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Postal Rate Increase Denied | Red Ink Diary

Postal Rate Increase Denied

No postage rate increase this coming January. This is good news for online sellers and presumably a nightmare for the USPS which needs to find $5.5 billion this year as they are required by law to pre-fund retiree health benefits.

The independent Postal Regulatory Commission has denied a special rate increase for first class mail letters, postcards, periodicals, parcels and other services requested by the Postal Service last July to be effective January 2011.

The proposed increases would have raised the cost of a letter to 46 cents, other mail categories ranged between 4% to a swingeing (def.#1) 23%.  The last first class rate increase was in May 2009, from 42 cents to 44 cents.

The Postal Regulatory Commission did not mince words,

… the case for a permanent $3 billion a year revenue boost is not made by passing reference to “dire financial circumstances.” Postal Regulatory Commission Order #547 page 58

Surprise!

Mail volume continues to drop with every increase.

The Affordable Mail Alliance, a pressure group coalition of postal customers says it is all about inefficiency.

“In Fiscal Year 2007, the last complete fiscal year before the start of the current recession, the Postal Service still carried an infrastructure and workforce designed to handle 300 billion pieces of mail annually - almost 50% more than actual mail volume.”

The Postal Service expects losses of at least $6.5 billion in the fiscal year that ended yesterday and anticipates another $7 billion loss next year. In an interesting opinion piece on Politico.com, Senator Susan Collins of Maine who has authorization and appropriation oversight over the Postal Service said

“There is a financial truism that every American family knows instinctively and every economist knows by rote: When goods are priced too high or services lose value, people cut back on spending. That can be counted on — like clockwork. And sometimes, when consumers cut back, they also turn away.

Customer sensitivities to pricing and service are known market responses. Successful entrepreneurs find the right balance and work to keep it — using innovation to draw new customers, maintain current ones and increase the franchise.”

Let us give thanks!

We like to complain about the cost of postage in America but we should probably be on our knees giving thanks. Postage in the USA is downright cheap compared to other countries.

Lets compare two sellers costs, Marie lives in Quebec Canada and Bertha lives in upstate NY. Both have two identical packages to mail.

Marie will pay Canada Post $13.89 to mail her 10oz (300g) envelope Express Post (2 days) to Alberta with delivery confirmation. If she had chosen Parcel post (6 days) it would have cost her $11.88 An identical package to Utah will cost her $16.33 to send Expedited Parcel with delivery confirmation.

Bertha will pay USPS $2.94 to mail her 10oz envelope First Class to Utah, with delivery confirmation. Her identical package to Alberta, sent First Class International will cost her $5.01, delivery confirmation is not available.

Y’all come back!
Henrietta!

3 comments.

  1. I don’t understand it - if the volume of mail is decreasing then the USPS should be shrinking right along with it. Trouble is we struggle to keep these companies on the status quo when that is not the case! I was really shocked that the rate increase was denied. I think the commission was telling USPS to live within their means!…period.

  2. Dear Gran
    In a nut shell (because it is nutty) that IS a major part of the problem. The Post Office built infrastructure to handle the volume it used to have, then increased rates because it had to pay for it. Consumers, faced with the very real cost of ‘reaching out to touch someone’ opted for the telephone instead.

    Part II of the problem is that the law requires the PO fund retirement benefits as they occur. They aren’t allowed to put off the bill until later. This is sound policy and good news for retirees, not such good news for a corporation that expected to fund those benefits with promises and hot air.

