As we mentioned last week the requested postage stamp increase of an average 5.6%, to take place in 2011, was unanimously denied by the Postal Regulatory Commission.  Commission stated a failure to justify the increase in excess of the CPI price cap as its reason for refusal.

According to Chairman Ruth Y. Goldway in last Thursday’s press release: “The Commission finds that the Postal Service has shown the recent recession to be an exigent circumstance but it has failed both to quantify the impact of the recession on its finances and to show how its rate request relates to the resulting loss of mail volume; therefore, we unanimously deny its exigent rate request.”

The Commission does not believe the proposed increase would solve the “structural problems” unrelated to the recent recession that has led to the Postal Service’s volume loss.  The Postal Service is also trying to meet a 10-year payment schedule for future retiree health benefits, and was hoping to use this increase to help fulfill that requirement.  However, the Commission feels this rate increase would not have a successful impact on that situation either.

Many members of the Affordable Mail Alliance, including businesses involved with the Mailing & Fulfillment Service Association and National Newspaper Association, are applauding the Commission’s decision.  Both were opposed to the suggested increase and feared it would cause a decrease in their industries.  The decision is clearly a huge success for these groups which actively filed comments and letters petitioning the Postal Service’s request.