Decertification Information

USPS Rate Changes

USPS Rate Change 2008

EFFECTIVE MAY 12TH, 2008

What are the changes? Last year's rate change focused on the shape and thickness of your packages, as well as the weight, and was referred to as Shape Based Pricing. (Click here for more information on the 2007 rate change.) This year's rate change is a regular price increase without the additional changes like last year. However, in accordance with the new Postal Accountability and Enhancement Act, the United States Post Office may now adjust their rates frequently to mirror the Consumer Price Index (CPI).

How will this work? Section 3622 of the Act states that the Postal Regulatory Commission (PRC) may establish, and thereafter revise, a modern system for regulating rates and classes for market-dominant products. Market-Dominant products include, but are not limited to: first-class mail letters and sealed parcels, first-class mail cards, periodicals, standard mail, single-piece parcel post, media mail, and bound printed matter.

This system will include an annual limitation on the percentage of changes in rates set by the PRC. The percentage of changes will be equal to the change in the CPI for all urban consumers, without seasonal variation adjustments, over the most recent 12 month period after the Post Office files notice to change their rates. The system grants the authority of the Post Office to establish a schedule for changing the rates "at regular intervals by predictable amounts," when deemed "necessary and appropriate."

According to this Act, the objectives of this system are as follows:

• To maximize incentives to reduce costs and increase efficiency
• To create predictability and stability in rates
• To maintain high quality service standards established under section 3691
• To allow the Postal Service pricing flexibility
• To assure adequate revenues, including retained earnings, to maintain financial
  stability
• To reduce the administrative burden and increase the transparency of the ratemaking
  process
• To enhance mail security and deter terrorism
• To establish and maintain a just and reasonable schedule for rates and classifications,
  however the objective under this paragraph shall not be construed to prohibit the Postal
  Service from making changes of unequal magnitude within, between, or among classes of
  mail
• To allocate the total institutional costs of the Postal Service appropriately between
  market-dominant and competitive products

What does this mean?
You can count on the USPS increasing the postal rates at least every year, if not several times a year. And they are only required to give 90 days advanced notice before each price increase is implemented. All changes are subject to rules set by the PRC, such as the change may not cause "unreasonable harm to the marketplace" and the Postal Service must take into account the "available alternative means of sending and receiving letters and other mail matter at reasonable costs." This system is also supposed to be reviewed in 10 years by the PRC to determine if the system is achieving the objectives stated above. If the PRC decides that the objectives are not being met, taking into account the public's comments and other factors, the PRC may make modifications or adopt an alternative method of regulating the postage rates.

All of the information above was gathered directly from the Postal Accountability and Enhancement Act and the USPS website.

Please browse through the links below for more information on these new USPS requirements or call us and ask for a free consultation with Dave Lovan or Clarence Story (depending on your location) to see how this change will affect your business.

CLICK HERE FOR THE OFFICIAL 2008 PRICE LIST
(UPDATED FEBRUARY 11TH, 2008)

United States Postal Service's website
A wealth of information from the source themselves.

Postal Accountability and Enhancement Act
The new system currently in place that grants the United States Postal Service a right to future rate increases, at their discretion, in accordance with the Consumer Price Index. Passed Dec. 8th, 2006.

Summary of Price and Fee Changes
Appendix A: New Prices and Fees from Docket No. R2008-1

"Another Potential Rate Change in 2009" Mail: The Journal of Communication Distribution (Published March 2007)

Have your business automated to make all future rate increases painless!
Acquire a Neopost Mailing Machine and a Dynamic Scale to calculate your postage for you! With the lease or purchase of a new Neopost Mailing Machine, you are ready for Online Services which will make all future rate increases automatically download into your machine on the day of the rate change.

Other helpful tools include Neopost Folder/Inserters, Addressing Printers, and Data Systems.

If you have any rate change questions, please call us at 541-726-6800 or 800-452-2601 and ask for Emily. Or you can e-mail me at Emily@BullfrogEnterprises.com.

Page last updated February 13th, 2008.