The U.S. Postal Service filed a series of proposed price changes with the Postal Regulatory Commission today, which include price increases above the rate of inflation. Price increases at this level are only allowed under a 2006 Postal law if the Postal Service can demonstrate “exceptional or extraordinary circumstances.” The proposed changes also include two incentives intended to retain and grow profitable mail volume, such as bills and statements. The Postal Regulatory Commission must approve the suggested price changes and any increase would not go into effect until Jan. 2, 2011. The USPS may face a bigger battle than usual, however, when it comes to getting approval for the proposed increase. A coalition of mailers has formed the Affordable Mail Alliance to oppose the increase and to urge the PRC to find that the USPS has failed to demonstrate that it is facing the “exceptional or extraordinary circumstances” called for under the Postal Accountability and Enhancement Act of 2006.  Members of the new group include Direct Marketing Association, Arandell, IDEAlliance, InfoPrint Solutions, Printing Industries of America, Quad/Graphics, IWCO Direct and RR Donnelley. Here’s a quick rundown of what the USPS is asking for:

• A 2-cent increase in the price of a First-Class stamp to 46 cents
• A 2-cent  increase in the price of a postcard to 30 cents
• An 8% increase in mailing costs for periodicals, a 5.1% increase for catalogs, a 23% increase in for standard mail parcels and a 7% increase for media/library mail.
• The introduction of a Reply Rides Free incentive to encourage the use of bill and statement mailings for marketing messages. For qualifying customers, a 1.2-ounce piece will be charged the 1-ounce price if a reply envelope or card is included in the mailing
• The introduction of a Saturation Mail/High Density incentive program to provide rebates for volume growth for standard mail and nonprofit mail letters and flats.

The USPS estimates the proposed changes will generate $2.3 billion for the last three quarters of 2011 and an estimated $3 billion in 2012.  The USPS says it needs this money to close a projected $7 billion budget shortfall in 2011. The budget gap will occur despite the USPS’ efforts to eliminate work hours and reduce expenses, it said. Declining mail volumes as a result of the recession and increasing use of the Internet haven’t helped the USPS’ fiscal situation. The USPS is also proposing eliminating Saturday delivery as a way to cut costs. “These proposed rate adjustments are moderate and part of a fair and balanced approach to insuring mail service for all Americans well into the future,” said Postmaster General John E. Potter, in a statement. Complete details of the filing can be found later today at usps.com/prices.