It appears the United States Postal Service has had a change of heart. After issuing a request to the Postal Regulatory Commission in July to raise postal rates in January 2012 over 4 percent (considered an exigent increase) to combat revenue loss due to economic conditions and the continual transition to digital, the USPS is no longer seeking the rate increase.

Postmaster General Pat Donahoe shared with the Mailers Technical Advisory Committee on August 17 the USPS would “pursue that case only to get the PRC to clarify its position on when such exigent rates increases are allowed”, according to anonymous blogger Dead Tree Edition.

The rate hike would have been on top of the usual increases outlined by the Consumer Price Index.

In preparation for the expected loss of $8 billion in the 2011 fiscal year, as well as to begin the process of eliminating 220,000 employees by 2015, the USPS began negotiations with the National Association of Letter Carriers today.

In a prepared statement from USPS, chief HR officer and EVP Anthony Vegliante says, “Wages and benefits for all employees represent nearly 80 percent of our costs. To remain solvent, we must negotiate contracts that address our total labor costs and enable us to downsize quickly to adjust to America’s changing mailing needs while being fair to our customers and employees.”

Vegliante also says if the Postal Service was a private business, it would have already filed for bankruptcy and used the process to “restructure its labor agreements to reflect the new financial reality”.

In 2006, mail volume topped at 213 billion pieces. In 2010, mail volume dropped 20 percent to 171 billion pieces.

New Ecommerce and Paid Content Models
Check out this related session at The Folio: Show, November 1-2 in NYC!

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