• by Ray Schultz , July 14, 2024

The U.S. Postal Service is harming both publishers and itself with its current ratemaking process, the News/Media Alliance (NMA) charges in a letter to the Postal Rate Commission. 

“While the Postal Service incurs record losses, Periodicals mailers have been forced to make difficult business decisions ranging from cutting staff to shuttering titles and closing their doors, all of which ultimately harms our society,” the letter states. 

Since 2021, the USPS has raised periodical rates “generally twice a year by a cumulative total of 47.8 percent,” the NMA writes. “During that time, the portion of those increases due to the additional rate authorities have exceeded the rate of inflation by more than 150 percent.”

The result for the USPS has been that periodicals volume “has fallen from 4.6 billion pieces in FY 2019 to 2.993 billion pieces last year, or by 35.4 percent. More than half of that reduction (18.4 percent) occurred between FY 2021 – when the current system was adopted – and FY 2023, with a 12 percent decline in volume in FY 2023 alone.”

The present ratemaking scheme was authorized by Order No. 5763. The resulting increases have adversely affected newspapers, Marketing Mail, High Density Plus and Saturation flats mail, NMA alleges. 

The USPS also adopted a 2% surcharge that the PRC said would “balance the need for mailers to pay a more reasonable rate with the need for the Postal Service to achieve cost reductions and improvements in operational efficiency.”

In reality, publishers have seen all rate increases with no cost reductions, the worst productivity since records have been kept, and little improvement in cost coverage due to these latter two trends.”

The NMA demands the following:

• Eliminating the non-compensatory surcharge or converting to a performance incentive tied to improvements in cost and service to hold the postal service accountable
•  Prohibiting multiple rate increases in one year
• Eliminating the density authority and surcharge.