02/05/2025
January Mailers Hub Summary
Source: Mailers Hub, January 29, 2025
USPS Filing #1: the Annual Compliance Report
The United States Postal Service (USPS) filed its Annual Compliance Report (ACR) for Fiscal Year 2024 on December 30, detailing its financial performance, cost coverage, and service metrics for the year. The report, required by statute, aims to demonstrate compliance with Title 39 by providing data on costs, revenues, rates, and service quality. While the USPS frames the results as a testament to the success of Postmaster General Louis DeJoy’s 10-Year Plan, a deeper analysis reveals a more complex picture. The report highlights financial improvements, including a reduction in work hours and an adjusted net loss of $1.8 billion, but also acknowledges ongoing challenges in cost coverage for certain mail classes and service performance. Despite claims of operational efficiency, the USPS fell short of its ambitious service targets, prompting concerns about the agency’s prioritization of cost-cutting over reliability. The Postal Regulatory Commission (PRC) will now review the ACR and issue its findings, potentially challenging the USPS’s optimistic narrative and assessing whether its reported improvements align with actual service outcomes.
July Price Increase Moving Above 7%
Ratepayers who welcomed a temporary reprieve from postal rate hikes in January will soon face a significant increase in July. This upcoming adjustment will not only be influenced by the Consumer Price Index (CPI) but also by additional rate authorities granted by the Postal Regulatory Commission (PRC) in 2020. The CPI-based pricing system, established in 2006, was originally designed to provide the Postal Service with sustainable revenue, but prefunding retiree costs quickly strained its financial stability. In response, the PRC introduced three additional rate authorities—addressing volume declines, retiree expenses, and underperforming mail classes—which will contribute to the July increase. Based on current calculations, ratepayers can expect an overall market-dominant price increase of approximately 7.37%, with Periodicals facing an even steeper rise of around 9.37%. While the Postal Service has discretion in applying these rate changes, the aggressive revenue-seeking approach under Postmaster General Louis DeJoy leaves little room for relief.
The Rumor Mill: Is DeJoy Out?
Speculation is mounting in Washington over the future of Postmaster General Louis DeJoy, despite his lack of visible concern during a recent Mailers Technical Advisory Committee meeting. While only the Postal Service’s Board of Governors has the authority to remove a postmaster general—not the president—the board currently has several vacancies, creating an opportunity for a shift in leadership. DeJoy, originally appointed under the previous administration, has faced political scrutiny over his role in mail-in voting and policy decisions, leading to rumors that the new administration may seek his replacement. However, any changes would require Senate-confirmed appointments to the board, making an immediate shake-up unlikely. Even if DeJoy is removed, there is no certainty that his successor will be selected based on merit rather than political connections.
USPS Opens More S&DCs
The Postal Service announced the opening of twelve new sorting and delivery centers (S&DCs) on January 13, along with the expansion of delivery areas for existing centers. According to the agency, commercial customers should direct drop shipments to the appropriate S&DC based on destination ZIP codes. The Postal Service emphasized that these changes will not result in Post Office closures or affect retail services or PO Box deliveries for customers.
Pony Up, USPS
The new Congress has wasted no time in taking aim at the Postal Service. On January 15, Rep. Sam Graves (MO-6) introduced HR 431, the Pony Up Act, which would require the USPS to reimburse customers for late fees incurred due to delayed mail delivery. Co-sponsored by six other lawmakers, the bill mirrors a previous, unsuccessful attempt from 2024. Graves and his colleagues have repeatedly criticized the Postal Service for service delays and price hikes, with some, like Sen. Josh Hawley, vowing to dismantle Postmaster General Louis DeJoy’s 10-year plan. The bill has been referred to the House Oversight Committee, leaving its fate uncertain.
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