The January 2027 USPS rate increase DENIED… Is it over… not quite!
I am sure that you heard that the USPS was limited by the Postal Regulatory Commission (PRC) to only having one rate increase each fiscal year. This is a much-needed relief from the two increases each year that we have been experiencing since mid-2021. Most of us believed that the next increase would be July 2027 because the last increase was July 2026. But wouldn’t you know it … the USPS filed for a rate increase for January. And how were they planning to calculate it? They wanted to use estimated data to calculate the increase.
Well, on August 21, the PRC denied the USPS’s request, which would have resulted in a January 2027 Market Dominate rate increase of approximately 4.5%.
Why the PRC Denial?
The PRC …
is concerned about allowing the use of unaudited (estimated) data and the risk of it not being accurate (possibly over-inflated), resulting in mailers being overcharged;
wants to protect the transparency and the predictability mailers need for budgeting; and
believes a change this large should require a formal rulemaking change and not a simple waiver as requested by the USPS.
Does this mean there will not be an increase in January 2027? Not exactly. The USPS has the right to file for a smaller January Market Dominate price increase in October (basically a CPI-only adjustment), and the increase would be much smaller than the 4.5% adjustment that USPS was hoping to get. The general feeling is that USPS will forgo the January increase and hold off until July 2027. We will know for sure once we get past October’s filing deadline!
So, if the increase does not take place until July, what can we expect the increase to look like for Market Dominate mail? Industry projections estimate the July increase to be between 4.5% to 7.8% depending on the actual CPI and density-related data. Be sure you budget accordingly and always budget on the high end.
Stay tuned … IDM will be tracking this issue for you and remember, our production team is always available to walk you through best data practices to help you navigate the postal rate increases.
