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Rate Increase Effective May 11th, 2009
In a press release issued 2/10/2009, the USPS announced their detailed 2009 rate increases for each of the major mail classes. These new rates are scheduled to become effective Monday, May 11, 2009. In their press release, the USPS stated:
Rising operational costs make the price adjustments necessary; the increase tracks the 2008 rate of inflation. "The Postal Service is not immune to rising costs which are affecting homes and businesses across America today," said Postmaster General John Potter. "Even with the increases, the Postal Service continues to offer some of the lowest postage prices in the world."
For the average household, the First-Class Mail stamp price change will represent an additional $3 over the course of the year. When compared to annual increases in other household expenses, such as groceries, healthcare and utilities, the Postal Service continues to be an economical choice for shipping and mailing during tough economic times. For First-Class Mail, there will be no changes in the current additional ounce price, which remains at 17 cents.
"Whether you're a consumer or run a business, the Postal Service continues to offer a good deal during a time when we're all looking for ways to save," said Stephen M. Kearney, senior vice president for customer relations. "Our range of shipping and mailing options and low prices make the Postal Service the smart and easy choice."
Under the Postal Accountability and Enhancement Act (PAEA), USPS increases for each class of mail are capped to the U.S. Bureau of Labor Statistics' reported increase in the annual CPI-U Index (Consumer Price Index for Urban consumers) for the previous calendar year. This CPI-U increase for 2008 was 3.8%. The new postal law, however, contains a special "banking provision" that allows the USPS to defer a portion of an increase not used in a given year to apply in a subsequent year. In this May 11, 2009 increase, the USPS has chosen to take advantage of that rule for several of the major mail classes, resulting in slightly larger or lesser increases than the current 3.8% cap. The following table provides the details of the increases across Mail Classes, including the "banked" amount being used or saved. The table also provides average increases for some of the specific sub-categories of mail within each major class.
| First-Class Mail |
3.8% |
(0.029%) |
3.771% |
| Single-Piece Letters & Cards |
4.616% |
| Presorted Letters & Cards |
3.080% |
| Flats |
3.882% |
| Parcels |
2.567% |
| Periodicals |
3.8% |
0.166% |
3.966% |
| Outside County |
3.973% |
| Within County |
3.802% |
| Standard |
3.8% |
(0.019%) |
3.781% |
| Letters |
3.829% |
| Flats |
2.306% |
NFM / Parcels |
16.425% |
| Carrier Route |
4.310% |
| High Density Letters |
1.248% |
| High Density Flats |
2.233% |
| Pkg. Services |
3.8% |
-0.0- |
3.800% |
Single-Piece Parcel Post |
4.450% |
| Bound Printed Matter Flats |
-2.000% |
| Bound Printed Matter Parcels |
2.504% |
| Media / Library Mail |
7.468% |
Be advised that class averages can be somewhat misleading. While the average increase can be used for estimating, RR Donnelley encourages all mailers to process their particular mailing through a rate calculator to determine exactly how much that mailing may be affected. We have updated the rate calculators on our website to reflect the May 11, 2009 increases.
RR Donnelley also encourages everyone to visit the USPS website to review the official rate tables, as there are some exceptions that may affect your postage. The official rate tables can be found at: www.usps.com/prices 
Rate Increase Process:
Some questions have been raised about this new rate increase process. In the past, a rate case required litigation and a very prescribed process. Under PAEA, the rate-setting process needs only a simple recommendation by the USPS and approval by the Postal Regulatory Commission (PRC). This streamlined process holds as long as the USPS keeps the increase to once a year, and to an average by Class of no more than the CPI-U with the option of using the "banking provision". The PRC no longer serves as an arbitrator of a protracted rate-setting process. Under PAEA, the PRC's role is to confirm that the USPS's math is correct, and that the recommendation has complied with the law. In addition to this change, there is no approval by the Board of Governors (BOG) under the new process.
Postal Rule Making:
Beyond the rate increase, there will be many upcoming rules issued by the USPS around addressing, mail preparation, and other requirements that may affect mailers and companies that prepare mail. One such rule concerns the Intelligent Mail Barcode (IMB). Intelligent Mail is a concept that is fully supported by the mailing industry, but represents a major change to the entire process of tracking mail, identifying mail pieces, and requesting special services.
Following more than three years of cooperative testing of the barcode, the USPS has issued a final rule (see Federal Register of 4/30/2008) to implement the two forms of the IMB concept effective May 11, 2009, called Basic-Service and Full-Service.
This IMB and its associated requirements will be a significant change to the mailing process. RR Donnelley will be ready to support our customers with Full-Service IMB in May 2009.
We encourage you to learn more about IMB by visiting the USPS Web Site at
http://ribbs.usps.gov/
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