In most years, the proposed rate increase is pretty simple. The rates go up in the 1-4% range and are tied to the Consumer Price Index. This year there are two proposals and one of them could have a huge impact on budgets.
- Exigent Rate Increase –4.3% Average (3-12%)
- Non Exigent Rate Increase – 1.6% Average (0-7.7%)
Let us start out by saying these are the proposed rates that are to go into effect on January 24, 2014. The Postal Regulatory Commission has a comments period that extends until December 6, 2013 where these recommendations could be modified.
Postal rates are supposed to be tied to the Consumer Price Index which is running in the 1-2% range. The USPS needs their rates to be in line with this index except in the following circumstances:
- Unused Rate Adjustment – They did not adjust past rates to the full levels allowed.
- Exigent Circumstances – They have drastic conditions that require them to raise rates to higher levels. This is our big worry because anyone could argue that we have justification for larger increases.
For the past 16 years, I have been creating comparison charts for my clients that go over the changes in rates to show how it will affect their budgets. The reason that I do this is that when the USPS talks about a 1.6 or 4.3% increase, this is overall. Based on the type of mail you do, the increase could be higher or lower. You need to look at the class, weight, zone, density and special services required to see the true impact. Also, when you look at the new rate charts provided by the USPS, they typically will not show the level of detail needed (Previous and new rates side by side) to see these differences.
The remainder of this article is to pull out areas where the increases are going to be higher or lower than the averages and how the changes will affect you. Read more