What is the latest postal rate news?
The anticipated summer postage rate increase will take effect on or about July 20. USPS rate authority is governed by a “rate cap,” which is ordinarily defined by pre-set parameters. This allows mailers to make reasonably good predictions of increases to come. The July increases will exceed those predictions due to the intervention of the Postal Regulatory Commission.
In mid-February 2025, the PRC granted a USPS request to, in effect, get a refund from all mailers for the revenue it “lost” due to mailers taking advantage of USPS promotional discounts. The July rates will include the predicted cap amounts plus an additional amount attributable to the PRC-approved “refund.”
The anticipated increases reported here are premised on USPS using all of its rate authority, which is its custom, and are as follows:
First Class +8.0% (expect an 80¢ stamp)
Marketing Mail Letters +11.6%
Marketing Mail Flats +13.6%
Periodicals +9.4%
TNPA’s Position Statement on Postal Service Reform
Many nonprofit organizations rely on mail-based communications and fundraising to fulfill their charitable missions. We advocate for four key principles in postal reform:
1. Predictability and Affordability
The nonprofit sector requires stable, predictable postal rates tied to economic indicators like the Consumer Price Index (CPI).
2. Recognition of Public Service Value
The nonprofit postal rate is not merely a discount – it represents a long-standing public policy recognition that nonprofit organizations provide essential services that benefit society. Any postal reform must preserve this vital distinction and ensure that rate structures support, rather than impede, the nonprofit sector’s ability to serve communities.
3. Balanced Approach to Financial Sustainability
Reform must balance operational efficiency, cost control, and reasonable rate structures.
4. Universal Service Through Last-Mile Optimization
The USPS’s unique mandate to serve every American household must be protected and enhanced through strategic investment in last-mile delivery systems. This infrastructure ensures national cohesion and equitable access to information and services, particularly in rural and remote communities.
We support a comprehensive review of the postal service structure that considers the essential role of nonprofit mailers in serving the public good. The future viability of both the postal service and the nonprofit sector depends on establishing a sustainable, predictable rate management system and ensuring reliable delivery to all Americans.
What is the current situation?
The Postal Regulatory Commission (PRC) granted the USPS a new rate authority in late 2020, allowing for hefty twice-annual increases like those in January and July 2024. The authority is an add-on to the previous system, which permitted increases only up to a ceiling determined by the annual consumer price index (CPI), a measure of inflation.
What does this mean for nonprofits?
The consequence of this new authority to increase rates has been accumulated increases between 15.7 and 19.6% in a mere 18-month period. The USPS will continue to have this authority for two or more years. When it has run its course, nonprofit mailers will have absorbed increases of up to 50-60% from start to finish.
How did we get here?
The 2006 Postal Reform Act limited price increases to a formula derived from the Consumer Price Index (CPI). Therefore, since 2006, aside from a small increase due to the Great Recession, postal rates have increased approximately at the rate of inflation, predictable as to both amount and timing.
Under the 2006 Act, the PRC was given the task of conducting a ten-year review of the law’s effectiveness. The PRC concluded that USPS’s poor financial health was due to the CPI cap, as opposed to a lack of operational efficiency or cost control. Therefore, it proposed a new formula, adopted in December 2020, which gave USPS new rate-making authority, permitting variable surcharges to be added to the CPI.
What can we do now?
TNPA strongly believes a long-term solution can only be found through structural reform of the USPS and its funding methods. The USPS cannot successfully be run as a business while incorporating substantial and obligatory public service missions into its operations. The ideal policy for the nonprofit sector—and all mailers—would be a return to the original goals of the Postal Reform Act of 2006: predictable rate increases in line with the rate of inflation.
Collectively, mailers took a logical first step. In late 2020, a coalition of mailers’ associations sued the PRC, asserting that it did not have the authority to raise rates above the 2006 Act’s CPI cap. TNPA contributed to this effort. In November 2021, the US Court of Appeals (DC Circuit) ruled against the mailers’ suit. The court ruled that the PRC acted within its authority, thus allowing the large rate increases beyond the CPI to continue.
With this disappointing court decision, the focus moved to Capitol Hill. H.R. 3076, the Postal Reform Act of 2022, passed the House in May 2021 and was working its way through the Senate. In March 2022, the Senate passed the bill without amending it to include pricing caps, and in April 2022, President Biden signed the measure into law.
While the legislation has several positive provisions, including shifting the large postal retiree healthcare cost off the Postal Service and to Medicare, where most retiree healthcare costs reside, it does not contain any language limiting future postal rate increases.
Our challenge now is to gain the enactment of legislation that would force the PRC to do a new, second study of the postal rate structure, taking into account the USPS’s freeing of the large retiree healthcare cost. It will be no easy task to enact this legislation, but a bipartisan group of seven Senators seems ready to push forward on this effort. Even if legislation mandating a new postal rate study were enacted, there is no guarantee that the PRC will conclude that the pricing structure should be fundamentally changed.
TNPA is part of Keep US Posted, an important coalition committed to a reliable, affordable USPS.
Read More…
October 8, 2024 | Nonprofit Mailers Cautiously Laud Postage Increase Pause (The NonProfit Times)
July 9, 2024 | Filing of The Nonprofit Alliance before the Postal Regulatory Commission
Overview of USPS Volume Incentives for 2024
To understand the various Classes of USPS mail and more, check out USPS’s Business Mail 101
July 2022 | Congress just delivered major postal reform legislation, so why is the US Postal Service ignoring it? By: Kevin Yoder, Former Congressman and Executive Director of Keep US Posted
June 2021 | My (Virtual) Day on the Hill By: Sandra Miao
September 2020 | A Perfect Storm for USPS