Postal update: Plan for 3 percent, not 3.5 percent, postage increase in 2013
September 11, 2012 - It’s only half a percentage point, but we’ll take it. While ABM Postal Counsel Jack Widener last week advised publishers to budget for a 3.5 percent postage increase in 2013, Widener now says the Postal Regulatory Commission has clarified the calculation process for determining banked rate authority, which eliminates the banked amount USPS had accumulated. Widener originally forecast an additional CPI banked increase of 0.5 percent to 0.6 percent.
The annual CPI increase, which goes into effect on January 27, 2013, continues to appear to be in the 2.5 percent to 3 percent range, with about two more months of data to be included before the increase is officially announced in mid-October, according to Widener, who adds that the CPI has been trending down for the last several months.
Widener also notes that publishers shouldn’t budget for the exigent rate case or additional legislation, but they should be considered as outside risks:
Exigent Rate Case: “The Postmaster General is still standing by his guns and saying he will not pursue an exigent (special) rate increase from the Postal Regulatory Commission,” says Widener. “Many believe he wants to put as much pressure on Congress to make long-term changes. By taking an additional rate increase it would take some of that pressure off Congress and would only provide temporary relief, not long-term changes.”
Legislation: “Anything is possible with Congress, but present legislation contains language that would delay any rate increases for periodicals for at least two years,” says Widener. “This was due to ABM’s Washington Lobbyist working with representatives from periodical groups who worked with Congress. Rate increases for other classes of mail have also stopped to this point.”