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PRC Fiscal Year 2024 Budget Justification On September 6, the Postal Regulatory Commission released its Fiscal Year 2024 Budget Justification to the Postal Service Board of Governors.  Last week, the Commission submitted a revised budget request of $22.613 million for FY 2024 to the Postal Service Governors. The Commission submitted this revised request in response to correspondence and discussions with the Governors regarding the initial budget request of $23.399 million.  The initial request sought to fund increases to fixed costs, including inflationary adjustments to wages and benefits, lease payments, and the addition of 5 full-time equivalent employees. The revised request only covers increases to the Commission’s fixed costs for FY 2024 and does not fund increased capacity in FY 2024.

USPS Reports Third Quarter Financial Results On August 8th, The U.S. Postal Service announced its financial results for the third quarter of fiscal year 2023 (April 1, 2023 - June 30, 2023). On a generally accepted accounting principles (GAAP) basis, net loss for the quarter totaled $1.7 billion, compared to net income of $59.7 billion for the same quarter last year, due almost exclusively to the non-cash impact of the Postal Service Reform Act (PSRA) in April 2022. On a non-GAAP basis adjusted loss was $860 million, compared to adjusted loss of $459 million for the same quarter last year. Total operating revenue was $18.6 billion for the quarter, a decrease of $168 million, or 0.9 percent, compared to the same quarter last year. First-Class Mail revenue increased $221 million, or 4.0 percent, on a volume decline of 678 million pieces, or 5.9 percent, compared to the same quarter last year. Shipping and Packages revenue remained relatively flat while volume declined 41 million pieces, or 2.4 percent, compared to the same quarter last year.

PRC Analyzes USPS FY 2022 Performance Report and FY 2023 Performance Plan  On June 28, the Postal Regulatory Commission issued its analysis of the United States Postal Service Fiscal Year (FY) 2022 Annual Performance Report and FY 2023 Performance Plan.  Overall, the Commission’s report provides an in-depth analysis and several recommendations regarding each of the Postal Service’s four performance goals. The Commission finds that: the Postal Service partially met the High-Quality Service performance goal and in FY 2022, the Postal Service failed to meet its target for Single-Piece First-Class Mail, 3-5-Day; partially met the Excellent Customer Experience performance goal; partially met the Safe Workplace and Engaged Workforce performance goal and met the Financial Health performance goal because the FY 2022 Controllable Income (Loss) result was better than the target.

PRC Approves July Rate Increase On May 31, the Postal Regulatory Commission approved the new market dominant rates proposed by the Postal Service, taking effect on July 9. In approving the new rates, the PRC expressed serious concerns regarding computational mistakes in the Postal Service’s original filing. The regulator also shared concerns expressed by a number of commenters – including PostCom – that the frequency of rate increases may be a factor in errors and deficient documentation. To address these concerns, the PRC Order includes a requirement that the Postal Service report on the factors that contributed to its flawed presentation of rates. That report is due on July 31.

A Next-Generation Proactive Postal Regulatory System  On May 22, a white paper was released by the Consumer Postal Council the is intended to be central for the start of in-depth public policy discussions about the future of the Postal Regulatory Commission. Contributors of the white paper include:

  • Michael Kubayanda, Chairman of the Postal Regulatory Commission;
  • Former Congressman Tom Davis, who chaired the U.S. House of Representatives Committee on Oversight and Government Reform, with jurisdiction over USPS and the PRC; and
  • Dave Williams, former USPS Inspector General and a former member of the USPS Board of Governors.

House Oversight Committee Holds Hearing On May 17th, the House Subcommittee on Government Operations and the Federal Workforce held a hearing titled “Tracking the Postal Service: An Update on the Delivering for America Plan” to receive updates from United States Postmaster General Louis DeJoy on the United States Postal Service’s finances, performance, and efforts to modernize. Oversight Committee members asked for updates and brought transparency to the Postal Service’s ongoing improvements to ensure that it continues to efficiently serve the American people. 

PRC Releases Report and Dashboard Analyzing Postal Service’s FY 2022 Finances  On May 17th, the Postal Regulatory Commission released its Financial Analysis report, an in-depth evaluation of the overall financial position of the United States Postal Service in Fiscal Year (FY) 2022. With this year’s Financial Analysis report, the Commission introduces a fully accessible Financial Report Dashboard with downloadable data that provides a visual snapshot of key components of its analysis, including balance sheet and mail volume trends from 2007 to 2022. 

