On 12/01/2017, the PRC concluded its 10 year review of the rate setting system for Market Dominant products by proposing to raise postal rates from CPI to CPI plus 3-5%, depending on rate class. The Notice of Proposed Rule Making comment period is open for 90 days, concluding on March 1, 2018 with a 30 day reply comment period to follow. The PRC’s announcement and NPRM are available here and key provisions are summarized below.
Key proposals of the PRC’s Notice of Proposed Rule Making include:
- A 2 percentage points increase in rate authority per class of mail per calendar year for 5 calendar years.
- Up to 1 percentage point of rate authority per class of mail per calendar year, contingent on the Postal Service meeting or exceeding an operational efficiency-based standard and adhering to service standard quality criteria.
- A required rate increase for any non-compensatory product of a minimum of 2 percentage points above the percentage increase for the class.
- Establishment of two bands –ranges with upper and lower limits—for workshare discount passthroughs: (1) band range of plus or minus 25 percent for Periodicals; and (2) band range of plus or minus 15 percent for all other classes. Non-compliant passthroughs would be subject to a 3-year grace period.
Earlier this year DMA led a large coalition of mailing industry leaders in comments to the PRC supporting the current ratemaking process, and advocating for its continuation. If you are interested in learning more about coalitions like these, please contact Chris Oswald or Emmett O’Keefe.