Court Upholds Large Rate Increases For The USPS (

A federal appeals court on Friday upheld the major rate hikes imposed in August by the U.S. Postal Service, saying the Postal Regulatory Commission’s order underlying the increases was neither arbitrary and capricious, nor did it exceed the Commission’s statutory authority.

The decision, by the U.S. Court of Appeals for the District of Columbia Circuit, preserves a 6.8% increase for first-class mail and an 8.8% increase for package services — hikes of unprecedented size in recent years. The increases came after the PRC late last year finished an overhaul of the existing rate-setting system, which it had deemed inadequate. The new rate system ties price caps to what the PRC identified as the USPS’ most significant cost drivers: fewer pieces of mail going to more addresses and benefits payments the agency is required to make for future retirees.

The case in the appeals court was brought by the National Postal Policy Council, the trade association for large business users of letter mail, primarily first class. Members of the NPPC are a who’s who in the U.S. economy, particularly banking and insurance, including Netflix, State Farm, Wells Fargo, Sprint, American Express, Citibank, Canon, and Fidelity Investments.
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