Nonprofits that use mail to help achieve missions already are experiencing record rate hikes in 2021 and 2022. With the July 2022 increases, the compound 18-month impact will be 16% to 20% on average, with some types of mail receiving even larger hikes. And, USPS is predicting at least another 3% to 5% in January 2023 if it stays with its plan to raise rates twice a year.
Is this happening because of the “defective pricing model” the PMG blames? Of course not.
I was the USPS vice president of pricing when the 2006 postal reform law was passed, creating the CPI-capped (consumer price index) rate regulations. We in the Postal Service were very optimistic about the new pricing model for many reasons. It gave us the freedom to do our pricing as long as the average increase for each class stayed within the cap. And packages could be priced with no cap at all, as long as each product covered its cost. The new law also allowed us to retain profits for future capital investments, fast-track new product tests, and negotiate pricing agreements with individual customers.