USPS Conducts Exigent Rollback Survey
The United States Postal Service (USPS) has recently sent a survey to particular mail owners to obtain their feedback on how they would prefer the next price change to occur. As you may know, the PRC decision defined the exigent increase as a surcharge. That surcharge is to last only as long as it takes for the USPS to recoup about $3 billion in lost revenue due to the 2008 recession. The exigent surcharge is projected to only last until August/September 2015 (see our detailed article for more information). Furthermore, as our article states, the USPS will have the option to increase rates in January 2015 to account for CPI (around 1.5% currently) or they could wait and remove the surcharge and add CPI at the same time (August/September 2015); which would be a 4.3% exigent reduction and a 2-2.5% CPI increase. Finally, the survey includes one additional option; which is to have no rate increase in 2015 and change all rates in 2016.
Below is an exact list of options that are available in the survey:
- A price change in January 2015 (no exigent roll back)
- A price change in the summer with the exigent roll back
- No rate increase in 2015, A price change in January 2016
Our suggestion is one price change in 2015, (option #2) when the exigent revenue is recouped (August/September). That would consist of the exigent (4.3%) being rolled back which would constitute a decrease in prices, and then the CPI being added. CPI is currently about 1.56%, and is expected to be in the 2-2.5% range by the time the USPS would file for a price change. The net overall would then be no price increase for the first 8 or 9 months, and then a decrease in postage for the last quarter of calendar year 2015.
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