Postal Rate Increase, Act II
It’s ironic: No sooner did the postal reform bill get signed into law than the Postal Regulatory Commission’s recommendation for unexpectedly sharp USPS rate increases sent shock waves through the direct-to-customer industry. Some sources are talking about 20%–40% hikes in rates for flat pieces, the category most directly affecting the catalog industry. (The USPS recommendation was a 12.5%increase.) The postal reform bill, designed in part to reduce just this sort of increase, will not fully take effect until 2008, and the current rate increase, though not the specific amount, has been in the pipeline since last year.
Thanks to several quickly organized protests—see the March 6 post on this blog below, for instance—hundreds of letters went to the USPS board of governors last week, asking them to reconsider or reject the PRC’s recommended rates. In addition, we understand that hundreds of companies attended what turned out to be a sometimes heated open forum of the USPS Board of Governors a few days ago.
The rates for flat mailings in particular are twice what the USPS proposed, according to DM News. The Board of Governors announced two days ago (March 19) their approval of the recommended changes. However, the Board allowed three of those changes under protest, and resubmitted them to the PRC to consider mitigation. The three changes to be reconsidered include: 1) rates for standard mail flats; 2) surcharges on first-class, non-machinable mail; and 3) flat-rate Priority Mail box fees.
Catalogers must nevertheless plan for significantly higher-than-expected flat mailing rates to take effect May 14.
The DMA hosted a Webinar yesterday (March 20) on the rate case to give mailers an update and to explain how the proposed rates could impact bottom lines and operations. We’ll provide a recp of the webinar here, so check back soon.