1. Why is the 7-cent surcharge so much higher than the 5.2 cent cost? A surcharge may at times be more than 100 percent of the cost underlying it, but not often when it's first introduced.
2. Why should each piece in a mailing pay the surcharge when only a few pieces would be expected to require UAA treatment? If, on average, 20 percent of the pieces in noncompliant mailings receive UAA treatment, and the markup to 7 cents were taken as appropriate, common ratesetting practice would set the each-piece surcharge at 1.4 cents (0.20 times 7 cents).
A Bad Move for Small Mailers: Postal Expert Questions Move Update Surcharge
1. Why is the 7-cent surcharge so much higher than the 5.2 cent cost? A surcharge may at times be more than 100 percent of the cost underlying it, but not often when it's first introduced.
2. Why should each piece in a mailing pay the surcharge when only a few pieces would be expected to require UAA treatment? If, on average, 20 percent of the pieces in noncompliant mailings receive UAA treatment, and the markup to 7 cents were taken as appropriate, common ratesetting practice would set the each-piece surcharge at 1.4 cents (0.20 times 7 cents).