A “nonmachinable surcharge” of 1 dollar and 42 cents has been tacked on to every bundle of goods moving as bypass mail, regardless of weight.   

The surcharge is intended for oversized, oddly-shaped, or heavy parcels, which require special handling from postal employees, and cannot go through the Post Office’s automated sorting system.  And like the postal rate itself, the surcharge was slated to increase next Monday, May 14, to 2 dollars and 87 cents per bundle – twice as much as the current surcharge.   

Senator Stevens confronted Postmaster General John Potter about the surcharge, and argued that it should no longer apply to bypass mail. 

Stevens: "[bypass mail shipments] come in on these large palettes. They're not associated in any way with the nonmachinable surcharge. And as we looked at it, we asked the Postmaster General if we could have that surcharge removed from bypass mail, that never came in contact with the post office.  Under the circumstances, he said when these new mail rates go in effect on the 14th, the nonmachinable surcharge will not be applied to bypass mail”

The rates for parcel post and first class mail are going up as planned next Monday.  This increase will still affect bypass mail shipments of groceries and other supplies, driving up the current rates by an average of 12 cents a pound. 

Stevens: "This was something coming about because of the increased cost of fuel..and that's a nationwide increase, and not just an Alaska increase.  Because of the size of that national increase, it was going to be very difficult to control the cost of shipping the necessities of life to people in rural areas."

But without a surcharge tacked on top of the rate increase, shipping for a typical 50 pound parcel will only cost 1 dollar and 44 cents more beginning next week.  If the surcharge was still in existence, the same 50 pound bundle would cost 4 dollars and 31 cents more to ship via bypass mail.

Rex Wilhelm is the President and CEO of Alaska Commercial Company, which uses bypass mail to supply 18 of their 29 Alaskan stores.

He traveled to Washington to lobby Stevens and the Post Office to reduce or eliminate the rate increase for bypass mail.  He says that AC is celebrating the news.  

Wilhelm: "Most of us that do business and live in rural Alaska have been just dreading this increase that's coming through.  We are still going to be looking at an increase, when it's all said and done. But it is so much less than it could have been." 

Stevens does not think that the Postal Service is trying to drive bypass drive out of existence.  Instead, he finds Postal officials to be very cooperative in an effort to further reduce the operating costs of bypass mail, focusing on some of the “middlemen” that are increasingly involved in the packaging and handling of bypass mail.

Stevens: The Post Office has been very accommodating in trying to keep the cost to the consumer down. The difficulty is that the system itself - because of these palettes getting bigger, and because of the way they have been packaged - we think that some of those costs that are paid to third parties, before the Post Office actually gets the package, can be reduced."

The Postal Service estimates that it loses about 60 million dollars per year on bypass mail, and a 2006 Post Office review identifies Alaska bypass mail as one of the top 5 cost burdens for the Postal Service nationwide.