The mailers were probably disappointed that the Postal Service’s new 10-year plan released yesterday, “Delivering for America,” did not reveal how big of a rate increase the Postal Service intends to make using the new authority it was granted by the Postal Regulatory Commission. While they wait in suspense, here’s a guess: 3.6 percent.
We already know that the calculations the Postal Service submitted to the PRC in February indicate the hike could be as large as 5.56 percent (on top of the CPI increase), but the new system allows some of the rate authority to be banked for future years, so the increase could be smaller. And that is just what the following analysis suggests.
This analysis is based on two tables and a couple of comments that appear in the 10-year plan. The tables show revenue and expenses under two scenarios, a base case using the status quo and an alternative that uses the revenue and cost savings under the Delivering for America plan. The tables contain numbers for projected volumes and revenues over the next ten years that can be used to estimate what the Postal Service is planning for future price increases under the new rate authority.