Beleaguered direct mailers got the best holiday gift of all last month when Postmaster General Jack Potter announced that there might not be another rate hike until 2006.
Of course, Congress has to change the law that controls funding of the USPS retirement fund, and that’s not likely to happen in this lame-duck session. But when it does, the result will be a windfall for the USPS and four years of rate stability.
The saints be praised, direct mail is saved.
Postage may be just another line item to some mailers, but it’s a life-and-death matter for others and this could lead to a general loosening up of budgets.
It could mean a surge of old-fashioned packages with buck slips, lift letters, color brochures and four-page epistles written by our great copywriters.
And this could lead to greater prosperity for list brokers, printers and others that facilitate the use of direct mail.
Finally, it might mean that the DMA and other perennial rate-case interveners will get a break for a few years. It’s almost too good to be true, and we hope we don’t wake up in January with a post-New Year’s hangover and the prospect of another hike in 2004.
But that raises a tough question: Why are we even having this discussion? Why should mailers be hanging on the words of a supplier?
The long-term answer is still postal reform, and there’s no guarantee that our Republican Congress will take it up in the near future.
Republicans may be more reform-minded than Democrats, but as Gene Del Polito points out, this new windfall might slow the reform debate (see story, page 11). And UPS is likely to fight anything it thinks will harm it competitively.
Potter is moving in the right direction with negotiated agreements and the idea of staged increases, but the postal service as now constituted is as outmoded as that other creation of the Nixon administration, Amtrak.
Anyway, a four-year rate hike delay won’t solve the other problems plaguing the direct mail business
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