USPS Regulator Approves July Rates, But Urges Governors To Exercise Business Judgement
The Postal Regulatory Commission has approved requested rate changes for July 2024, but not without a strongly worded statement urging the Board of Governors to consider exercising their business judgement when considering how much to increase postage costs.
While the proposed July increases were found to be consistent with applicable law, the Commission raised concerns about the widespread effect of the proposal and whether these rates are in the best interest of all stakeholders.
Although the price adjustments proposed in this proceeding are consistent with applicable law and the Commission has no legal basis to reject the proposed changes, the Commission is concerned, given the current state of affairs, that the Postal Service’s proposal does not reflect reasoned consideration of the potential widespread effects of its proposal, is not prudent, and is not consistent with the best interests of all stakeholders.
Specifically, the Commission remains concerned about the substantial declines in Market Dominant volumes, overall service performance for Market Dominant products, and the Postal Service’s overall financial situation, issues that have all remained significant, if not worsened, since the current Market Dominant ratemaking system went into effect.
The Commission has opened Docket No. RM2024-4 to consider whether the current ratemaking system is achieving its objectives and reminded the Postal Service that it expects it “to use its business judgment in utilizing the tools provided in the system of ratemaking to craft pricing schemes and specific prices” while encouraging the Governors to weigh the possibility of not increasing rates by the full amount permitted by law.
Participants in the docket presented a number of reasons why rate increases below the legal limit may be appropriate, particularly in light of the facts that: rate increases have occurred more frequently than previously; some of the effects from the most recent rate increases in January 2024 have yet to occur, let alone be understood; and service performance and efficiency have declined by historic levels, adding to the stress on the mail market.
Read the full Order On Price Adjustments and don't miss exclusive rate comparison charts for the July changes for Market Dominant and Competitive products from Value Added Resource.
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