PRC Remands USPS again

Today, the PRC remanded the Postal Service price adjustment in areas relating to standard mail, periodicals, and package services and products back to the USPS, AGAIN, to correct deficiencies that the Postal Service had found in its March 6, 2015 Remand Order. Although the Postal Service did file 74 pages of comments and corrections on March 12, 2015, the PRC found the filing deficient.

Once again, the Postal Service has been given an additional order to correct deficiencies in its price filing.

The PRC Order finds that the revised price adjustments still need revision, correction and clarification. The PRC filing includes this comment:

After the Postal Service addresses the deficiencies described in this Order, and files an amended notice of rate adjustment in response to this Order, the Commission will allow for 7 days from the date of the Postal Service’s filing for public comment in accordance with [the law].

The Postal Service states that the revised prices are scheduled to go into effect on April 26, 2015. . . . Pursuant to [the law] no rate shall take effect until 45 days after the Postal Service files a notice specifying that rate.

USPS Submits New CPI Rate Increase to PRC

The PRC has until April 2 to approve the latest proposed rates. Should the PRC approve by April 2, then the rates would go live on April 26. The USPS updated filing is located here:

http://www.prc.gov/dockets/daily?filterdate%5Bvalue%5D%5Bdate%5D=3-12-2015

PRC Remands USPS Rate Increase

Citing numerous errors, incomplete information, and failures to comply with the law, the Postal Regulatory Commission (PRC) today remanded the current CPI-cap rate case back to the Postal Service for Periodicals, Standard Mail and Package Services. The full order can be read here. The PRC gave the USPS until March 12 to file an amended rate case so that the April 26 implementation date can be retained. The USPS might, however, request additional time and delay the April 26 implementation.

Here is an excerpt from the order:

In recognition of the Postal Service’s pricing authority, the Commission remands all Standard Mail, Periodicals, and Package Services rates to allow the Postal Service to modify its planned rates to comply with the applicable legal standards. Pursuant to 39 C.F.R. § 3010.11(f), the Postal Service shall file its amended notice of rate adjustment and describe how the modifications to the planned Standard Mail, Periodicals, and Package Services rates comply with applicable legal requirements. An opportunity for comments from interested parties will be provided. See 39 C.F.R. § 3010.11(g). The amended notice is due no later than March 12, 2015, so that new rates that comply with applicable legal requirements can be reviewed and implemented, as planned, on April 26, 2015. See 39 C.F.R. § 3010.11(i).

The PRC order also made specific reference to discrimination against nonprofits:

In section II of this Order, the Commission determines that the unequal commercial and nonprofit discounts in the Standard Mail class violate the requirement
that disparities between commercial and nonprofit discounts must be justified. The Postal Service did not provide a justification for the proposed unequal nonprofit and commercial drop ship discounts. The Commission also finds that the Postal Service failed to adequately justify the proposed disparity for nonprofit and commercial presort discounts.

PRC Order on Exigent Surcharge Removal

The PRC has issued an Order addressing what the Postal Service must do if the Court of Appeals upholds the December 24, 2013 decision for the 4.3% exigency to be temporary.

A copy of the PRC Order is available on this link:

R2013-11 Order No. 2319-Order on Exigent Surcharge Removal

Highlights of the Order are as follows:

  • To help mailers plan, the Postal Service is ordered to provide bi-weekly estimates of the incremental and cumulative surcharge revenue it has received starting with the quarter in which the Postal Service anticipates removing the surcharge. In other words, if the Postal Service thinks it will have recouped the 2.8 billion dollars the PRC found it was entitled to receive in after rates contribution by September 2015, it will need to start doing reports on where it stands with revenue recouped every two weeks in the third quarter.
  • The Postal Service shall file with the PRC a notice of the removal of the exigent surcharge at least 45 days before the date of the removal.
  • The Postal Service is free to, but not required to, simultaneously file its cumulative CPI increase at the same time that it files the notice of the removal of the exigent surcharge so that the implementation date of the CPI rate adjustment, and the removal, are the same. However, the PRC ordered the USPS to separately file for and address compliance with the rate cap requirement, and the requirements relating to work-share discounts, in its CPI rate filing. Any CPI adjustment must be calculated on the base rate.
  • If the Postal Service elects to remove the surcharge without an accompanying inflation based adjustment, it is not required to demonstrate that the resulting rates are in compliance with the price cap or work-sharing discounts. It could simply do an across the board 4.3% rollback.
  • The PRC agreed that the Postal Service would be able to take into account (and deduct an amount from cumulative revenues) for Forever stamps bought before the exigency increase but used during the period that the exigency increase has been applied, to account for the use of Forever stamps that were bought at a lower price. The adjustment the Commission will permit represents approximately 1% of the 2.3 billion cap on the allowed surcharge.

