Exigent Rate Increase will NOT be Permanent

The US Appeals Court ruled today that the Postal Regulatory Commission (PRC) was reasonable to determine that the impact of the 2007-2009 recession is exceptional only for a limited time until it becomes the “new normal.” In other words, we prevailed on our most important endeavor—that the exigent surcharge will not be permanent.

Given the Accountability Act’s central focus on tightly restricting Postal Service rate increases and increasing efficiency, the Commission sensibly concluded that the statutory exception allowing higher rates when needed to respond to extraordinary financial circumstances should only continue as long as those circumstances, in fact, remained extra-ordinary. The Commission’s “new normal” test is designed to capture precisely the time when the exigent character of a circumstance dissipates—when its effects lose their exceptional character—even though the effects in some literal, but-for causal sense linger. In other words, the Commission permissibly reasoned that just because some of the effects of exigent circumstances may continue for the foreseeable future, that does not mean that those circumstances remain “extraordinary” or “exceptional” for just as long.

The court remanded the case back to the PRC to do more work on its methodology to determine how much lost volume and revenue should be counted and therefore recovered through a surcharge. They did this by rejecting the PRC method called “count once” which the court described as: “In enforcing a “count once” limitation for lost mail, the Commission refused to recognize the cost to the Postal Service of lost mail volume beyond the year in which it first disappeared.”

The PRC is reviewing to determine the date. We are hoping an early August time period for removal of the exigent.

New Postage Calculators Now Available!

Standard Mail Postage: 2014 Rates and Approved May 31, 2015 Rates

Periodicals Postage: 2014 Rates and Approved May 31, 2015 Rates

NFocus Closed Monday, May 25th in Observance of Memorial Day

NFocus will be closed on Monday, May 25th, 2015 in observance of Memorial Day.

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.

Postal Regulatory Commission Approves USPS Rate Increase

Postal Regulatory Commission Approves USPS Rate Increase

Today’s ruling by the Postal Regulatory Commission (PRC) approving the proposed prices and classifications for Standard Mail, Periodicals, and Package Services enables the Postal Service to move forward with a new pricing strategy to capitalize on strong mail and package growth.

The new pricing and classification changes for all market-dominant mail classes and competitive products take effect on May 31, 2015. Additionally, the Postal Service is able to move forward with the remaining calendar year 2015 Promotions: Color Transpromo, Emerging and Advanced Technology, and Mail Drives Mobile Engagement.

More information on the new 2015 pricing and the PRC’s ruling is available at www.prc.gov .

NFocus will provide updated postal rate calculators shortly to help our partners understand their actual increases. As an example, saturation flats at the SCF are increasing from $.166 to $169 per piece. Please contact your NFocus rep for additional details. Thank you.

USPS Rate Increase- updated information

The USPS Rate increase has NOT been approved yet.

Previously, the PRC stated it would give the Public 7 days to Comment on the USPS response to the Remand Order. Based on the comment period, I doubt we will know whether or not the new rates are approved for a week or so; but keep in mind that they CAN be implemented by 5/31 if the USPS approves them as-filed.

It remains the hope that mailers will 1) prevail on the Exigency Appeal – with a decision soon – so that rates will need to be adjusted downward as soon as July or August of this year, and that 2) “possibly” the USPS could get approval of these rates, but voluntarily agree to postpone implementation so that mailers have only ONE price change this year – but that second “hope” may be a long shot. We recommend all customers plan for these rates to go into effect as of May 31, 2015.

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:


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.

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