With the end of the exigency surplus collection in sight, mailers may be in for some relief in the form of lower rates. But don’t expect it to last.
Earlier this month, the USPS submitted a new rate chart expected to go into effect in April, with reduced postal rates thanks the end of the exigency hikes.
According to their most recent exigency surcharge report, submitted last week, the USPS has just $287 million left to collect on the exigency surcharge. Once that surcharge is met, the rates are slated to roll back, removing the 4.3% exigency bump. Depending on how the USPS calculates things, this means a rollback notification could go out in one to two weeks, to meet the required 45-day notice period.
The USPS representative from the Pricing and Costing department seemed confident that the exigency will roll off in April, as this was part of the original ruling back in 2013, even though wrangling continues on all sides of the issue, with some lawmakers looking to make the emergency hikes permanent.
Two items that could still impact the roll back would be any congressional activity like the bill proposed by Senator Tom Carper (introduced last fall but not gaining much support), or a DC court of appeals ruling. Industry and association legal experts continue to feel that the USPS does not have a strong case in making the rate hike permanent, and the longer this drags on the less likely the appeals court will be to act prior to April.
Time is running out for legal action and appeals, and neither Congress nor the appellate process is known for moving quickly.
Let’s not expect long-term relief, however. The industry escaped an annual price increase in January, partly due to the pending court case. A very likely scenario could be that no rulings are made on this case and the roll back is allowed to happen in April. If so, we would not be surprised to see USPS give the industry a postage increase in January 2017 to offset that roll back.
We’ll continue to monitor this situation and bring you updates as we learn them.
Information and insights from:
Mr. Tom Watry
Manager of Mailing and Distribution