Post Office Loses Fight to Preserve Deep Discounts

     (CN) – The Post Office’s discount for presorted mail cannot exceed the cost the office avoids by not having to sort the mail itself, the D.C. Circuit ruled.
     “Through snow and rain and heat and gloom of night, the Postal Service delivers the mail,” Judge Brett Kavanaugh wrote for the three-judge panel. “But the Postal Service does so under the watchful eye of a separate independent agency, the Postal Regulatory Commission.”
     The Postal Regulatory Commission establishes the rates that the U.S. Postal Service may charge for mail.
     In a recent order, the commission found that the U.S.P.S. is giving too large of a discount for presorted first-class mail compared to single-piece first-class mail.
     While the discount encourages presorting, lowering costs for the Postal Service, the discount currently exceeds the cost the Postal Service would pay to sort the mail itself.
     “The Postal Service is unhappy because it believes that it needs to offer bulk mailers large discounts so that bulk mailers will continue to use the U.S. Postal Service rather than, say, email,” Kavanaugh wrote.
     It sought review of the commission’s order, but the D.C. Circuit shot it down Tuesday.
     “We think the correct statutory analysis here is extremely simple and supports the commission: the discount that the Postal Service offers for presorting is a ‘rate discount[] provided to mailers for … presorting,'” Kavanaugh wrote. “Therefore, it is clear that, as the commission concluded, the amount of the discount that the Postal Service may offer for presorting is subject to the statute’s workshare discount limit, and the discount may not exceed the cost that the Postal Service avoids as a result of the presorting.”
     The commission reasonably concluded that customers choose to presort their mail based on the lower price, and a 1 percent increase in price will cause a “significant change in demand,” according to the four-page decision.

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