1. Newly-appointed PRC Commissioner, recently-named USPS Governor analyze the fate of the Postal Service: New Postal Regulatory Commission commissioner Michael Kubayanda and postal governor David C. Williams both previously served at the USPS Office of the Inspector General. Now serving on separate entities surrounding the Postal Service, they will lay out all possible options for reforming the agency to best serve catalogers' and other mailers' needs going forward. 2. Action plan for tariffs on imported merch: Angela Paolini Ellard from House Ways & Means will be part of a panel that will address catalog and other sellers of imported goods now being subject to paying 10% (or possibly greater) tariffs, the ongoing trade deliberations with China, including the impact of the US-China tariff policy, as well as a projected outlook on when, and how, this could come to end. This, coupled with an updated NAFTA and pending new free trade agreements with the EU, UK and Japan, means global supply chains could be disrupted or impacted. 3. Clearing up post-Wayfair remote sales tax confusion: 4. How the Postal Service fits your catalog marketing needs: 5. Catalog Day on Capitol Hill, April 9th: Click Read More below for additional detail.
The House Committee on Oversight and Government Reform has demanded that the U.S. Postal Service deliver it a detailed accounting of cost allocations for its competitive products, alleging that the agency may be in violation of the Postal Accountability and Enhancement Act (PAEA) by using revenues from market dominant products to prop up its shipping business.
“Opportunities for unlawful cross-subsidization exist in a number of areas. In fact, some of the Postal Service’s actions and public statements have heightened the Committee’s concerns about cross-subsidization,” said a letter addressed to Postmaster General Megan Brennan on May 13 and signed by Committee Chairman Jason Chaffetz (R-UT) and Mark Meadows (R-NC), chairman of the subcommittee on Government Operations.
The letter singled out funding of the USPS’s expanding shipping activities as the focus of its inquiry. “Given that Postal Service ‘package delivery’ products are almost solely competitive in nature, it is important to ensure [that] a bright line separation between marketing dominant products and competitive products is maintained.”
PAEA mandated that products such as package and shipping be self-supportive to keep them on a level playing field with public sector competitors like FedEx and UPS. It also required competitive businesses to cover a 5.5% share of institutional costs incurred by the entire postal network.
To learn whether USPS is complying with these mandates, Chaffetz and Meadows made eight requests of Brennan, including an explanation of how costs would be distributed for the purchase of new delivery vehicles, an explanation of why the percentage of competitive product cost attribution has declined since PAEA was passed, and the methodology for attributing costs for Sunday delivery of Amazon packages.
Both FedEx and UPS have filed comments with the Postal Regulatory Commission (PRC) over the past year, calling attention to what they perceive as unfair advantages for the government regulated monopoly.