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NEW POSTAGE RATES EFFECTIVE MAY 12, 2008

The postal Rate Commission adopts a new procedure for establishling postage rates for all classes. Replacing the “Rate Case” regulations which have been in place since 1971, the new procedure (passed in October of 2007) will bring periodic “Price Adjustments” based on the Consumer Price Index.

 

The goal is to keep rate increases at or below the rate of inflation. The calculation is a simple average of the most recent 12 month Consumer Price Index percentages. The new law also provides for an annual cap which is calculated as the percentage difference between the two current and previous 12-month periods.

 

Increases which are less than the annual limitation results in an “unused rate adjustment authority” and can be used in futures rate adjustments; however the use of these carried over unused adjustments cannot result in an increase that exceeds the annual cap plus 2%.The “unused rate adjustment authority” expires 5 years after its computation. The cap calculation on 12/14/2007 was 2.7%

 

A 90 day notice of proposed adjustments will be provided by the Postal Rate Commission.

The result will be more frequent adjustments compared to the abandoned rate case approach, but each increase will be less significant and this new inflation based regulation should provide a more predictable basis for budgeting.

 

Caveat- It should be noted that the allowable percentage increase is an average that applies to an entire class and increases for individual rate categories within a class are not limited. You can continue to look for segments of mail within a class to be priced relative to the efficiency of the sort and entry point.

 

[click to download the printable rate charts] - PDF 98kb