Commentary & Analysis
In the Mail: February 2018 - What You Need to Know About Postal Issues
Industry experts review effects of proposed Postal Regulatory Commission Rate Hike Plan. The USPS finalizes mail preparation changes, delays Move Update assessment fees, ends support for non-secure FTP for IV-MTR, and bids farewell to RIBBS.
Published: February 22, 2018
Change & Consequences
Four industry experts outlined the details and some of the consequences of the Postal Regulatory Commission’s (PRC) proposal to change the CPI-cap-based rate system under which the U.S. Postal Service now operates. Steve Colella, Vice President, Postal Affairs, The Calmark Group; Rose Flanagan, Manager, Postal Strategies and Logistics, Data-Mail; Tom Glassman, Director of Data Services & Postal Affairs, Wilen Direct; and Paula Stoskopf, head of Postal Affairs for LSC Communications and Fairrington Transportation, participated in a January Idealliance webinar.
They noted that this rate proposal would give the Postal Service authority to raise rates by 2% above the CPI for each market-dominant rate class for five years, with another 1% for capital improvements that would be granted if the USPS adheres to its service standards and meets certain operational standards that have yet to be outlined. The plan, which is widely rejected by the postal industry, would also require gradual increases in “underwater” products that do not cover all their attributable costs.
Furthermore, the PRC saw that some workshare discounts were far greater than 100% of the cost avoided by the USPS, so it proposed a band approach for three years during which Periodicals must be within 75%-125% of the cost avoided and all other products must be within 85%-115% of the cost avoided.
According to the PRC’s estimates, which assume a conservative CPI of 2%, the projected five-year price increases would raise First-Class single piece, presort, and Marketing Mail letter rates by more than 27% and Periodicals and Marketing Mail flats by more than 40%.
The PRC argues that the change in rate structure is needed for financial stability, citing the Postal Service’s $59.113 billion loss. But Flanagan argued these increases are not needed because $54.8 billion of the loss was due solely to the requirement that the USPS prefund its financially healthy retiree health plan. The PRC doesn't have the authority to change the requirement; only Congress has.
Idealliance is encouraging members of the industry to express their opposition to the proposal to the PRC by March 1.
On January 25, the PRC issued a final Rule on Motions Concerning Mail Preparation Changes, which follows the agency’s earlier rulemaking that articulated a standard for when mail preparation changes lead to deletion or redefinition of rate cells under the price cap rules.
The January 25 rule directs the USPS to identify and use a single source to publish changes in mail preparation requirements and to tell the PRC what this source will be. Further, the USPS must affirmatively state in the single source whether a mail preparation change requires compliance with price cap rules. The new regulation also sets a threshold for the USPS to demonstrate “by a preponderance of the evidence” when it does not think a mail preparation change requires compliance with the price cap rules.
The U.S. Postal Service on February 12th announced that the new fees it will begin charging mailers for failure to fully comply with Move Update rules will be delayed until April 2018. The Postal Service provided the following information on the delay on the method for measuring Move Update compliance:
After January 2018, USPS began changing the method for measuring Move Update compliance to a census-based approach. The Census Method utilizes Mail Processing scans to determine compliance. Results from the census verification method are displayed on the Electronic Verification tab of the Mailer Scorecard. As a reminder, mailers have been encouraged to review their Move Update compliance since May 2017 after the reports were tested, validated, and declared ready for use by an Industry Task Team.
On January 9, USPS filed a proposed Federal Register Notice (FRN) to introduce the new Green & Secure Alternative Move Update Method. The Green and Secure alternative method aims to reduce the handling cost of undeliverable-as-addressed (UAA) mail by minimizing volume of return-to-sender mail. For Mailers participating in Green & Secure Alternative Method, qualifying UAA mailpieces bearing an ACS Change Service Requested STID (First-Class Mail and USPS Marketing Mail) or a Secure Destruction STID (First-Class Mail only) will be displayed as warnings and not be included in the error threshold.
To allow the Industry additional time to respond to the proposed FRN and enroll in Green & Secure the USPS has delayed the Move Update Census assessments until April 2018. Census-based assessments will commence in April 2018, based on March data, for mailpieces determined to be over the established threshold for the calendar month. Mailers are encouraged to review their results to ensure compliance with Move Update standards.
USPS will continue to host weekly Move Update calls for mailers who have questions or want additional
information. Dial in at 1-855-860-7461. Conference Code is 563 772 2130.
FTP Support Ends in Informed Visibility
Support for non-secure file transfer protocol (FTP) in the Informed Visibility® Mail Tracking & Reporting (IV®-MTR) application has been discontinued. The USPS had extended the deadline for IV-MTR customers to convert to a secure transfer method (e.g., Secure FTP) until January 31. On January 27, the option to choose FTP as a data transfer method was removed from the IV-MTR web application, preventing “new” FTP selections within the application.
On January 31 at approximately 9:00 ET, the IV-MTR application modified each remaining FTP feed to be accessible manually via Online Download within the web app. The collection of scan data for each FTP feed that was modified to Online Download will continue, and mailers will be able to access their data through either Online Download or by selecting an available Secure FTP server. This approach ensures no data will be lost but will be available only through a secure method.
Instructions are provided in the Actions for Transitioning to a Secure Transfer Method document (https://postalpro.usps.com/informedvisibility/transitionsecuremethod) and IV PostalPro webpage (https://postalpro.usps.com/visibility-and-tracking/informed-visibility-iv). For additional assistance, contact the IV-MTR Help Desk at 1-800-238-3150, Option #2, or InformedVisibility@usps.gov.
The USPS discontinued posting and updating information to the Rapid Information Bulletin Board System (RIBBS) website in November 2017. In order to prevent outdated and obsolete documents from being made public, RIBBS no longer hosts content, but provides links to the various pages on PostalPro (https://postalpro.usps.com/), which has fully replaced RIBBS. Questions? Call the PostalOne! help desk at (800) 522-9085.
Delivery Notice/Reminder Receipt Renamed & Redesigned
The Postal Service has renamed and redesigned one of its most used forms: PS Form 3849, Delivery Notice/Reminder Receipt. On January 21, the new name of the form became “We ReDeliver for You!” The revisions provide more detailed information to customers regarding delivery attempts. The form comes in different colors—peach for Monday through Saturday deliveries and yellow for Sunday—and contains a Quick Response (QR) Code, a new option that simplifies scheduling redelivery for customers with smart devices. Users can scan the QR Code using an Android or iOS device to access the https://redelivery.usps.com/redelivery/#reloaded website and select a redelivery date for the item.