Postal Service Exigent Surcharge Pricing to End April 10
WASHINGTON — Absent Congressional or court action to extend or make permanent an existing exigent surcharge for mailing products and services – including the Forever stamp — the Postal Service will be required to reduce certain prices on Sunday, April 10, 2016. This mandatory action will worsen the Postal Service’s financial condition by reducing revenue and increasing its net losses by approximately $2 billion per year.
“The exigent surcharge granted to the Postal Service last year only partially alleviated our extreme multi-year revenue declines resulting from the Great Recession, which exceeded $7 billion in 2009 alone,” said Postmaster General and CEO Megan J. Brennan. “Removing the surcharge and reducing our prices is an irrational outcome considering the Postal Service’s precarious financial condition.”
An order from the Postal Regulatory Commission (PRC) requires the 4.3 percent exigent surcharge to be reversed after the Postal Service has collected surcharges totaling $4.6 billion. As outlined in a notice filed with the PRC today, that amount is expected to be reached by April 10th.
Postal Service prices for Mailing Services are capped by law at the rate of inflation as measured by the Consumer Price Index for all urban consumers (CPI-U). However, the law does allow for exigent pricing (price increases beyond the CPI-U cap) due to extraordinary or exceptional circumstances. That was the case when the Postal Service sought and ultimately received approval for the current exigent pricing, citing the severe effects of the Great Recession on Postal Service mail volume.
However, the PRC did not accept the views of the Postal Service concerning the extent of the harm resulting from the Great Recession, and the PRC strictly limited the period of time that the Postal Service could continue to collect the exigent surcharge. While the Postal Service has experienced rapid growth in package volume over the past few years, it is not nearly enough to offset the decline in revenues from Market-Dominant products, especially First-Class Mail.
Brennan added that the Postal Service’s current pricing system, where products that generate roughly 76 percent of its revenues fall under the statutory price cap, is fundamentally unsuited to the Postal Service’s current business environment in which First-Class Mail volume continues to decline and the network costs required to provide universal service continue to rise.
According to Brennan, “our current pricing regime is unworkable and should be replaced with a system that provides greater pricing flexibility and better reflects the economic challenges facing the Postal Service.”
The surcharge removal means these First-Class Mail prices will be adjusted to the following:
| Current | Mandated Reduction | |
|---|---|---|
| • Letters (1 oz.) | 49 cents | 47 cents |
| • Letters additional ounces | 22 cents | 21 cents |
| • Letters to all international destinations | $1.20 | $1.15 |
| • Postcards | 35 cents | 34 cents |
Commercial prices will also decrease. A complete listing of the new prices, effective April 10, is available at www.usps.com.
Wait a minute. ….. the unions are telling me how we are making all this $, yet the PO just said our financial situation will worsen by $2 billion. I’m so confused. Could it possibly be that the PO spins things one way and the unions spin it the other way? So it seems the truth may be in the middle. I’m just sayin’……. and the game continues
Usps is already crying about how much it will lose anually! Gas has dropped from 3.19 down to 1.45 a gallon!!!! That’s a 1.74 savings. So tell me how you are ALREADY ALREADY ALREADY projecting a 2 million dollar loss, I want to know!!!
And yet, in the so called financial straits that postal mgmt says we’re in………….they still increase hq staff by 65%, and have two limos and chauffeurs on call………….along with still having the postal funded private exec gym available.
Unbelievable, the hypocrisy involved.
postal mismanagement is very good at the blame game………always somebody else’s fault. never their fault. bring in a audit team of professors from the Harvard Business School……and let the chips fall were they may. let Harvard right size the PO Mismanagement!
Brennen just another in-bred po bureaucrat. US Post Office is not on the same business level of UPS or FDX. meet the new boss….same as the old boss. losing money is a sport the whole po mismgt enjoys! funny they just got what they wanted, 1/3 of workers now lower paid as they have replaced higher paid retired one…..still losing money. If UPS and FDX shut down for 365 days….the PO would still end year with a loss….its what they do! how many ways can you say loser!
We wouldn’t be in this mess if it wasn’t for the politicians and of course our own postal management in Washington
when Donald J Trump becomes President he should do what Jimmy Carter did with the 1978 Airline Deregulation Act. 2017 Post Office Deregulation Act. 20 Trillion Dollar National Debt and a Postal Circus that loses Billions………….time for these losers to be kicked to the curb so a delivery service for the American public and not for the po mismanagers bank accounts can go forward. any why not! capitalism vs socialism business model……let the people decide.
Explain – exactly – what the national debt and the usps have to do with one another.
I’ll be waiting.
we need 110,000 Postal Mismanagers like we need a hole in our heads. what is the bi-weekly mismanagement payroll numbers? what was this years total PFP bonus $ number? notice they always point the finger at other things being the problem…..and never themselves. po mismanagers have lost over $90 billion since 2009……..do you really think Donald Trump would allow managers in his company to lose over $90 billion and still have a job? only in this corrupt, dysfuctional federal government.
Why is the USPS being picked on by the Congress? Don’t they have anything better to do? There are other issues that need dire important attention!
Early Out Incentive time.
Dear Bob Blob,
Truer words were never spoken!