On September 26th, 2013, the USPS® filed two price and rate change proposals: CPI and Exigent. The CPI price proposal is what we normally expect see every year. The Exigent Proposal is the one that is causing the mailing industry to take a deep breath. If approved, the CPI price change would bring an across the board increase of 1.696% to the five market dominate products (First-Class Mail®, Standard Mail®, Package Services, Periodicals and Special (Extra) Services). If we add on the Exigent Proposal of 4.3%, Mailing Services could see a 6% overall average increase. Ouch!
Hold on though….
Deputy Postmaster Ron Stroham, in a recent exclusive interview with Direct Marketing News expressed a firm belief that postal reform can be enacted by Congress in the coming months and that a 4.3% exigent rate increase can be averted. According to Mr. Stroham, “extraordinary forces are aligning in the turbulent 113th Congress that favors quick passage of postal reform.” – See more at: http://blogs.pb.com/usps-news/2013/11/04/usps-exigent-price-proposal-done-deal/#sthash.EWodfHcL.dpuf
Under current postal law, the CPI price adjustment and the Exigent price adjustment have different procedural timelines. The Postal Regulatory Commission (PRC) has committed to completing their CPI proposal review between November 10th through November 26th. This is a bit late but the schedule incorporates a delay due to the recent Government shutdown. Postal law allows 90 days for the PRC to review an exigent filing. This means that the PRC decision on the exigency is not expected to occur until sometime between December 25th to mid to late January. I think it’s fair to say that whether CPI or CPI+Exigent is approved, most products will see price increases effective January 26th, 2014. To share with you the best and worst case, and to enable you forecast 2014 postage and mailing expenditures, click on the slide image above to launch a presentation delivered by Ann Daley, Vice President, Government and Regulatory Affairs and Alison Hall, Director of Client Services. Together, Ann and Alison will give you a comprehensive overview of 2014 Mailing Services price and regulatory changes.
Below is a sampling of what you will see in the presentation:
FIRST-CLASS MAIL® – RETAIL LETTERS, FLATS and PARCELS – Proposed
Summary: The proposed price for a Retail First Class one-ounce machinable stamped letter is 47 cents based on the CPI proposal, 49 cents based on the Exigent proposal. Each additional ounce is 21 cents, an increase of one-cent. First-Class retail parcels one, two, and three ounces remain a single priced cell, allowing more mailable matter to be inserted, up to three ounces without additional cost. Postcards are proposed to increased from $0.33 to $0.34 cents based on the exigency rate. The CPI proposal would keep retail postcards at $0.33 cents.
Under the CPI proposal, the additional once for letters and flats remains at $0.20 cents. Under the Exigent proposal, the additional ounce changes to $0.21 cents. For parcels, the Exigent proposal increases the additional ounce price (after the first three ounces) from $0.17 cents to $0.18 cents. Of the three First-Class Mail retail categories, parcels is definitely seeing the largest proposed increase at roughly 12% with the Exigent. But First-Class Retail parcels is still a great bargain when compared to private carriers.
NEW: FIRST-CLASS™ METERED MAIL CATEGORY – Proposed
Summary: This category includes single-piece letters with postage affixed by postage meter, PC postage, permit imprint or pre-canceled stamps. This category allows mailers to obtain a one-cent discount over stamped retail postage. The USPS® is hoping that this new price category will encourage the adoption of metered mail by small businesses. With this one-cent reduction, small businesses should waste no time is acquiring a meter. Pitney Bowes has options to fit any size business . Why pay more for postage when you don’t have to? By the way, permit and pre-canceled stamped pieces will still be required to meet the 200 piece minimum. Pre-canceled stamped pieces will be required to be reported on a PS Form 3600 postage statement and deposited at a BMEU or DMU.
Want more? Click on the presentation slide image above. Do you want to view the presentation without audio? View it on SlideShare: http://www.slideshare.net/pitneybowes/a-usps-price-change-fullservice-imb-2014-here-we-come