The 2018 USPS rate increase became effective Sunday, January 21, 2018. The overall rate increase for all classes is 1.92% but its financial effects on each mailing will differ based on
- mail class used
- mailing piece count
- mail piece characteristics.
There is also a Postal Regulatory Commission (PRC ) proposal to modify the pricing authority of the USPS under the current 2006 Congressional framework (called PEAA). Currently, the USPS is constrained from raising the rates for its market dominant products and services beyond the average consumer price index (CPI) for the prior year. Competitive products can seek increases based on market elasticity.
The PRC has proposed an average increase ceiling of the CPI percentage plus 2% annually for the next 5 years. After that time, the USPS' financial standing will be reviewed to develop future pricing authority. The PRC also challenged the USPS to increase prices for products that have costs failing to be covered by their revenue. The major products impacted include
- periodicals class
- marketing mail flats
- bound printed matter flats
Higher than normal increases are likely in these areas. but the average increase must stay within its boundaries.
The USPS still does not have a Board of Governors (BOG). The White House has recommended three candidates for Congressional approval. The industry is asking the White House to recommend a fourth governor because there are procedural requirements that require the vote of four non-postal BOG members. The USPS cannot offer 2018 promotional incentives without BOG approval.
We will continue to consult with our customers about the rate increase and work to provide the most economical postage solutions for publishers' mailings and direct mail. Have a question for Cenveo's VP of Postal Affairs and Distribution? Simply click the button below.