Postal pricing

Regulators have concluded the Postal Service’s current pricing system doesn’t work.

The Postal Regulatory Commission (PRC) has proposed an alternative system to regulate rates and classes for some USPS products and services, part of the regulators’ 10-year review of the Postal Service’s market-dominant pricing system.

Under a 2006 law, the PRC must review the system used for regulating rates and classes for market-dominant products, including First-Class Mail and Marketing Mail. The goal is to determine if the system is meeting its objectives, which include enabling the Postal Service to be financially stable.

The PRC has concluded the current system doesn’t work and needs to be changed because it doesn’t allow USPS to achieve its mission in a financially sustainable manner. The PRC has proposed the system be replaced with an alternative price cap system and has asked all interested stakeholders to provide comments on its proposal.

In a statement, PMG Megan J. Brennan said the Postal Service agrees with the PRC’s conclusion that the current system doesn’t work and needs to be changed. USPS is now analyzing the PRC’s alternative price cap proposal.

“We continue to believe that any price cap is unnecessary in the rapidly evolving postal marketplace, for which all of our customers have alternatives to using the mail,” the PMG said.

“We seek a regulatory system that gives the Postal Service the flexibility to adopt the pricing innovations that will be critical to our ability to compete in the marketplace and to create business value for our customers both today and in the future, and we will continue to work with the commission and our customers to ensure that the mail remains a valued means of commerce and communications.”

In addition to a pricing system from postal regulators that provides USPS with greater pricing flexibility, Brennan said returning the organization to financial stability requires the enactment of postal reform legislation and management’s continued efforts to control costs, boost efficiency and enhance postal products and services.

The PMG’s full statement is available on the USPS Newsroom site.