Possible rate hike unites the (postal) classes

Customers fill in address information on packages at the United States Post Office at Rincon Center on December 17, 2012 in San Francisco, Calif.

Class division in the United States can be stark, but in one small way, tough financial times at the Postal Service are uniting the classes.

Which classes are those? First, periodical, standard and packages -- as in the classes of U.S. mail. Sometimes, businesses that rely on different classes of mail are at odds, but as the Post Office considers an emergency rate increase, they’ve united.

All classes would be affected,” said Rita Cohen of the Association of Magazine Media, which is periodical class. “We have banded together with the other classes in a group called the Affordable Mail Alliance.”

The alliance is fighting a postal rate increase beyond the rate of inflation.

“We feel that the root cause issue of too much cost has to be addressed first,” said Hamilton Davison of the American Catalog Mailers Association, “before we consider taking steps that will ultimately degrade the long-term viability of the Postal Service and the mail system itself, by raising prices.

By law, the Postal Service can ask for a rate increase if there’s what’s called an exigency, an extraordinary circumstance like 9/11. So do the Postal Service's multi-billion dollar losses qualify now? There’s an argument on both sides, said John Waller, who worked with the Postal Regulatory Commission when it denied the last such request in 2010.

“They clearly need the money,” Waller said. “They’ll run out of cash at some point.”

The Postal Service’s board of governors is expected to discuss pricing on Thursday. But most people say the real structural fixes on costs like prepayments for retiree healthcare have to come from Congress.

About the author

Kate Davidson is a regular contributor to Marketplace.

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