The U.S. Postal Service (USPS) on October 9 filed notice for new postal rates for market-dominant products, which includes Marketing Mail and Periodicals. If approved by the Postal Regulatory Commission (PRC) in the coming weeks, the new rates will take effect on January 26, 2020.
The Postal Service is required by law to maintain rates within the Consumer Price Index. For this reason, postal rates increased by 1.9 percent overall; however, there are variations within rate categories. Rates for Saturation/High Density Plus/High Density flats, which are the typical rate categories for newspapers’ Total Market Coverage products (ad inserts to non-subscribers), increased by less than 1.9 percent, and in some cases not at all. For example, a six-ounce saturation flat entered at a local post office will receive a 1.46 percent rate increase.
Publishers that send Periodicals Within County will not see much of a change. The Postal Service increased rates the most for Periodicals that are sent Outside County in sacks, trays and bundles. The Postal Service wants publishers to prepare more Carrier Route pieces.
Here is a chart of the rates of interest to newspaper publishers.
This could be one of the last years in which the Postal Service is required to maintain price increases within the Consumer Price Index. The Postal Accountability and Enhancement Act of 2006 requires the PRC to review the current rate-making structure to determine if it is fulfilling the objectives of the law. One of these objectives is to ensure that the Postal Service has “adequate revenues” to fulfill its universal service obligation. The PRC is currently reviewing the current rate structure and could propose an alternative rate system by the end of the year. There is much speculation in the mailing community that the PRC will propose a rate system that allows the Postal Service to increase rates beyond the CPI to cover its financial obligations and force underwater products to cover their costs. This is likely to be a very contentious issue in the months and years ahead.