Exigent Surcharge’s Days Might be Numbered

On January 26, 2014, postage rates increased by an average of 6 percent. Part of that was the Consumer Price Index (CPI) cap increase of 1.696 percent, and the rest was a 4.3 percent exigent surcharge that was applied across the board. Today we mark the passing of the 16 month anniversary of the imposition of the surcharge. And the end could be in sight. The Postal Service (USPS) is expected to reach the surcharge revenue cap set by the Postal Regulatory Commission (PRC) of $3.4 billion around the beginning of August which will be roughly 18 months since customers started paying it.

On May 15, the Postal Service reported that as of March 31, it had collected $523.4 million in the latest quarter, bringing the total collected since the surcharge was implemented to $2.511 billion, or about $5.8 million of extra customer money per day since January 26, 2014.

The USPS must give 45 days’ notice of the date it will remove the surcharge, making the notice only about two weeks away, in mid-June. Yes, the USPS could very well announce a 4.3 percent August price rollback of 4.3 percent roughly two weeks after it imposes an average 1.966 percent price increase on May 31.

Of course, the U.S. Court of Appeals could change this scenario if it issues a decision in the appeal of the exigent case by the USPS. The USPS wants to make the surcharge permanent to compensate it for the revenue it lost during the 2007-2009 recession. It has been 260 days since oral arguments were held last September in the “expedited” appeal, much longer than anyone expected. Out of concern for the impending notice date, the USPS recently wrote to the clerk of the court explaining their desire for a decision in the near term. And they pretty much demanded a decision to make the rates permanent. The Alliance and its mailer allies representing all parts of the customer base responded to the clerk that a near-term decision would be good but that it should keep the surcharge temporary, just as the recession was. The PRC also responded. All three letters can be read here.

The D.C. Circuit of the U.S. Court of Appeals releases its decisions on Tuesdays and Fridays between 10 am and 11 am eastern time. That leaves about five more opportunities for a court ruling before the USPS will be forced to announce a price rollback in mid-June. Stay tuned.

(c) 2015 Alliance of Nonprofit Mailers