A consortium of direct marketers and mass mailers has urged the Postal Rate Commission to reaffirm its recommendations that resulted in January's 4.6% rate increase for the financially ailing U.S. Postal Service.
At the request of the postal service's Board of Governors. the PRC, for the second time in a little over a month, is reconsidering its recommendations for a rate increase that fell short of the 6% the USPS wanted.
Postal governors say the USPS could end the current fiscal year next September with a deficit of between $2 billion and $3 billion and could be forced to reduce delivery service unless the PRC changes its recommendations.
In a related development, the Mailers Council, a coalition of major mailer groups, urged the USPS to reconsider its announced plan to seek a double-digit rate increase by the middle of next year, saying that such an increase "coming so quickly after the January increase" would lead to a drop in both mail volumes and revenues."
The consortium, led by the Direct Marketing Association, urged the PRC to reaffirm its November and February rate increase recommendations. In legal papers, the group said they were "reasonable and amply supported by the record" of the 10-month proceedings leading up to its initial recommendation in November.
Noting the USPS has not asked the PRC to re-open the proceedings or its record, the consortium added that the PRC's earlier decisions gave the USPS almost all the new revenue it wanted and the reduction in the amount of money the USPS can hold in reserve for emergencies, $1.7 billion from $2.8 billion, was "more than justified.
They also said postal officials "exaggerated" their fears over a possible economic downturn over the 13-month period covered in the rate case could result in a loss of between $2 billion and $3 billion.
In the coalition with the DMA were: Advo Inc.; Alliance of Independent Store Owners and Professionals; Alliance of Nonprofit Mailers; Amaxon.com Inc.; American Business Media; Association of American Publishers; Association of Priority Mail Users Inc.; Coalition of Religious Press Associations; Dow Jones & Co.; Florida Gift Fruit Shippers Association; Magazine Publishers of America; Major Mailers Association, The McGraw Hill Cos.; National Newspaper Association; Parcel Shippers Association, and Time Warner Inc.
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