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DOCUMINT RESUN
03474 - [A2693864] (Festricted)
[Feasibility of Cost Study on Certnin Classes of Mail].
GGD-77-64; B-114874. June 29, 19 . 3 pp.
Report to Rep. Jares C. Cleveland; by William J. Anderson (for
Victor L. Lowe, Director, General Government Div.)-
Contact: General Government Div.
Budget Function: Commerce and Transportation: Postai Service
(402).
Orgarizaticn Concerned: Commission on Postal Service; Postal
Rate Ccauission; Postal Service.
Congressional Relevance: Rep. James C. Cleveland.
Authcrity: Postal Reorganization Act of 1970 (39 V.S.C. 101).
A recent cost study dealt with the qualifications of
certain mailers for reduced rates and tLe allocation of costs
among the various classes of mail. The Po.tal Reorganization Act
of 1S70 required that each class of mail recover attributable
cost plus same portion of institutional costs.
Findimgs/Ccnclusicns: The Postal Rate Commission has attributed
60.41 of costs to particular classes of mail and types of
services and the remaining 39.6% has been assigned in accordance
with customer demand and value of service factors. The
Commission on Postal Service agreed with this allocation and
stated that attributing more costs will increase rates and
decrease mail volume. In a recent decision in favor of the
Greeting Cazd Publishers Association, the U.S. Court of Appeals
said that the Postal Service was establishing prices of
different classes of mail improperly; that first-class rates
were too high and t!e others too low. Between 1971 and 1976, the
volume of first-class mail increased 4%, and second-class mail
declined by 8%. Declines have also occurred in the volumes of
third-class mail and parcel post. Significant rate increases
have occurred and the Commission on Postal Service believes
that, if rates for second-class, third-class, and fourth-class
mail continue to increase, volumes will continue to decline.
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