• by Erik Sass , July 29, 2011

Consumer magazine publishers defeated last year's attempt by the U.S. Postal Service to raise rates, but it turns out this was just one battle in a longer war. The USPS is mounting another push to raise postal rates, which publishers are criticizing (once again) as unnecessary, as well as harmful to their own financial well-being.

The USPS can't raise rates unilaterally, but is instead required by law to seek the approval of the independent Postal Regulatory Commission for any proposed increase in postal rates. (The PRC, in turn, answers to Congress.)

Earlier this week, the USPS petitioned the PRC to permit a rate increase of over 4% on most mail, including periodicals (previously second-class mail) going into effect January 2012.

The proposed rate increase is necessary, the USPS argues, to offset revenue losses resulting from the economic downturn, which saw the total volume of mail delivered by the USPS decline 20% in 2008-2010.

The 4%+ "exigent" rate increase is calculated to raise $2.3 billion, partially offsetting a claimed loss of at least $2.34 billion incurred in 2008-2010, which the USPS argues might actually be as high as $6.6 billion.

The USPS says it has already lost $5.6 billion in fiscal 2011, and is on track to lose about $8 billion by the end of the fiscal year.

However, the new postal rate increase is being opposed by a group of trade and nonprofit organizations, which rely heavily on the postal service, including the Alliance of Nonprofit Mailers, the Association for Postal Commerce (PostCom), the Direct Marketing Association and the Magazine Publishers of America.

Opponents of the proposed rate hike are arguing that the recession is not wholly -- or even mostly -- to blame for the continuing USPS losses, which they say are also the result of inefficiency ("longstanding structural issues"). In the past, critics have also said the USPS fails to compete effectively with private-sector rivals like UPS and FedEx.

The dispute carries a certain feeling of déjà vu, as all the same arguments were trotted out (on both sides) after the previous request by the USPS to raise rates in July 2010.