USPS Postal Inspection Service Roll Out Expanded Crime Prevention Measures On May 12, the United States Postal Service (Postal Service) and United States Postal Inspection Service (Postal Inspection Service) announced expanded actions to protect Postal employees and the security of the nation’s mail and packages as threats and attacks on letter carriers and mail fraud incidents have escalated concurrently with a national rise in crime. Incidents of letter carrier robberies are on the rise across the nation. In FY22, 412 USPS letter carriers were robbed on the job. With 305 incidents reported in the first half of FY23, these incidents are increasingly more prevalent. Expanded Project Safe Delivery actions include: Reducing Letter Carrier Robberies and Mail Theft, Preventing Change of Address Fraud and Defeating counterfeit postage.

USPS Announces New Product - Ground Advantage  On May 10th, the U.S. Postal Service proposed pricing for its new product offering, USPS Ground Advantage. Pending favorable review and comments from the Postal Regulatory Commission (PRC), USPS Ground Advantage would launch on July 9. USPS Ground Advantage will feature: 

  • $100 insurance included for both retail and commercial customers, 
  • USPS Ground Advantage outbound and return parcels, and 
  • Package forwarding and return to sender endorsements will be included for the USPS Ground Advantage product offering and free package pickup on the carrier’s route.

Published prices for USPS Ground Advantage will decrease 1.4 percent relative to current Parcel Select Ground and First-Class Package Service pricing. USPS Ground Advantage Retail prices will decrease 3.2 percent and USPS Ground Advantage Commercial published prices will decrease 0.7 percent.

U.S. Postal Service Reports Second Quarter Fiscal Year 2023 Results On May 9th, the USPS reported their financial results for the second quarter of fiscal year 2023 (Jan. 1, 2023 - Mar. 31, 2023). On a generally accepted accounting principles (GAAP) basis net loss for the quarter totaled $2.5 billion, an increase in net loss of $1.8 billion, compared to a net loss of $639 million for the same quarter last year. On a non-GAAP basis, adjusted loss was $498 million, compared to adjusted income of $427 million for the same quarter last year. Total operating revenue was $19.3 billion for the quarter, a decrease of $484 million, or 2.4 percent, compared to the same quarter last year.

PRC Initiates Public Inquiry Proceeding to Gather Information on Changes to the Postal Network On April 20th, the Postal Regulatory Commission announced it established Public Inquiry Docket No. PI2023-4 (PI2023-4) to provide a forum to gather information, provide transparency, and learn more about the Postal Service’s Delivering for America strategic initiatives that may have a significant impact on the postal community. Interested parties who wish to propose questions regarding the planned initiatives associated with the Postal Service’s Strategic Plan, may do so via Docket PI2023-4 by filing motions seeking information requests following the procedures of 39 CFR part 3010.170(e).

USPS Files for Price Increase Effective July 9, 2023.  On April 10th, the United States Postal Service filed notice with the Postal Regulatory Commission (PRC) of mailing services price changes to take effect July 9, 2023. If favorably reviewed by the Commission, the proposed increases will raise First-Class Mail prices approximately 5.4 percent to offset the rise in inflation. The price for 1-ounce metered mail will increase to 63 cents, and the price to send a domestic postcard will increase to 51 cents. A 1-ounce letter mailed to another country would increase to $1.50. There will be no change to the single-piece letter and flat additional-ounce price, which remains at 24 cents. The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.  The price changes have been approved by the Governors of the U.S. Postal Service.

PRC Releases the FY 2022 ACD. On March 29, the Postal Regulatory Commission released the Annual Compliance Determination for Fiscal Year 2022, assessing the Postal Service’s compliance with rates and service performance. The Commission is required to issue its Determination 90 days after the filing of the Postal Service’s Annual Compliance Report (ACR) (39 U.S.C. Section 3653). This review reflects the new pricing rules for Market Dominant products adopted in FY 2021, including rate authority mechanisms and new requirements for workshare discounts and non-compensatory products.   Some of the findings included: 

  • 21 workshare discounts passed through more than 100 percent of avoided costs, and 39 workshare discounts passed through less than 85 percent of avoided costs.
  • Cost of Periodical products have risen in the long term, while unit revenue has been unable to keep up with changes in unit costs, negatively affecting cost coverage.
  • Revenues for Competitive products as a whole exceeded incremental costs, therefore Competitive products were not subsidized by Market Dominant products during FY 2022.
  • A significant number of Market Dominant products failed to meet their service performance targets for FY 2022 and directs the Postal Service to take corrective action.

