C. Hamilton Davison, executive director of the American Catalog Mailers Association, was up against a tough audience.
He asked catalogers at Merit-Direct's Business Mailers Co-op last month how many spend 60% of their time thinking about the U.S. Postal Service.
Not a single hand was raised, although postage ranks as one of the top 10 expenses for most catalog mailers.
Nor did anyone respond when Davison asked if they spent 50% or 40% of their time on the USPS. It wasn't until he got down to 10% that a few hands went up.
No wonder Davison thinks the top risk to the catalog business may be “cataloger apathy.”
Here's more evidence that catalog people have their heads in the sand: A recent flats symposium held by the Mailer's Technical Advisory Committee drew more than 300 executives, yet only three were catalogers, Davison said. And they took the worst hit in the recent rate hike.
How bad was it?
Davison cited a company that spends $26 million a year on mail, sending all of its catalogs and packages via the USPS.
“It got handed an 18% increase in catalog rates and a 50% increase in package rates,” he said.
It was all part of a pitch for the ACMA. MeritDirect provided a forum for the association at its annual event.
What's this group's mission?
It plans to intervene in rule formulation and ratemaking, influence Congress and document the economic strength of the catalog industry, as shown by sales and number of employees.
That takes money. (One politician purportedly told Davison, “You have to write some checks.”)
Catalogs and other flats are important to the USPS, Davison continued. Roughly 53.2 billion flats were sent last year out of a total postal mail volume of 213 billion pieces. And of all flats mailed, 75% were Standard A — mostly catalogs, according to statistics presented by Tom Murray, Arandell Corp.'s vice president of strategies.
But flats mailers were “punished” during the recent rate case. And they have nowhere to go, given the postal monopoly.
Davison conceded that Postmaster General Jack Potter has turned the USPS from an “ossified bureaucracy” into a service-oriented organization. But it has an expensive work force, and that won't change despite the passage of last year's postal reform bill.
“Many of us wanted something in it that would control labor costs, but the reality is that nobody thought any of the politicians had the cojones to get that through,” Davison said.
Instead, the bill contained a rate cap tied to the Consumer Price Index. But even that won't save catalogers from future draconian hikes.
“Unfortunately, that cap applies to the class level, not the subclass level,” Davison explained. “Obviously, it's clear that subclasses can be differentiated and some can go up a lot more than others.”
Davison's solution? To have “a credible and properly funded association in Washington that's out bird-dogging issues in the postal environment.”
He went on to say that there's “a compelling and pressing need for participation in postal policy from this group. What are you waiting for?”
Like we said, it was a pitch.
