On December 22nd, the Postal Regulatory Commission officially approved the USPS Commercial Rate increase for January 21, 2024. As a reminder, rates for Market Dominant products are increasing at the same time, so prices for Priority Express, Priority Mail, First Class, Marketing Mail and Ground Advantage (Parcels) are all increasing.
On December 29th, the USPS filed with the Postal Regulatory Commission (PRC) their schedule for “regular and predictable rate adjustments” through 2026.
The schedule:
- January 21, 2024
- July 14, 2024 (to be filed with the PRC in April 2024)
- January & July both in 2025 and 2026
Also on December 29th, the USPS filed their annual compliance report with the PRC.
This report details what Market Dominant products are “paying for themselves” and allows a forecast of the July rate increases.
As you may remember, the January rate is based on the CPI index, but the July rate increase is made up of the CPI, the “Density Factor (lower volume = larger rate increase), and the “Retirement Factor” (making up deficiencies in retirement funding).
At this point, this is what the document indicates:
- CPI is currently at 1.3% (number will be finalized in April)
- Density factor at 4.312%
- Retirement factor at 1.82%
As a result, the current overall expected July 14, 2024 rate increase is 7.432%.
However, the devil is also in the details, and Marketing Mail Carrier Route, Marketing Mail Flats and Periodicals are not “covering their costs,” so those categories will likely have a 2% ADDITIONAL increase. There will be a clearer picture of the rate increase when the USPS files their rate case with the PRC this April.