  3. Instead of rate increases to gain more revenue, US Postal Service can retain millions of dollars CURRENTLY SQUANDERED by lost worker time CUSTOMER DISSATISFACTION, AND RUINED PUBLIC GOODWILL when mail carriers take cigarette breaks and other time off at apartment complexes, where they use their influence to obtain keys to gated and locked private facilities, such as recreation rooms and swimming pools.
    Here is a complaint recently submitted to USPS online:
    “On June 11, 2010 hold mail was requested by me to end June 16, 2010,and I arranged to be at home all day on June 16, 2010 to receive the volume of mail expected to exceed the capacity of my mailbox. The day before, when I returned home from travel, staff in the apartment complex office knew I had been gone because the mail carrier had told them of the hold mail.
    On June 16, 2010 at about 1:45 p.m. as I left my apartment I saw the regular mail carrier for my address driving away from the mail box cluster where my mailbox is located but when I opened it there was no mail at all. The mail carrier was at the next cluster and when I walked to that one and asked him where my hold mail was he reached to his left without needing to look, picked up a folded 8 ½ X 11 printed sheet, removed 4 pieces of mail from the fold, and handed it to me. He kept the sheet of paper and didn’t mention my hold mail but when I did he said “You got a lot of mail!”
    His tone of voice, facial expression, and body language conveyed annoyance and resentment.
    I replied that I stayed home to receive all that mail and asked him why he didn’t bring it but he refused to answer.
    About 15 minutes later I was at the recreation center of the apartment complex when I saw the same mail carrier with a large quantity of mail under his arm open the locked swimming pool gate with a key attached to a chain with all of his other keys, then unlock the recreation room door with that key and enter. There was no one in the room and it is not the address for any postal customer. He emerged several minutes later and left the way he came in, again with his own key unlocking the pool gate to exit. The key is not needed to access any mailbox on the property or to access the path to any mailbox, including the apartment manager office.
    This complaint, for which there is photographic evidence of the mail carrier at the recreation center with a large quantity of mail, seeks an end to willful misconduct by this USPS employee who:
    Violated postal rules by knowingly and deliberately failing to deliver hold mail after the hold ended. He knew all about the volume of mail which had accumulated and there were no events or conditions preventing delivery of the mail.
    Violated postal rules by knowingly and deliberately confiscating mail in his possession in the USPS vehicle instead of delivering it to my mailbox, handing it over to me in person only after I asked for it. Again, there were no events or conditions preventing delivery of the mail.
    Violated postal rules by carrying mail into a building which is not the home or business address of a postal customer.
    Violated postal rules by telling an unauthorized third party when my mail was on hold, a violation of the federal Privacy Act.”
    The week after the events described above, in which the mail carrier saw me photographing him engaged in misconduct, the same mail carrier entered the gated and locked areas again and used his camera to photograph me seated next to the pool, accompanied by his verbal taunts.
    Clearly, one reason FedEx and United Parcel Service are beating USPS is that they don’t coddle employees who engage in such pathological frolics.
    The water meter reader doesn’t roam about the gated and locked swimming pool and recreation room. Neither do United Parcel Service or FedEx drivers. Millions of workers all over the planet do their jobs every day without disturbing their customers at their homes in order to perform their bodily functions.
    The legal and peaceful actions I have taken in response to these problems have resulted in an ominous but lame letter from US Postal Inspector Alan A. Anderson alluding to “intimidation” of a letter carrier. They just don’t get it.

    THE POSTAL REGULATORY COMMISSION MUST IMMEDIATELY DRAFT, APPROVE AND ENFORCE RULES AND REGULATIONS FOR THE US POSTAL SERVICE TO PROHIBIT MAIL CARRIERS FROM OBTAINING KEYS TO ACCESS ANY PRIVATE PROPERTY ALONG THEIR ROUTE WHICH IS NOT THE LOCATION OF A MAILBOX, OR THE PATH NECESSARY TO TAKE TO REACH A MAILBOX; PROHIBIT MAIL CARRIERS FROM TAKING MAIL INTO ANY BUILDING WHICH IS NOT THE LOCATION OF A MAILBOX; AND REQUIRE MAIL CARRIERS TO MAKE ARRANGEMENTS ON THEIR OWN, USING THEIR OWN MEANS TO TAKE THEIR BREAKS AND LUNCH AT LOCATIONS WHICH ARE USUAL AND CUSTOMARY FOR WORKERS OF ANY OTHER COMPANY OR AGENCY TO USE FOR THAT PURPOSE, INSTEAD OF DISTURBING THE PEACE AND PRIVACY OF RESIDENTS AT LOCKED AND GATED AREAS OF MULTIFAMILY HOUSING.

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