On its surface it seems like good news for commercial mailers. According to Michael Rondon in Folio:, “A federal appeals court ruled that the USPS will have to roll back its exigent rate hike in a big win for magazine publishers struggling to keep distribution costs down (or, at least, consistent),” although exactly when it expires remains up in the air.
Mary Berner of the MPA chimed in, saying “We are pleased that the court recognized that exigent circumstances are not permanent and that the Postal Service must adjust to lowered mail volumes as its ’new normal.’”
While the USPS has argued that the rate hikes should become permanent, the court saw things differently.
“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,” wrote Judge Patricia Millett in her opinion.
So mailers should be thrilled that the 4.3% “temporary” hike it going away, right? Not so fast, warns D. Eadward Tree, who calls last week’s court ruling a victory for the USPS.
“Despite news reports to the contrary, the only thing clear about Friday’s appeals court decision on postal rates is that the U.S. Postal Service won and mail-dependent industries lost,” Tree notes.
He explains that, while the court ruled that the 4.3% hike should not become permanent, it sent word back to the Postal Regulatory Commission for a recount on how deep an impact the recession actually had on the USPS. At issue is the way the USPS calculated its estimated losses: “the one thing the federal judges didn’t like about the current surcharge is the ‘count once’ rule for determining how much the recent recession cost the Postal Service.
“They court sent the Postal Regulatory Commission back to the drawing board to come up with what could be called a ‘count multiple times’ rule.”
“Nothing, by the way, says that the new ‘count many times’ surcharge has to be 4.3%: The PRC could decide to make it higher so that the Postal Service is fully compensated for its recession losses in a timely manner,” Tree warns.
Always sagacious and generally spot on, Tree reminds us of this truism: “All I know is, don’t ever bet on government getting rid of a temporary tax or fee.”
So is the ruling cause for celebration or continued cringing? We’ll have to wait and see.