USPS Aims to Change Peak Season Cost Computation

The Postal Service is looking to develop a new method for calculating how much it spends on peak season delivery. 

The agency already uses calculations for service costs — known as distribution keys — in its Transportation Cost System (TRACS). However, this proposal would represent the first peak season-specific distribution key, according to a Sept. 6 Federal Register notice. 

Currently, USPS calculates peak season in early September using data from the prior quarter. This method assumes that “peak season trips have a similar mail mix to regular transportation for the same quarter,” according to the notice. 

However, this assumption is not always true, as “peak season transportation is used to supplement the regular transportation network during peak season,” the agency explained. 

The Postal Service says adopting the new proposal, dubbed Proposal Six, would enable it to estimate peak contract costs more accurately. 

If implemented, Proposal Six could change the tenor of contract negotiations with the Postal Service. This goes double for contractors already under the CLEAR system, given that the Postal Service plans to separate peak season service from existing contracts.