Over the past few weeks I have had a number of people reaching out to me asking for my “best guesses” on what to expect with regard to next year’s postal rate adjustment and promotions.
I have taken the opportunity to pick the best “brains” in the business, as well as my own thoughts to share. Here is what we are thinking and seeing in our dusky crystal balls:
- The price adjustment will be under current law within the price cap. The current cpi to date is 1.3%. There appears to be some inflation, but the price cap is not likely to exceed 1.5%.
- The Postal Service has announced that it will continue promotions next year. They will be similar to the promotions that were in place in 2020. The beginning and ending dates, and requirements could be “tweaked.” But we should expect to see very similar promotions.
- The Postal Regulatory Commission is not likely to issue a decision in the 10-year rate review before the election. With all of the changes in the postal and business environment since the last Order and proceedings in the rate review due to COVID-19, the potential for some type of Postal Service relief in any federal stimulus package, and the vastly changed financial and volumes picture of the USPS., with the Postal Service actually seeing a growth in revenues due to increased parcel/ shipping services, the PRC would be hard pressed to do a ruling that gave the Postal Service additional pricing authority based on the current record before it.
- With shipping volumes continuing to be strong and USPS revenues actually up, along with the pending surcharge for commercial shipping prices, over the Holiday season – an Exigency request would seem to be a nonstarter.
- The PRC could issue a completely different order in the 10-year rate review, or decide it needs to gather additional evidence to consider the many changes in the legal and postal environment that occurred since the last order and recommendation.
- We also believe that the associations in the mailing industry did a good job in showing the lasting harm that would occur to the Postal Service, and the precipitous loss of volume, that would occur—even before COVID—if the PRC proceeded with its original recommendations.
These have been very unusual times with the new PMG. After months of no response to efforts by the mailing industry to reach out for a meeting with the PMG, the associations received what looks like a form letter that does nothing to take industry up on its offer and efforts to meet. See PMG Reply to Assns Ltr 8-13-20
Speaking from my own perspective, I believe the lack of engagement with the industry was a grave mistake on the PMG’s part. If anyone paid attention to the recent bunch of hearings before the Senate and the House, and the recent House subpoena of the PMG, I wonder if the PMG has stopped to think that it might be nice to have friends, or at least allies, in the mailing industry. One thing I learned during these hearings is we cannot feel ‘too insulted’ by the PMG’s lack of engagement. I learned that the PMG has done nothing to reach out to leaders in Congress, or even the Chair of the Postal Regulatory Commission. (Some consider the PMG’s opening remarks at a recent meeting as blaming the PRC for the USPS’s financial problems – probably not how I would try to win friends and influence people. It appears his efforts to “learn the business” have been limited to date to communications with the Postal Board of Governors and internal staff and labor.
As much as I find that failure to reach out to customers—particularly during these challenging times—distressing and a breach of trust with the customers that pay ‘his salary’ and are the sole funders of the USPS, I will keep hoping that circumstances and communications improve. I will keep working individually, and with other association leaders, to remind the Postal Board of Governors and the PMG that without the mail, including First Class Mail, Marketing Mail, Periodicals and Non-Profits the Postal Service is “just” another delivery service. The Postal Service’s relevance and importance to America, and its ability to fund and run its network, depends on listening to and serving ALL of its customers.
When and if I get more specific information or insights, I will share them with members.