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RATE WAR: USPS, Mailer Groups Fight Over Rate Cap

A war of words has erupted between the USPS and some mailer group executives over the PRC’s ratesetting review.

‘We cannot let false and irresponsible claims made by several mailing industry leaders in a recent The Hill op-ed go unchallenged,” the USPS stated on its website.

The Postal Service was responding to an op-ed on The Hill website authored by Stephen Kearney, Executive Director of the Alliance of Nonprofit Mailers, Michael Plunkett, President of the Association for Postal Commerce, and Linda Thomas Brooks, President of the Association of Magazine Media.

“In the formal comments we recently submitted to the PRC, we show that the USPS is actually in good financial shape,” the authors wrote.

They also wrote: “If the USPS is genuinely dissatisfied with its finances, it has many ways to improve them by operating more efficiently, including rethinking operational decisions …”

And the zinger: “For years, we have seen grim predictions from USPS warning of its pending financial demise. What we haven’t seen, however, is a clear and accurate picture of its financial outlook—or any evidence of sustained cost control and modernization efforts across its vast enterprise.”

The Post shot back: “The Postal Service is not currently “in good financial shape,” despite what the authors say.”

“The authors point to the net income that the Postal Service generated from operations over the last three years, but neglect to mention that those results can almost exclusively be attributed to the exigent surcharge which they aggressively opposed,” the USPS wrote.

The Postal Service also wrote, “In another subterfuge the authors assert that they have “not seen any evidence of sustained cost control and modernization efforts … While our modernization efforts might not have been as robust as we would have preferred, given our need to conserve cash and to defer capital investments, they were significant, and our cost control efforts have been nothing short of massive.”

Behind the rhetoric is the price cap, the current system of limiting postage rate hikes for monopoly products to the rate of inflation. The Postal Service wants it eliminated. Mailers want it to stay in place.

The price cap limits postage rate hikes and forces postal management to look beyond rates to balance its budget.

Click for The Hill editorial by the mailer groups.

Click for the the USPS response.