The Direct Marketing Association has applauded the Postal Rate Commission’s decision to approve a negotiated service agreement (NSA) between the U.S. Postal Service and Bookspan.
This is the first such agreement the USPS has made with a non-financial institution the first to allow volume discounts for Standard Mail mailings.
Previous NSAs applied only to first class mailings.
The NSA provides a discount for the mailer on the basis of volume alone, and does not require additional work from the mailer.
"We applaud the efforts of the PRC, the Postal Service, Bookspan, and numerous interested stakeholders to bring about this agreement," said Jerry Cerasale, DMA senior vice president for government affairs in a statement. "We hope it opens the door for future agreements that will encourage large mailing projects and in turn, bring additional and much-needed revenue to the Postal Service."
"This historic decision was the product of extensive discussions and thorough analyses by the Postal Service and Bookspan," said Markus Wilhelm, CEO of Bookspan. "This victory benefits all users of the Postal Service for the long term as it creates a model to offer incentives to grow.
“We are hopeful that the PRC action will set a foundation for future similar arrangements so that the Postal Service can more effectively attract additional volume and compete in today's direct mail marketplace," noted Wilhelm.
Negotiated service agreements allow the USPS to negotiate mutually beneficial terms for service and price with large mailers. Under NSA rules, the terms of any approved agreement must then be extended to any other company with a project of similar scope.
For the past few years, the USPS has been making NSAs with various financial institutions. Last June, for example, it made such an arrangement with financial direct mailer HSBC North America Holdings Inc. that gave HSBC discounted rates for shifting volume from standard to first class postage rates and increasing the use of first class mail which was expected to result in savings of about $7 million for the Postal Service over the three-year term of agreement.
HSBC joined Capital One Service Inc., Bank One (now JPMorgan Chase) and Discover Financial Services Inc. in NSAs approved by the USPS Board of Governors.
Both the House and Senate versions of postal reform bills allow for the continuation of NSAs.
