June 13, 2018

We are becoming more optimistic that any above-inflation rate increase is not as likely to happen this January, as many customers fear.

We continue to believe that the PRC will not act on its ten-year regulatory review recommendations until quite a while after the President’s Task Force on the United States Postal System finishes its work.  The deadline for the Task Force report is August 10.  It has received an outpouring of suggestions from all quarters.  Likewise, the PRC is faced with poring through hundreds of pages of reply comments it received on March 30, mostly denouncing its original proposal.

The normally-scheduled January 2019 postal rate increase depends on a very quick PRC decision, if it is to include anything above the CPI cap.  Even more fundamentally, a USPS price change also depends on Senate confirmation of at least one Governor.  The rate increase for January 2017 was filed on October 10, 2017 and approved by the regulator on November 11, 2017.  So, at most there will be only two months between the report by the Task Force and the normal time to file a rate proposal.

On the new Governor front, we hear that one may have dropped out: Republican Calvin Tucker.  We also hear that the confirmation of former USPS Inspector General David Williams is being held up by Senator Lisa Murkowski (R-AK).  It apparently is over a 2011 report written by the OIG when Williams was IG, about the excessive cost of the Alaska bypass for shipment of goods to Alaska, titled Alaska Bypass: Beyond Its Original Purpose.  Williams seems to think he will work it out.  The third candidate is Robert M. “Mike” Duncan, former RNC chairman, was introduced by Senate Leader Mitch McConnell at his confirmation hearing, a rarity.  Both hail from Kentucky.  Normally, members of different parties are “paired” when confirmed by the Senate.  Williams said he is an Independent at a recent conference, so he could be paired with Duncan.