USPS Should Charge More Where It Can, Report Says

Packages wait to be sorted in a Post Office Packages wait to be sorted in a Post Office David Goldman/AP

The U.S. Postal Service should make better use of the pricing flexibility it already has to compensate for declining mail volumes, according to the Postal Regulatory Commission.

PRC released its Annual Compliance Determination Thursday, evaluating USPS’ pricing and performance. While the Postal Service has neglected opportunities to grow revenue, the report found, it is largely in compliance with legislative policies and has improved its service.

There is “untapped potential” in USPS’ ability to set its own prices to deliver certain products, such as periodicals, the report said. While the Postal Service is generally handcuffed by PRC oversight and inflation-based price caps, it maintains some pricing flexibility through the discounts it offers. 

“The informed and rational use of that pricing flexibility is an essential component of any long-term strategy to restore the Postal Service to profitability,” PRC wrote in its report. “The Postal Service must use its pricing flexibility to adjust prices for loss making products or risk the long-term sustainability of the postal system.”

The mail delivery agency offers “workshare discounts” in the form of reduced postage rates for companies that presort, pre-barcode, handle or transport mail. USPS has maintained its pricing structure and worksharing levels since 2007. The Postal Service lost $528 million in 2012 periodical operating revenue.

PRC found 16 instances in which workshare discounts exceeded USPS’ cost savings and the oversight agency advised the Postal Service to align the markdowns or explain the discrepancy. It made no new recommendations for Standard Mail Flats, saying USPS should continue with its three-year schedule of “above-average price increases and operational changes” to reduce costs.

The Postal Service met its performance targets for its standard and first-class mail, its flagship services. While it did not meet its targets for its other major products, it showed marked improvement, PRC said.

The commission said its report should help lawmakers draft a legislative overhaul of the Postal Service. Congressional lawmakers have said they are close to striking a bipartisan deal to reform the agency.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.