Distribution Directions Vol 9 No 3 Postage Rate Increase and Early Retirement

In a memo to their membership, the Association of Magazine Media (formerly the Magazine Publishers Association / MPA) announced the U.S. Postal Service could be increasing rates by 1.7% in April, or even late March, rather than May.

MPA said it has been widely expected that pending the outcome of the Postal Service’s appeal of its loss in the exigency case, the Service would file for a normal CPI-capped rate increase in February, to be implemented in May.

However, as those of you that follow the Postal Regulatory Commission’s (PRC) calculation of the allowable increase under the cap know, the increase USPS could ask for – based on a 12 month rolling average – decreased to 1.7% in December and is expected to decrease again when the Bureau of Labor Statistics announces the next month’s CPI results on January 14th. Therefore, it appears likely that USPS will hasten its filing to maximize the increase it can request.

MPA believes Postal Service management is presenting the filing to the Board of Governors during their closed sessions Monday and Tuesday and assuming Board approval, USPS will file its case with the PRC this week.

In fact, the new Postmaster General, Patrick Donahue, has invited industry representatives, including MPA, to a briefing on several matters, including the next rate increase this Thursday morning.

Here’s the timeline: Assuming a filing on January 13th, USPS will be able to raise rates for each class up to 1.7%. The PRC would have up to 45 days to review the filing, followed by at least 30 days for software and system modifications. Based upon this timeline, postage rates could increase in April – or even late March – rather than May.

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We will provide more information as it becomes available.

Early Retirements Coming Soon for USPS

The U.S. Postal Service plans a new wave of work-force cuts through reductions-in-force and early retirements, to begin sometime by March. Postmaster General Patrick Donahoe announced the plan to senior postal executives, but he offered no details on which or how many employees would be affected or on what the terms of those early retirements and reductions-in-force will be. "As we continue our restructuring, we anticipate that Reduction in Force (RIF) and Voluntary Early Retirement (VER) processes will be initiated by the end of this fiscal quarter," adding that the agency will be "as transparent as possible about goals and objectives during this time." Donahoe added that the agency plans to close some district offices, but he did not specify which ones or when they would be closed. At this point, no decisions have been made on the number of offices or employees to be cut, USPS spokeswoman Joanne Veto said. The goal "is to make sure that the Postal Service has the right complement of people in the right positions in the right geography to be efficient and effective moving forward," Veto said. The Postal Service, which lost $8.5 billion in fiscal 2010, currently has about 676,000 career and non-career employees.

Source: Federal Times

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