Get Ready for Roller-Coaster Postage Rates
A court order Friday will probably mean higher postage costs than expected for publishers next year. But postage rates might actually decrease for a brief period this summer before rising again.
Welcome to what might become known as The Season of Roller Coast Postal Rates.
We knew going into 2015 that this would be a strange year for postal rates (See D. Eadward Tree's 2015 Postal & Paper Price Forecast), but Friday's court ruling could make it even weirder than the old crystal ball told us.
Postal rates for most mail -- including the periodicals, standard, and first classes -- usually undergo a predictable annual adjustment based on changes in the rate of inflation. But three events make 2015 different:
- May 31st price change: This year's inflation-based adjustment included a host of rate restructurings and rules revisions that had mailers a bit baffled at first. What has become increasingly clear is that the impact of the complex changes varied widely from publisher to publisher.
- Surcharge expiration: Any day now, the U.S. Postal Service is likely to announce that the 4.3% "exigent" surcharge will expire 45 days later.
- Court ruling: A federal appeals court muddied the water on Friday by ruling that the surcharge was valid but was insufficient to compensate the USPS for its losses from the recent recession.
Let's take a closer look at each of these developments:
May 31st Rate Change
The headlines said that prices of most types of business postage, including the periodicals class, rose 1.9% on May 31st. They were wrong. That was the average rate hike. The rate structure was rejiggered so greatly that some publications are reporting large increases, while others are actually paying less.
The hardest hit were lightweight publications that contain little or no advertising. That was one reason advertising-free Consumer Reports decided to shut down two newsletters, one of which faced a postal hike of nearly 14%, according to The Chronicle of Philanthropy.