Will we really see postal rate reductions?

All signs point to mailers seeing a decrease in postal rates sometime in April 2016 as the exigent surcharge is set to expire. If the surcharge ends as approved by regulatory process, it would mean a reduction of overall postage rates by 4.3 percent. The exigent rate increase, put in place in early 2014 to help the USPS offset losses during the recession, was to remain in effect until it reached its $4.6 billion cap. It is estimated that the USPS will reach the predetermined cap around April 10, 2016 at which point it should be removed from all mail rates.

However, the USPS continues to ask Congress to intervene by passing legislation which overrides the regulatory process and previous decisions. While we are optimistic that the exigent rate will cease as approved by the Postal Regulatory Commission (PRC), we’re urging our clients to maintain their postal budgets as-is; it is hard to predict if Congress will act.

Assuming the rates are reduced, we’re encouraging nonprofits to utilize that surplus to raise additional funds with direct mail. It would be an ideal time for all mailers to replenish coffers from the recession as well by driving donations and sales with more direct mail campaigns.

This is a sentiment echoed in the nonprofit industry and could be a win-win for mailers and the USPS. In an interview with The Nonprofit Times, Stephen M. Kearney, executive director of the Alliance of Nonprofit Mailers, reports that many of his members plan to mail more in an effort to generate more donations. “We actually think this will give a boost to the Postal Service and it will help nonprofits by giving them the ability to mail more and generate more contributions,” Kearney told the publication.

We’ll continue to keep all our mailers informed of how the 2016 postal rates will change. We’re always here to answer questions about rates or how you can best protect your postal budget. Please don’t hesitate to reach out with any questions.