In bid to drive up postal rates, UPS takes the PRC to the Supreme Court

Last December, the United Parcel Service petitioned the Supreme Court to review a decision by the DC Circuit Court that upheld a ruling by the Postal Regulatory Commission concerning the cost allocation methodology used by the Postal Service.

Today the case entered a new phase as briefs opposing the UPS petition were filed by the PRC and several intervenors, including the Postal Service, Amazon, the National Association of Letter Carriers, and the Parcel Shipper’s Association.  (UPS initial petition is here; the PRC brief is here; the intervenors’ brief is here.  Other documents filed in the case can be found here.)

UPS believes that the Postal Service has been using a method for allocating its costs that basically allows the Postal Service to charge unfairly low prices on parcels.  If UPS were to prevail in the case, more of the Postal Service’s costs would be assigned to competitive products (which includes parcel shipping), and that in turn would lead to higher prices for the services with which UPS competes.  UPS could then raise its rates as well, or at least be in a better competitive position to increase its market share.

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