The direct mail industry may be getting a little relief from the recent postal rate hikes.
“It’s not that postal officials have suddenly been afflicted with a case of generosity after jacking up most postal rates by more than 5% earlier this year. They’re merely preparing for what happens when (or, rather, if) the temporary 4.3% ‘exigent’ portion of the recent rate increase expires,” explains Dead Tree Edition.
Those exigent rates in January of this year, which raised rates as a temporary hedge against operating losses, are set to expire around this time next year.
“USPS has gone to court in hopes of making the exigent increase permanent,” Dead Tree Editions continues. “But if that effort fails, the surcharge will expire after bringing additional postal revenue of $3.2 billion, which will take an estimated 18 months. Postal officials apparently want to avoid across-the-board rate cuts when the exigent increase expires.”
Without the exigent rate continuance, any new rate increases would be limited to around 2% based on current rates of inflation.
And so the direct mail industry again finds itself hanging on every filing from the USPS Board of Governors. The USPS has lots of options, including capping some rates while raising others, so it’s way too early to tell what the outcome might be.
Looks like we’ll have another summer of “wait and see” with the USPS and the powers that be.