Postal rate increase Jan. 21 likely to be about 2 percent

The official inflation factor used to file price increases under the current postal reform law of 2006, in which the National Newspaper Association was instrumental, is 1.9 percent for the 12-month average used by the Postal Regulatory Commission.
The U.S. Postal Service is likely to file an increase for this average percentage amount this month. Due to rounding and possibly other factors, such as an unused rate authority from prior cases, as well as competitive reasons, some categories within classes could be more, others less. Each class must average correctly to stay beneath the inflation cap.
For instance, the price for Saturation and High-Density “Marketing Mail,” a new terminology given Standard Mail last year, has been historically low as USPS tries to keep higher volumes of this mail flowing. Its cost coverage is high (revenue higher than costs) as calculated by USPS, whereas Periodicals mail is judged to only cover 75 percent of its costs. So, this price used by shoppers and free newspapers might go up less than 2 percent. We’ll just see where USPS places its emphasis.

USE STANDARD MAIL FOR MARKING BULK INDICIAS, FOR NOW
By the way, mailers should not change bulk rate indicias yet to say “Marketing Mail.” The mailing industry is still arguing with USPS, as some don’t want to use the new designation, which the Postal Service thinks more accurately explains the purpose of the advertising-content class. Nonprofits, among others, disagree. Final implementation has been postponed, and until details are worked out, NNA members should continue to use “Standard Mail” on permit indicia.
Reports are that increased discounts are likely to be granted mail entered at DDUs (delivery offices) by the mailer. That may well help Standard Mail and in-county Periodicals, both heavy users of this best practice.
The Postal Service has already announced an implementation date of Jan. 21, 2018, for the next round of price changes. The custom is to make a filing for permission from the PRC 90 days prior, which would be around Oct. 21.

TUB DISCOUNT NOT INCLUDED
NNA’s Postal Committee is deeply disappointed that a hoped-for discount for using more efficient Flats Trays (white tubs), available only for Periodicals mail, was not included. We had worked hard to convince the decision makers in postal headquarters that it was deserved, and NNA was on track for success. NNA has been seeking this discount for a decade, and the Postal Regulatory Commission has agreed it should be considered. But USPS cannot seem to keep it at the top of the pile.
Tonda Rush, Brad Hill and I have been particularly focused on this issue during our representation of NNA members at the quarterly Mailers Technical Advisory Committee meetings, annual National Postal Forum, and in briefings for association heads attended monthly where Rush is prominent among mailer leadership.
However, the lack of a robust board of governors took its toll. At the time the Postal Service board was down to one governor, who approved the inflationary filing. And now there are no governors, because Congress has failed to act on appointees from the past administration. 
The Trump Administration has appointed no one so far, so Congress could not consider confirmation of even one governor if it tried. USPS believes it lacks legal authority to implement new discounts without the backing of its board.
USPS has promised to put a line item on Postage Statement 3541 to track the use of tubs starting in 2018, with an eye toward providing a discount later—something NNA asked for in 2007. With the relatively small total volume of newspapers using tubs, it may not be an impressive number. But a small number isn’t necessarily bad. If we can persuade USPS more Periodicals mail would abandon sacks for tubs, we could prove to USPS that it could save money.
Although participation is good among newspapers after NNA’s promotion of this best practice since 2006, the magazine industry has largely spurned the use of Flats Trays since they are wedded to pallets, and then sacks for the “tail of the mail” that can’t be palletized.

UNLIDDED FLATS TRAYS SOUGHT
NNA’s Postal Committee has also been pushing for adoption of unlidded flats trays to make their use more palatable to printing/mailing plants, and likewise for many postal mail processing plants that can more readily recognize the time-sensitive contents.
A second test of their usage from a larger printer of newspapers in western Kentucky, with mail flows into both Nashville and Louisville, should help the Postal Service operations folks make a positive decision soon. Many postal plants and individual post offices have informally advised newspapers to prepare tubs without the green lids, which can allow them to be nested one inside the other on newspaper or printer delivery trucks, and on postal transportation to Hubs and processing plants.
All members of NNA who want to improve distant delivery times should adopt the use of flats trays and get out of sacks completely. Let me know at my email address below if you have any problems at any level with the adoption of tub use.

POSTAL REFORM BILL STILL BADLY NEEDED
NNA members and all mailers badly need passage of postal reform legislation, which is hung up in the House after coming out of committee with bipartisan support earlier this year. I encourage all members to run NNA President Matt Paxton’s guest editorial on service ASAP, if they haven’t done so already. And contact your representatives. The editorial can be found on NNA’s website at nnaweb.org.
Higher postage rates are extremely likely without legislation that frees some unneeded monies being diverted to the U.S. Treasury for no good reason. And another round of plant closures could occur.
This month we are also awaiting a PRC decision on whether to loosen the inflationary cap during a 10-year review of the 2006 major postal reform that introduced the cap. The Commissioners have promised a decision in October. © Max Heath 2017

Max Heath, NNA postal chair, is a postal consultant for Landmark Community Newspapers, LLC, and NNA members. He is sponsored by Interlink Software. Email maxheath@lcni.com.