You might see some news bits this week about how USPS is broke and could be closing down any day now. Don’t believe the hype! This is a manufactured scare, designed to get Congress to relieve USPS of some draconian retirement payments. USPS CFO Joe Corbett has said point blank that they will NOT shut down. They’ll likely just stop pre-payment to their retirement fund, and carry about business as usual. And Congress wouldn’t let the mail stop flowing anyway, there are just some who want to use this time to combat the postal unions. You’ll hear the word “bailout” from some politicians – what USPS is proposing is actually a refund of retirement overpayments.

Here’s a few great blogs about this topic:

Postal Panic – Don’t Get Sucked In

New York Times buys in to the postal shell game

Unfortunately the media have latched on to a few incorrect and incomplete sound bites, and they are circulating like wildfire. Contrary to a TV news spot I watched last night, advertising mail is increasing. There will be more publicity around this for the next few weeks, or until Congress passes a plan to right the postal ship.

Nothing to see here, move along.

direct mail · PAEA · PRC · USPS

On July 5, 2010, USPS proposed a change in prices to the Postal Regulatory Commission (PRC). If approved, prices will go up an average of 5.6% on January 2, 2011. Here’s what you need to know about this proposal.

Price History

In 2006, Congress passed the Postal Accountability and Enhancement Act, or PAEA. With this act, methods for handling postal prices were fully outlined. It allows USPS to raise prices annually and in line with the Consumer Price Index or CPI. Prices were increased in 2007, 2008 and 2009, and each increase was less than the CPI “cap” for the previous year. In 2010, the CPI cap was negative, and no increase was applied. The projected cap for 2011 is also negative, but USPS is losing money.

A provision of PAEA allows USPS to raise prices in emergency circumstances. There is no limit to the increase that is allowed in this case, however the PRC must approve of the increase before it is enacted. The increase proposed for January 2011 was filed under this exception.

Proposed Changes

While the average price increase is 5.6%, the amount applied to different sort types varies widely. The increase for Standard Mail Parcels, for example, is over 23%. The Not Flat-Machinable category would be eliminated. Pieces currently sorted in this category will be considered Standard Mail parcels. The Standard Mail parcel category would get several sub-categories, for Marketing and Fulfillment, and also regular and nonprofit parcels.

Additionally, the Move Update requirement for First Class and Standard Mail will have a reduced threshold for tolerance: 75%. If you are not already processing your mail through NCOALink, contact Satori Software for more information about this requirement.

Several other, minor changes were included in this proposal as well, including incentives for mailing Full-Service First Class letters with a reply card and Saturation/High Density mail. To read the full list of changes, visit:
http://pe.usps.gov/FederalRegisterNotices.asp

What’s Next

Now that USPS has made their proposal, the PRC has until October 4^th to evaluate it. They will determine whether the changes proposed are reasonable, and whether USPS has made their case for filing an exigent (emergency) price increase. If the PRC approves the changes, the new prices will be effective at 12:01 am on Sunday, January 2, 2011.

If you use Satori Software products to sort your mail, install your normal December/January update when you receive it, and the correct prices will be applied based on the Mailing date you select.

What You Can Do

First, read the USPS proposal. You can view the complete Federal Register at:
http://pe.usps.gov/FederalRegisterNotices.asp

Also, view the pricing tables at:
http://pe.usps.gov/prices/Prices_Jan2011.xls

Next, contact USPS and PRC to let them know how this change will affect you.

To contact the PRC:

• Go to http://www.prc.gov/.
• Click “Contact PRC” in the upper right corner.
• On the contact form, select “Mail Delivery/Postal Services” and enter your message.

To contact USPS:

• Send a letter to Manager, Mailing Standards, US Postal Service, 475 L’Enfant Plaza SW Room 4446, Washington DC 20260-4446.
• Send an email to MailingStandards@usps.gov with the subject line “January 2011 Domestic Mailing Standards Proposal”.
• Write a comment for the USPS Office of Inspector General at http://blog.uspsoig.gov/?p=3621.

move update · PAEA · prices · USPS

While the Postmaster General and Congress debate the fiscal future of USPS, other communication from the Postal Service has been quiet. What’s going on behind those closed doors?

Required SOX compliance

Part of the Postal Accountability and Enforcement Act (PAEA) of 2006 requires that USPS be compliant with Sarbanes-Oxley section 404 by the end of the 2010 fiscal year. This means that by the end of September, the Postal Service must have its internal accounting ducks in a row.

What SOX means for mailers

In theory, SOX section 404 only describes the internal accounting measures the USPS must apply. However, some acceptance facilities incorrectly interpreted the new rule, and started applying SOX regulations to mailers’ paperwork as well. Fortunately most of those misinterpretations have been corrected. Mailers can continue to process their mailings as they have in the past. However, any manual corrections to the printed paperwork should follow standard accounting procedures. This means drawing a single line through the incorrect information, writing in the correct value, and initialing the change. However this does not apply to Form 8125 for drop ship mailings – the 8125 must be submitted without any manual corrections.

In order to get their financial house in order, USPS has enacted a “change freeze”. This means that sorting rules, prices, and other regulations will not change until the freeze is over, likely in October. With the current state of USPS, expect a big list of changes to be announced as fall approaches.

PAEA · SOX · USPS