Rate-Case Appeal Is a No-Lose Venture for USPS

The U.S. Postal Service’s decision, announced today, to appeal the Postal Regulatory Commission's exigency-rate ruling could backfire, and yet in a way the Postal Service can’t lose.

The appeal could backfire if the appeals court decides that hardship to USPS caused by an economic recession is not grounds for breaching the inflation-based price cap on most postal rates. The PRC said the recent recession did in fact justify emergency rate increases but that postal officials failed to tie their request to the recession.

Regardless of what happens in the Court of Appeals for the District of Columbia, the appeal is likely to be a winner in the court that really matters for the Postal Service – Congress. Win, lose, or draw, there’s not enough money at stake in the exigency case (“only” $2.3 billion) to fix the Postal Service’s finances.

The only potential solutions big enough to stanch the bleeding seem to be reforming retirement-benefits payments that shift money from USPS to the federal government, reducing days of delivery, or some kind of radical downsizing. Congress is the key, or rather the roadblock, to all of those.

To get Congress to remove any of those roadblocks, postal executives need to show Congress that they have done everything possible within current law to balance the books. They can’t afford to be second-guessed regarding why they didn’t appeal the PRC’s Sept. 30 ruling, even if the court’s ruling closes a door (a revised exigency rate request) that the PRC left open.

The Postal Service's announcement did not provide much detail regarding the basis for its appeal, other than that it "disagrees with the PRC’s interpretation of the statutory language and believes that the PRC applied an incorrect standard in evaluating the request for anexigent price increase."

It added, "The Postal Service believes we need clarity regarding the exigent price increase rules under current law should the Postal Service find itself in a similar situation in the future."

The appeal will have no impact on USPS’s ability to seek an inflation-based increase, which could happen any day.

Related articles:

• PRC Decision Only a Partial Win for Mailers 
• Informal Ruling Makes Postage Increase of 1.7% Likely in January  
• Mailers Alliance Fights 'Nonsensical' Price-Cap Ruling