Slow Moving Rate Wreck: Industry Saw Postage Disaster Months Ago

WASHINGTON, DC — For over two years the Postal Regulatory Commission delayed releasing the revised postal ratesetting system. Then in December, the PRC dropped the bomb, giving the USPS additional leverage to raise postage rates.

The industry saw what lay ahead, as we reported earlier this year:

PRC Finally Approves New Rate System … and Mailers Will Pay More

Mailers Face 5.6% to 7.6% Rate Surcharges in July, Says Alliance

MAILERS SUE TO STOP SUMMER POSTAGE HIKES

Postcom Joins In Legal Challenge To PRC Rate System

The striking part was, the USPS was contemplating rate hikes at the very moment it had just concluded the worst holiday service performance in its history. Service so bad, that many direct mailers lost sales because mail was not delivered before the holidays, resulting in substantial losses.

“This foreseeable circumstance in light of the impacts of COVID led to crippling delays in the mail costing the industry untold amounts in terms of sales and credibility. The industry’s faith and confidence in the USPS to perform is critical; without that confidence, alternatives for mailers throughout our coalition will become more attractive out of necessity. And, unfortunately, the industry’s confidence in USPS has been shaken,” Joel Quadracci, CEO of Quad, Inc., the nation’s largest printer, told the House Committee on Oversight and Reform in February.

“The Postal Service is at a tipping point: with the impacts of COVID exacerbating the financial situation that has challenged the USPS for the last decade, there is an urgent need to act now. If the USPS goes down the path of intolerable rate increases and disruptive service reductions, the USPS and its stakeholders will be at Congress’ doorstep again before long with the Service in even worse shape than it is now,” he said (click for full story).

Despite mailer warnings, the USPS is plowing ahead with network reductions that will slow service and, now, a crippling rate hike in August.

A tipping point, indeed.

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