Postmaster General (PMG) Patrick Donahoe has announced that the Postal Service will not be filing for a price adjustment in January and will wait until early 2015 to reconsider any price changes.
The Postal Service is postponing the adjustment until the court of appeals rules on whether the exigent increase is temporary (as the Postal Regulatory Commission (PRC) ordered) or permanent (as the USPS wants). This ruling will not be made for another month or two.
It appears the Postal Service is waiting to see how the ruling goes:
- If the court upholds the increase as temporary, the exigent prices would need to be rolled back around August/September 2015. It would be challenging for both the Postal Service and the mailing industry to support two pricing software changes in one year. So the Postal Service would likely wait and make one price change incorporating both the exigent roll-back and any CPI increase available at one time.
- If the court rules the increase as permanent, the USPS would likely move forward with a CPI increase. But by the time the ruling is out, the implementation couldn’t happen until at least late March or early April.
One of the most frequent questions we receive from clients planning the coming year’s marketing budget is, “What’s going to happen to postage prices?” Since the CPI price cap for postage price adjustments was established, that has usually been an easy question to answer. But the uncertainty around how the court will rule on the exigent prices has made such predictions much more complicated this year. The PMG’s announcement takes away a little of the uncertainty and provides mailers with at least a couple extra months before we need to deal with another price increase.
The IWCO Direct postal team is monitoring the situation and we will share any updates through SpeakingDIRECT.
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