Appeals court tells USPS regulator to rethink ‘incomprehensible’ package revenue formula

A federal appeals court has called on the Postal Regulatory Commission to rethink the formula it uses to determine whether the Postal Service’s competitive package business generates enough revenue to justify its costs.

The D.C. District Court of Appeals, in its ruling Tuesday, determined that the postal regulator’s most recent formula used to calculate the “appropriate share” of revenue needed to cover operational costs “fails to articulate a comprehensible standard.”

“The bottom line is that the Commission’s Order is arbitrary and capricious because it is ‘largely incomprehensible’ with respect to the matters in issue,” the three-judge panel wrote in their decision.

The ruling gives the Postal Service and its regulator more to consider about its future business model, as USPS warns Congress that the coronavirus pandemic has triggered a steep decline in mail the agency “may never fully recover” from.

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