Not since the July 1, 1885 two-cent postage reduction, and the July 1, 1919 removal of the World War I one-cent “exigent” surcharge, have we seen a general reduction in postage rates. We should experience one in April 2016, but only after postal customers will have paid $4.6 billion more than inflation. Through Sept. 30, 2015, the U.S. Postal Service reported collecting $3.52 billion in surplus revenue from customers since implementation of the exigent surcharge based on the 2007-09 recession.

There are no “winners and losers” in this episode, just customers being required to help out a necessary government agency in a time of crisis. The crisis is over, and now it is time to move on.

At the Postmaster General’s Mailers Technical Advisory Committee meeting on Jan. 12, PMG Megan Brennan assured the customers and mailing industry participants that the USPS will give at least 45 days’ advance notice before reducing monopoly mailing service prices by 4.3 percent. Both the advance notice and the price reduction were ordered by the Postal Regulatory Commission. The PRC order to keep the emergency surcharge temporary was affirmed by the D.C. Circuit of the U.S. Court of Appeals in Alliance of Nonprofit Mailers et al. v. PRC.

Brennan also said she expects the notice to come in early February for a pullback in early April. That is when most project the USPS to reach the target amount of surcharge revenue allowed by the regulator and court. Soon after the MTAC meeting, the PRC further clarified its original advance notice order by stating that the USPS must begin issuing biweekly reports on how much emergency revenue it has collected beginning on Feb. 1. It also reiterated that USPS must give at least 45 days advance notice of the date that rates will come down.

The USPS notice of a general postage reduction could come as early as Feb. 1, but is more likely to happen around Feb. 15. In the less likely event that emergency revenue lags its recent pace, the announcement might come as late as Feb. 29.

Damage already has been done to many nonprofit mailers

In the five years since the 2007-09 recession, nonprofit mailers have endured a lot. First, they have cut costs and downsized, as most businesses have in response to lower revenues. Many of our members have had layoffs, salary reductions, changes in leadership, closing of publications, and reductions in fundraising programs.

Layered on top of the general reaction to lower revenue has been a five-year period of uncertainty and, in some cases, wild swings in postage costs. Since 2010, the USPS has periodically mounted efforts at the regulator, in federal courts, and in Congress to raise postage rates higher than the general rate of inflation that was mandated in the 2006 postal law.

One of the main goals of that law—predictability—seemingly has been abandoned by the USPS. Some nonprofit magazines and newsletters, that can be essential to the organization’s fundraising, have been hit with postage increases of 10 percent to 25 percent or more over the past three years. Some have closed. And last year’s postal rate case, that took three tries to gain regulatory approval, had damaging, unexpected pricing and rules changes that continue to dog the mailing industry and customers.

Finally, many nonprofits have up and coming digital-focused new leadership. These “digital natives” come in with a bias against hard copy. Unpredictable, high and volatile postage costs add to their argument that the organization should move away from the mail. Alliance of Nonprofit Mailers members are the main internal advocates in their organizations to continue and grow the use of hard copy mail for fundraising and publications.

To read points 2 and 3, click here.

Bottomline

The bottomline appears to be that USPS leadership will keep fanning the flames of uncertainty for mailers as long as they believe that USPS cannot balance the books without above-inflation price increases for its customers.

The Alliance believes the true bottom line is that the USPS is capable and should be allowed to reduce its size and cost structure to fit the 150 billion pieces of mail it now delivers. It took almost 200 years for our national mail volume to reach 100 billion in 1980. It then doubled to 200 billion 19 years later in 1999. As it adjusted to a 100 percent increase in the 1980s and 1990s, USPS needs to adjust now to a 28 percent reduction. Pursuing excessive price increases will only exacerbate the volume reduction.

Contact Kearney at steve@nonprofitmailers.org. This commentary appeared originally in the Jan. 20, 2016 ANM Alliance Report.