USPS Projects Smaller Rate Increase in 2010

Next year's price adjustment will likely be less than one percent, according to PRC chair.

By Chandra Johnson-Greene
Wednesday, May 13, 2009

Despite a recent rate increase and the news that the USPS is in dire straights financially, there may be some better news ahead for mailers.

When Dan Blair, chair of the Postal Regulatory Commission, addressed the House Oversight and Government Reform Federal Workforce, Postal Service and the District of Columbia Subcommittee last month, he noted that based on current inflation trends, the price adjustment for 2010 would likely be less than one percent.

Blair noted that the Postal Accountability and Enhancement Act of 2006 allows the USPS to file an “exigent” rate case to address revenue shortfalls, thus allowing the USPS to raise its rates for market dominant products higher than the Consumer Price Index-based cap.

However, Blair said, “the Postmaster General has indicated his desire to avoid filing such a case for fear that raising rates above inflation would likely drive more mailers from the system and further diminish future postal volumes and revenues.”

Blair also discussed other strategies for improving the USPS’ financial outlook, including “examining ways to grow volume and position the Postal Service to take advantage of market opportunities once the economy begins to recover.” The 2006 Act, he said, allows the USPS “additional flexibilities in seeking negotiated service agreements as well as new and experimental products.”

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