitive”), and the USPS is restricted from raising dominant rates above the rate of inflation based on the CPI.

When the USPS filed its 2020 rates last month, it said Mailing Services would go up an average of 1.9%. But the PRC said the USPS incorrectly calculated the percentage change in rates for First-Class Mail, stating it made “impermissible adjustments to the billing determinants related to Inbound Letter Post.”

The PRC calculated the proposed percentage change in rates to be 2.109%, which “exceeds the total price adjustment authority of 1.933 percent.”

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Since the PRC can only approve or disapprove of rates, not set them, it remanded the case back to the USPS.

The PRC advised the USPS to submit its amended proposal “expeditiously” given it wants to implement the price changes on January 26, 2020.

The filing is on the PRC.gov website (PDF format).

Update 11/14/19: More information from today’s Linn’s Stamp News.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

4 thoughts on “Regulator Rejects USPS 2020 First Class Mail Rates”

  1. What?!? Could we actually be catching some sort of break? Although, I guess it wouldn’t really be considered a break since it’s more about the USPS trying to raise FC rates beyond what is acceptable.

  2. I am happy to see that they were denied the raise. Why should they get an increase so much bigger than the one that Social Security recipients will get?

    1. They arent denied the raise, they will lower it a 1-3 cents per tier to get it to the 1.9 percent cap and on we go paying more and more 2x a year.

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