MailSmart Logistics is happy to report that the exigent rate hike will be coming to an end, likely in the spring of 2016.
PRC Exigent Rate History
On Christmas Eve 2013, the US Postal Service was granted a temporary exigent rate increase by the Postal Regulatory Commission (PRC). The exigent rate was requested to offset the hardship experienced by the US Postal Service as a result of the Great Recession of 2007-2009. The goal was to allow the Postal Service to adjust to the ‘new normal’ in the mail economy.
On July 29, 2015, the PRC issued Order No. 2623 which addresses issues that were remanded to them by the United States Court of Appeals for the District of Columbia Circuit regarding Alliance of Nonprofit Mailers v. Postal Regulatory Commission (June 5, 2015).
PRC Order No. 2623 Directives:
- Authorizes the Postal Service to collect an additional $1.191 billion, adding to the already approved $2.766 billion providing a total exigent rate adjustment of $3.957 billion.
- ‘New Normal’ arguments were declined to be revisited as The Court deemed them to be well-reasoned and based on evidence previously presented.
- The Postal Service’s ‘Count Once’ methodology was approved and any alternative methodologies to increase estimated lost mail volumes was rejected.
- Efforts to revise Unit Contribution methodology were declined.
- The additional contribution was deemed Reasonable, Equitable and Necessary.
- The PRC deems that it is no longer necessary to protect mailers from additional protection.
The Postal Service has announced that it will not pursue any additional litigation relating to the Great Recession of 2007-2009 or the exigent rate. It is anticipated that the exigent rate will be removed in the spring of 2016 but that it will coincide with the Consumer Price Index (CPI) increase allowed each year; which of course needs to be approved by the PRC.
If you need any assistance navigating any of the postal changes, please don’t hesitate to contact us, we’re here to help.
