Under the postal reform law passed in 2006, the Postal Service is entitled to increase its average rates by class annually by a percentage equal to the prior year's CPI increase. Given its precarious financial situation, the Postal Service will have no choice but to exercise that option, so we can expect the maximum permitted Periodicals increase every May for the foreseeable future. Therefore, each year's May increase will almost certainly be equal to the increase in the CPI for the 12 months ending in February of that year (when the increase is announced).
The wild card is whether individual rate elements, and therefore rates for individual publications, will increase by the average amount, as happened with the 2008 increase, or whether there will be significant variations from the average, as happened with the 2007 increase, the last under the old law. ABM's educated guess is that we will begin to see some variation beginning in 2009, with palletized, drop-shipped publications seeing below-average increases and others seeing above-average increases. With gasoline prices doing what they're doing, we understand that drop shipping (that is, the use of private transportation to transport the mail closer to its destination) has been of little value recently, because unlike the Postal Service, which is stuck with fixed rates, private truckers have been passing through fuel cost increases with surcharges. However, next year the Postal Service's rates will catch up with its transportation costs, and there ought to be large savings associated with drop shipping.