I had the privilege of participating in the Envelope Manufacturers Association Spring Meeting last week. It’s always enlightening to meet with other envelope manufacturers and members of the paper-based communications industry. The theme for this meeting was Agility: The Foundation of our Future. We discussed a wide range of topics from how EMA members can leverage digital print to expand their businesses, to threats to the envelope industry in Europe and how they could impact the North American market, to the state of the U.S. Postal Service and key postal issues. EMA has an active Public Policy and Postal Affairs practice and I always come away from these meetings with a better understanding of the issues facing paper-based communications. I wanted to share some of the main discussion points:
Financially Stronger Postal Service
Among the speakers were Judy deTorok, USPS Manager Industry Engagement & Outreach, and Darrell Benjamin, Deputy Assistant Inspector General, USPS Office of Inspector General (OIG). Judy shared an update about several recent postal initiatives and Darrell highlighted recent OIG reports, including one that challenged many assumptions about the scope of USPS liabilities and the value of assets it has at its disposal to offset those liabilities. The study shows that Postal Service assets have been undervalued and the assumptions used in valuing liabilities may have overvalued these obligations. This led the OIG to the conclusion that the Postal Service is actually in a much stronger financial position than commonly thought.
Postal Reform Outlook
The mood of the postal community in Washington, DC is much more optimistic toward passage of some sort of postal reform than it was at the end of last year. There are a number of new players in the mix who have committed to working collaboratively and making the compromises needed to agree on a reform measure. Success partly depends on the primary postal stakeholders determining what elements everyone can support and jointly advocate for a common proposal before Congress. Any legislation is likely to be smaller and more focused ― no grand compromises, but rather something that could be amended into broader, “must pass” legislation.
Update on Pricing and Promotions
It now looks like the postage pricing adjustment, which was originally scheduled for April 26, will happen on May 31. Although the Postal Regulatory Commission (PRC) has approved proposed rates for First-Class Mail, Ancillary Services and Competitive Products, the Commission has twice remanded the proposed rates for Standard Mail, Periodicals and Parcels back to the Postal Service for clarification and correction of errors. In a coincidence of timing, while we were at the EMA Spring Meeting the Postal Service filed a corrected pricing proposal for these classes with the Commission. Assuming this version is approved by the PRC, the full slate of new rates will now take effect May 31.
The delay in rate implementation is also having an impact on upcoming promotions. The start date for the Emerging/Advanced Technology promotion, originally scheduled to begin May 1, has been delayed until June 1. The conclusion of the promotion has also been moved out a month (from October 31 to November 30), so the duration is unchanged. However, the Earned Value (Reply Mail) promotion will begin as originally scheduled on May 1. If you intend to participate in this promotion you must be registered by April 30. For more detail on this year’s promotions check out this recent post in SpeakingDIRECT, or contact your IWCO Direct account team.
We continue to wait for the ruling from the DC Circuit Court of Appeals on the challenges to the PRC order implementing the exigent rates on a temporary basis. The Postal Service reports that through the end of December it has collected nearly $2 billion of the $3.2 billion revenue allowed by the PRC. It projects hitting the revenue limit sometime this summer. When that happens, lacking a contrary ruling from the court, the exigent rates would need to be rolled back, so we could see a second rate adjustment to roll back exigent prices later this year.
Stay tuned to SpeakingDIRECT as we continue to bring you the latest information on postage rates and other postal issues that will affect your business.
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