Businesses Take Legal Action to Stop Hefty USPS Price Hikes
Under the umbrella of nonprofit the Alliance of Nonprofit Mailers, a consortium of frustrated US businesses took legal action against the United States Postal Services (USPS) to halt price hikes.
Already fuming at the sixty-four percent drop in on-time delivery reported by the USPS in December, the participating organizations include numerous major print-focused firms whose business depends on mailing, including printers, commercial mailing firms, and nonprofits.
USPS announced it would be hiking prices for mail this March, with the activation date set sometime in summer. Under the umbrella of the Alliance of Nonprofit Mailers, the group requested the federal appeals court in the District of Columbia to undertake a full review and impose a stay on the legal rules that allow the USPS to raise postage prices.
The petition states they are afraid the USPS will raise prices dramatically by 5.5 to 9 percent during 2021, significantly impacting their firms’ mailings of magazines, mailers, letters, and more. The group noted the scheduled price hikes might cost them more than $2 billion annually.
In November, the Postal Regulatory Commission approved a new pricing authority to the USPS. The new pricing will no longer be based upon inflation but instead be shared among different mail categories, such as magazines or mailers vs. consumer letters.
Last week, the litigants met with USPS postmaster General Louis DeJoy via Zoom.
DeJoy said the USPS is experiencing annual losses and, “while not the only action required, we must consider our new pricing authority as an important part of the solution.”
Hamilton Davison, the American Catalog Mailers Association executive director, said this is not the right time to "aggressively increase prices" and had also warned of USPS hikes last June.
Davison predicted the USPS, facing dire financial conditions, "may need to use exigency to address its liquidity crisis it has now."
The USPS has lost over $78 billion over the past decade due to rising costs and declining mail. In 2019 alone, those losses included a staggering $8.8 billion. Its unfunded liabilities and debt account for more than $150 billion and represents more than double its revenue of $71.1 billion in 2019.
The COVID-19 pandemic has exacerbated liquidity issues that have sorely tested the USPS. The USPS reports on-time delivery dropped significantly, under sixty-two percent, from January 2020 to December 2020. Many millions of mail-in presidential ballots slowed down the system, and in a perfect storm, remote-workers and many millions of Americans told to stay indoors during the Pandemic created a vortex of late or missing packages. Postal employees also called out sick due to getting the novel coronavirus, further impacting deliveries.
Numerous states sued the USPS in several lawsuits last summer. Led by the New York Attorney General, 21 states, including New York, Pennsylvania, California, Delaware, Maine, Massachusetts, North Carolina, and others sued the USPS for service delays, saying it was a threat to the presidential election delivery rates.
Washington filed a second multi-state lawsuit against the USPS, DeJoy, and Trump, with Colorado, Connecticut, Illinois, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Virginia, and Wisconsin included.
