USPS rewarded for poor service as rates rise, mail volumes fall and service declines

Tonda Rush

Oct 1, 2021

The Postal Service is being rewarded for poor service through the Postal Regulatory Commission’s new rate-setting authority, a coalition of mailer organizations led by the National Postal Policy Council told the U.S. Court of Appeals for the D.C. Circuit in September.

NNA, News Media Alliance and others are fighting postage rate increases that allow USPS to raise rates as mail volumes fall and service declines. The more mail that leaves the system because of service failures, the higher the cost to handle each mail piece becomes. The PRC now allows USPS to charge extra for the shrinkage. Counsel Ayesha Khan of Potomac Law Group argued for the mailers’ coalitions that the PRC had violated the Postal Accountability and Enhancement Act by allowing the postage price cap that was in effect from 2007 to 2021 to be superseded. The cap is just one part of the calculation of postage rates now, allowing USPS to begin by charging for inflation and then adding on charges for other cost drivers. USPS also has sued the PRC, arguing that it should have been allowed to do a one-time rate ‘reset’ to collect for money lost during the price cap period. The Court is expected to rule this fall.