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06/03/2024

May Mailers Hub Summary

Source: Mailers Hub, May 23, ,2024

PRC Orders USPS to “Show Cause"

In an unprecedented example of the Postal Regulatory Commission’s frustration with how Postmaster General Louis DeJoy is unilaterally implementing his 10-Year Plan, the commission issued an order on April 26 as part of its docketed review of that Plan. In its filing, titled Order Directing Postal Service to Show Cause or File a Nature of Service Proceeding Regarding Certain Delivering For America Initiatives, the commission directed the Postal Service to explain why the collective actions taken to implement The Plan do not require the USPS to seek and advisory opinion from the PRC before proceeding.

Senators Urge USPS Governors to Slow Implementation

Anyone who watched the April 16 hearing before the Senate Homeland Security and Governmental Affairs Committee knows that there’s considerable attention being given to the ongoing implementation of Postmaster General Louis DeJoy’s 10-Year Plan. At the hearing, the PMG and Board of Governors chairman Ramon Martinez IV defended The Plan and argued that current problems will be resolved if more time is allowed to get The Plan fully in place. 

USPS Reports Another Loss for PQII

On May 9, the Postal Service filed its Form 10-Q for the second quarter of the 2024 fiscal year (January 1 – March 31, 2024). The reported figures reflected how the agency’s situation has changed since the same period the previous year. Despite continuing to increase prices every six months, the Postal Service has not seen anything resembling the additional revenue that it might have expected. 

Another Letter from US Senators Urges Pause in Network Changes

Postmaster General Louis DeJoy often shows his pique toward anyone or anything that he perceives is interfering or resisting the full-speed implementation of his 10-Year Plan. In speaking at a variety of venues, he’s regularly chided industry groups, the Postal Regulatory Commission, and politicians for defending the “status quo” rather than supporting his initiatives, notably steep price increases and wholesale changes to the USPS processing, transportation, and delivery networks.

DeJoy Concedes to Slowing Network Changes

After years of compliant support for Postmaster General Louis DeJoy’s 10-Year Plan, the growing outcry over decreasing service performance seems to have inspired a member of the Postal Service’s Board of Governors to offer a different opinion. Outsiders will never know whether that was a bold departure from the usual stilted consonance or a scripted preface to later events, but the coincidence is interesting.

USPS Files Limited Price Change for Competitive Products

On May 10, the Postal Service filed notice with the Postal Regulatory Commission of a price change for only one competitive product: Parcel Select. Generally speaking, the Postal Service’s Governors have the legal flexibility to adjust competitive product prices, with the Postal Regulatory Commission’s role limited to ensuring the prices meet the applicable legal requirements and contribute at least a minimum amount toward USPS institutional costs. 

USPS Board Chairman Blames Losses on Accounting Rules, not The Plan

Every month, quarter, and year, the Postal Service is required to report on its financial condition. The official quarterly report is on Form 10-Q, in which the USPS notes at the opening of its report, “The accompanying unaudited interim financial statements … have been prepared in accordance with GAAP for interim financial information … .”  GAAP is short for “Generally Accepted Accounting Principles in the US” that dictate how various revenue and cost items are to be calculated, recognized, and reported. Because of these accounting rules, the Postal Service is required to include both costs it can control and those it cannot in its periodic financial reports in such a way that, looking at the bottom line, the agency believes creates an inaccurate picture of its efforts to control expenses.

USPS Responds to PRC “Show Cause” Order

As would be expected, the Postal Service contends that the commission’s order “significantly encroaches on the Postal Service’s discretion and marks a serious departure from Commission precedent.” After pages of argument refuting the PRC’s right (or authority) to issue a “show cause” order, the Postal Service dangles the possibility for future advisory opinion requests.

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