PRC Weighs New Limits on USPS Price Hikes

A USPS oversight board is looking to rein in cost increases for some products by generally limiting USPS to one increase per year for the next five years.

The Postal Regulatory Commission (PRC) noted that public commenters have expressed “their concerns about the frequency of market dominant rate adjustments” implemented by USPS over the past five years. To counteract that, the PRC proposed new restrictions in a June 13 Federal Register notice.

Under this proposal, USPS would be limited to no more than one price adjustment of general applicability for market dominant products “per fiscal year from October 1, 2025, through October 1, 2030, unless such rate adjustment filings only include rate decreases or are de minimis [minimal] increases.”

The intent is to “address the observed weaknesses” in the current rate-change process, which was implemented in 2020 to “create predictability and stability in rates” and to “reduce the administrative burden and increase the transparency of the ratemaking process.”

The notice also addresses USPS’s “approach to setting workshare discounts under the Modified Ratemaking System,” with the commission proposing to remove a regulatory gap that “inadvertently permits the Postal Service to reduce workshare discounts with excessive passthroughs.”

Because workshare discounts are intended to be paired with avoidable costs of the workshare activity, some commenters expressed concern that this regulatory gap frustrates the point of the discounts. To address the issue, the PRC is proposing an amendment “to ensure that workshare discounts remain as close to avoided costs as possible.”

In response to the notice, USPS called on the PRC to publish the data analysis from which the proposal stems, noting that “commenters deserve to evaluate and comment upon the express factual underpinning for the commission’s proposed rule.”