BREAKING NEWS: AMA Condemns Rate Hike

The Affordable Mail Alliance (AMA), an unprecedented coalition of over 700 postal customers (including Brown Printing Company) called on the Postal Regulatory Commission to dismiss the Postal Service's rate hike proposal filed on July 6, 2010.

AMA’s 96-page motion argues that the rate hike violates the cost controls Congress put in law to protect consumers and that the Postal Service needs to cut costs and modernize rather than raise rates an average of ten times the rate of inflation. Senator Susan Collins (R-ME), an author of the 2006 law, has already said the proposed increases do not qualify for an exception under the standards established by Congress [Letter].

The AMA noted that businesses large and small and individuals across America have tightened their belts, cut their spending, and made painful choices due to accommodate challenging times. This is an issue about investing for possible future growth or paying higher taxes in the form of higher postal rates.

At this time of a shaky economic recovery, this is the functional equivalent of a tax increase on every American postal customer, whether individual or business.

Sources: PRC Motion, AMA Press Release & Washington Post

Legislation Introduced to Correct CSRS Retirement

The House Committee on Government Reform has introduced the “United States Postal Service’s CSRS Obligation Modification Act of 2010…to amend the provisions of title 5, United States Code, relating to the methodology for calculating the amount of any Postal surplus or supplemental liability under the Civil Service Retirement System.”

In introducing the bill, Rep. Stephen Lynch (D-MA), Chairman of the Subcommittee On Federal Workforce, Postal Service, And The District Of Columbia, said:

The United States Postal Service’s CSRS Obligation Modification Act of 2010 is intended to remedy a unfair and inequitable methodology for allocating the Postal Service’s share of Civil Service Retirement System (CSRS) retirement benefit liabilities for employees that provided service to this country under both the Post Office Department and the independent United States Postal Service.”

According to a January 2010 report by the United States Postal Service’s Office of Inspector General (USPS-OIG), the Postal Service paid more into the Civil Service Retirement and Disability Trust Fund that it would have paid if a more equitable methodology were used to allocate CSRS retirement benefit liabilities between the Federal government and the United States Postal Service.

Source: Postal Employee Network

Why Offer Discounts on a Money-Losing Product?

The USPS claimed once again that it loses money on Standard flats mail, just days after kicking off a huge discount program on – guess what? – Standard flats mail.

The claim that Standard flats is "under water" was repeated in the USPS’s request for “exigent” rate increases: “To fully close the coverage gap, Standard Mail Flats prices would need to increase by 16 percent,” wrote James M. Kiefer, a USPS pricing economist, in a statement submitted to the Postal Regulatory Commission.

The discounts – up to 30% for some pieces sent by large mailers – are part of the second annual Summer Sale on Standard mail. The sale's discounts are the same for Standard flats -- mostly catalogs and retail circulars that are not in carrier-route bundles -- as for "profitable" categories like Standard letters.

The Postal Service decided to take “a cautious approach” and only increase Standard flats rates by 5.1%, Kiefer said, because “increasing postage prices too much at this vulnerable point could force catalog mailers to cut their customer lists.” Some mailers in the category (especially low-volume mailers of lightweight pieces), however, would get rate hikes rivaling the 8.0% average for Periodicals.

In any case, how can the Postal Service claim on one hand that rates for Standard flats should be raised at least 16% while on the other hand justifying temporary discounts of up to 30% on that same type of mail?"

Source: Dead Tree Edition