Proving that it’s not just a rubber stamp 😉 for U.S. Postal Service proposals, the president-appointed Postal Regulatory Commission told the USPS to aim a little higher than the 2.4% increase it proposed for Standard Mail Flats (SMF).
Before we get to the reason for that rejection, let’s take a look at some of the price increases that WERE approved:
- Single‐piece First‐Class Mail from 45 cents to 46 cents
- Postcards from 32 cents to 33 cents
- New International Forever Stamps will cost $1.10 each.
However, when it came to the Postal Service’s proposed 2.416% hike on Standard Mail Flats (catalog-size mailings), the PRC balked because…you might want to get some coffee for this one.
SMFs are considered to be “market-dominant” products: services that don’t have any significant competition from companies such as FedEx or UPS. By law, market-dominant products must earn enough to cover their costs so that other customers aren’t subsidizing them. At the moment, SMF only covers 83% of its costs.
The post office has been reluctant to raise its SMF rates too much for fear of nudging the companies to rely even more on digital alternatives than they already do. The USPS was given 10 days to come up with a new rate proposal.
All approved rate increases take effect Jan. 27, 2013. For more information, find the PRC executive summary here.