Just following the July 4th holiday, the Postal Service quietly announced a rate hike equal to ten times the rate of inflation. The decision to hit their customers with such a steep increase is only the most recent example of Postal management failing to treat the Service like a business - chasing three years of declining revenues with a rate hike that will send customers running and the Postal Service further into its own death spiral.
In addition to defying all logical business sense, the request for these rate hikes is illegal. In 2006, Congress understood that mail volume would continue to decline due to increased usage of the Internet - a fact that had been clear for ten years. In response, Congress passed a law that created incentive-based postal rates, and specified that postage rates could not rise more than the rate of inflation, assuming Americans would benefit from a Postal Service with greater flexibility. If the Postal Service could control costs to be less than inflation, it would reap financial rewards. If it could not, the Service would have to cut costs and improve its business. Gone were the days of just raising postage and expecting customers to pay. Or so we thought.
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