USPS Releases First Quarter Results. On February 9, the United States Postal Service announced its financial results for the first quarter of fiscal year 2023 (Oct. 1, 2022 - Dec. 31, 2022). The Postal Service's operating revenue was $21.5 billion for the quarter, an increase of $206 million, or 1.0 percent, on a volume decline of 1.7 billion pieces, or 4.8 percent, compared to the same quarter last year. Shipping and Packages revenue increased $203 million, or 2.4 percent, on a volume decline of 70 million pieces, or 3.5 percent, compared to the same quarter last year.  First-Class Mail revenue increased $95 million, or 1.5 percent, on a volume decline of 587 million pieces, or 4.5 percent, compared to the same quarter last year. Marketing Mail revenue decreased $106 million, or 2.4 percent, on a volume decline of 879 million pieces, or 4.7 percent, compared to the same quarter last year. 

PRC Releases Annual Report to the President and Congress On January 31, the Postal Regulatory Commission released its Annual Report to the President and Congress summarizing many of the activities undertaken by the Commission throughout the year.  The Commission's highlighted accomplishments included conducting rulemakings related to 1) service performance reporting requirements; 2) the letter monopoly; 3) rate incentives for Market Dominant products; and 4) the minimum appropriate share of institutional costs required to be borne by competitive products; and issuing advisory opinions on Postal Service proposals to 1) change service standards for Retail Ground and Parcel Select Ground and 2) revise the critical entry times (CETs) for some categories of Periodicals mail; and issuing analytical reports on the Postal Service related to compliance with pricing and service standards; the financial health of the Postal Service; and evaluation of the Service’s performance goals and plan.

Commissioner Mark Acton Elected PRC Vice Chairman On January 4, The Postal Regulatory Commission (PRC) announced that it had voted unanimously to designate Commissioner Mark Acton as vice chairman of the Commission effective January 1, 2023, succeeding Commissioner Ann Fisher. Agency regulations provide that the commissioners elect a member to serve as vice chairman for a term of one year. Commissioner Mark Acton was reappointed to the Commission by President Barack H. Obama on December 12, 2016, for a third term of continued public service extending until October 14, 2022, and was confirmed by the United States Senate on December 10, 2016.

PRC Unveils 5 Year Strategic Plan On January 3, 2023, the Postal Regulatory Commission unveiled its 2023-2028 Strategic Plan.  The Plan was developed using a foresight-based strategic planning process, guided by Toffler Associates. The strategic planning process also included inputs from the Commission’s diverse and skilled staff and a variety of external postal experts, to ensure that the Commission continues to operate as an effective and objective regulator that is trusted by the American public, policymakers, and all interested stakeholders. The four Strategic Goals identified encompass the Commission’s priorities and strategic focus throughout 2023-2028:

  • Strategic Goal 1: Anticipate and adapt to an evolving postal system through a responsive and trusted regulatory framework.

  • Strategic Goal 2: Enhance and expand communication of accurate and relevant regulatory information to postal stakeholders, policymakers, and the general public.

  • Strategic Goal 3: Develop an internal infrastructure to support and strengthen our regulatory capabilities through adaptive policies, efficient processes, and scalable platforms.

  • Strategic Goal 4: Build an organization that will attract, develop, and retain a diverse workforce of experts.

PRC Releases Annual Compliance Report On December 29, 2022, the Postal Regulatory Commission (PRC) released its Annual Compliance Report (ACR) for fiscal year 2022.  Overall, the ACR demonstrates that in FY 2022 the Postal Service’s Market Dominant and Competitive products were broadly in compliance. Service performance in FY 2022 showed substantial improvement over FY 2021, which had been exemplified by the negative service performance impacts of the COVID-19 pandemic, and which demonstrated that the Postal Service’s network needed fundamental improvements in order to provide precise, reliable service.  Overall, the Customer Experience (CX) Composite, which provides a comprehensive view of the Postal Service’s customer experience across multiple touchpoints, improved in FY 2022.

USPS Intends To Deploy Over 66,000 Electric Vehicles by 2028 The United States Postal Service on December 20th announced that it expects to acquire at least 66,000 battery electric delivery vehicles as part of its 106,000 vehicle acquisition plan for deliveries between now and 2028. The vehicles purchased as part of this anticipated plan will begin to replace the Postal Service’s aging delivery fleet of over 220,000 vehicles.The announcement is enabled by the Postal Service’s overall network modernization efforts which allows for a more rapid deployment of EVs, and its improving financial condition which includes $3 billion in congressional funding appropriated under the Inflation Reduction Act (IRA). New NGDVs are expected to start servicing postal routes in late 2023.