Mailers Watch and Wait 

 September 11, 2019

The wait continues.  Who will act next in the quest to “reform” the Postal Service?  We believe the next chapter will be written by the Postal Regulatory Commission.  The regulator now has a slate that includes three new Commissioners—Vice Chairman Michael Kubayanda, Ann Fisher, and Ashley Poling.  New leadership should enable the agency to revive its “ten-year review” of the rate regulation of USPS.   

Its first attempt in December 2017 was met with widespread dismay and opposition by all mailers.  It proposed to enable the USPS to levy supra-inflation surcharges on postage increases for at least the following five years.  We estimated that mailers could see rate increases compounding to 28 to 40 percent in that half-decade.  Making a bad situation even worse, the regulator proposed no methods to improve the efficiency or effectiveness of the monopoly provider.  Only massive rate increases that would drive away the very volume and revenue the Postal Service desperately needs. 

So, we and other mailer associations are bracing for a potential new proposal.  Our concern again is that the regulator seems to believe its purview is limited to rates and nothing else. We also have the strong legal opinion that Congress hard-wired the CPI cap in the 2006 postal law, and no agency has the power to overrule Congress.  It is widely believed that such an attempt by the PRC will be challenged in the U.S. Court of Appeals.  But while the judicial system plays out, the PRC is likely to allow the USPS to start the damage.