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Government Operations: Postal Automation and Pricing in the 1990s

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Report Type Reports and Testimonies
Report Date May 12, 1992
Report No. T-GGD-92-39
Subject
Summary:

During the past 20 years, the Postal Service's competitive position in the marketplace has been eroded, especially in parcel post and overnight mail. GAO believes that Congress should re-examine whether the criteria used by the Postal Rate Commission to set postal rates are still valid given changing marketplace realities. In particular, demand pricing and volume discounts may be appropriate pricing strategies to stem losses in the price-sensitive third-class mail market, which could drive up the cost of first-class postage to cover these losses. Congress could then be faced with demands to further open postal markets to competition or to subsidize the national delivery network through appropriations. This testimony also discusses Postal Service efforts to meet its competitive challenges by improving productivity and controlling costs through automation.

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