Top 10 Postal Stories of 2016

Out with the old; in with the new. It's a common saying at the start of the New Year. In the postal world, however, some old things go out at the end of the year, only to return again in the New Year, like postal reform.

And, of course, some things never go away completely, which is a good thing. For example, we continue to get mail delivery to our doors at least 6 days a week no matter what is happening with the U.S. Postal Service's financial condition.

 

Between a Rock and a Hard Place

When it comes to postal products that don’t cover their costs, the U.S. Postal Service finds itself in a no-win situation. The law that governs the U.S. Postal Service, the Postal Accountability and Enhancement Act (PAEA), requires the Postal Service to make sure all products cover their direct costs. But it also caps the price increase on market-dominant mail classes at the increase in inflation.

 

Deep Cuts

No pain no gain. The U.S. Postal Service has reduced spending over the past decade but it has come with a downside, notably a reduction in service. Over the past decade the Postal Service has reduced labor costs by $10 billion, improved productivity, and generally reined in spending.

 

Is the Price Right?

The Postal Accountability and Enhancement Act of 2006 (PAEA) ushered in a new regulatory structure for the U.S. Postal Service. One key element was a price cap on market dominant products. (Most of the Postal Service's products are market dominant.) This means that price increases for market dominant products are capped by the rate of inflation as measured by the Consumer Price Index (CPI).