Although no official announcement has been made, the discussions that took place before the end of the year, and the Postal Service’s postponement of its normal fall filing of the CPI rate adjustment, and filing for any incentives, suggests that the USPS is contemplating a rate adjustment that would occur at approximately the same time period. Keep in mind, that this assumes that the Court of Appeals upholds all or some limit on the 4.3% increase as a permanent price change. We are still waiting for the results of that decision.

NFocus will be closed Thursday, January 1st 2015

NFocus will be closed on Thursday, January 1st, 2015 in observance of the New Year.

Please review all of your jobs that are scheduled and make sure that you contact us to discuss any questions or changes that need to be made.

NFocus will be Closed December 25th

NFocus will be closed on Thursday, December 25th in observance of the Christmas holiday.

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NFocus Closed November 27th and 28th

NFocus will be closed on Thursday, November 27th and Friday, November 28th, 2014, in observance of Thanksgiving.

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USPS Has a Great Year, and Says So

Alliance of Nonprofit Mailers: Anyway you cut it; the USPS had a great fiscal year 2014. Their announcement even had something positive in the headline, “U.S. Postal Service Reports Revenue Increase,” for the first time in recent memory. And though there was much positive to report, you can almost hear Pat Donahoe quote Butch Cassidy to Postal CFO Joe Corbett: “Don’t sugar coat it like that, Kid.”

The headline also said, “$5.5 Billion Loss in Fiscal 2014,” but as we have been saying for months, the reported loss was entirely due to non-cash accounting adjustments. Actual cash on hand was over $5 billion or 19 days of operating cash versus the single digits at the low point. The Postal Service Fund held $5.1 billion on September 30 and $5.5 billion on October 31. So again we see that the liquidity crisis that the USPS cited many times as a driver of needed legislation is no longer with us.

Highlights of USPS performance in FY 2014 included:

  • Operating revenue was up $1.9 billion over 2013 to $67.8 billion, excluding a one-time adjustment last year related to Forever stamps.
  • The non-cash accounting entry for the retiree health benefit non-prepayment subtracted $5.7 billion from the reported results.
  • An additional $1.2 billion in non-cash workers’ compensation expense driven by low interest rates and higher projected future costs further drove the reported loss.
  • Revenue grew for the second year in a row, caused by package shipping volume increases and by price increases on mail combined with much smaller volume declines.
  • Total mail volume was 155.4 billion pieces, down slightly from 158.2 billion last year. The mail decrease was 2.8 billion pieces or 1.8%. Shipping volume grew by 300 million pieces or 8.1%. Standard Mail, which is used heavily by nonprofits, decreased by only 495 million pieces and First Class Mail dropped 2.2 billion in volume.
  • Excluding a non-cash charge for interest rates related to workers compensation, overall operating expenses were down to $71 billion from $72.1 billion the year before, a major accomplishment.

 

Alliance Report 14/22 November 19th, 2014 p.5 [PDF file]. Available from http://www.nonprofitmailers.org/index.php/members/alliance_reports/

New Postmaster General Selected

 

The USPS Board of Governors selects Megan Brennan as the 74th Postmaster General and CEO of the USPS

I am deeply honored and humbled to take on this role at such an exciting time for the organization.  The Postal Service plays a vital role in America’s society and economy and I’m looking forward to strengthening that role and meeting the demands of a rapidly evolving marketplace in the years ahead, said Brennan.

Read more here:

http://about.usps.com/news/national-releases/2014/pr14_061.htm

 

NFocus Closed September 1st, 2014

NFocus will be closed Monday, September 1st, 2014 in observance of Labor Day.

Please review your jobs that are scheduled and make sure you contact us to discuss any questions or changes that need to be made.

 

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