YOU AIN'T SEEN NUTHIN' YET

The following is a perspective by postal commentator Gene Del Polito for Direct magazine. The views expressed are solely the author's.

Earlier this year, the U.S. Postal Service (USPS) filed with the Postal Rate Commission (PRC) a request for new higher postal rates. The Postmaster General is on record saying that the USPS is asking for a simple, 5.4% across-the-board rate increase. This, he said, was raise the money the USPS will need to make a $3.1 billion escrow payment that Congress mandated in P.L. 108-18. If you take a look at the USPS' actual filing, you'll easily discover that the PMG was as good as his word about the "across-the-board" thing. And, since, Congress leaves him few options, an escrow payment will have to be made, so rates, it would seem, are going to rise.

The USPS is hoping this request will be received by its various constituents without a great deal of weeping and grinding of teeth. That is, "the USPS needs the money. The manner in which it seeks to raise that money is fair. So, please, if it's possible, let's move this case to settlement and forgo the usual litigation."

In many respects, this case lacks many of the controversial elements that have been previous rate cases particularly contentious. But if R2005 is simple, you "ain't seen nuthin'" until you get a gander at what R2006 will be like.

Yes, that's right, the Postal Service will be filing another rate increase request about this time next year with an eye toward implementing it in the early part of 2007. That case promises to be "the mother of all rate cases."

In R2005, the USPS has put off (for the sake of expediency) any effort to redefine the relationships that exist within and among the various classes. These kinds of costing, pricing, and rate design issues, however, are sure to surface in a very big way in R2006.

It would be kind of nice to have R2005 put quietly to bed, because our industry will have more than its fair share of work to get ready for R2006. Here is the time when "postal transparency" will be needed the most. What does the USPS intend to do in R2006? What must mailers do to prepare for the changes coming from R2006?

Let's hope we don't have to wait until the case is actually filed to begin getting the information we need.