The consequences of not having a meaningful postal reform bill that has passed in Congress and been signed by the president by the time you read this will be very real and very painful.
Mailers can expect to shell out close to $3 billion more in postal rates in 2006 and beyond, if:
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The U.S. Postal Service is required, under the Postal Civil Service Retirement Funding Reform Act of 2003, to resume payments into escrow toward postal employees’ Civil Service Retirement System pension fund; and
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The USPS remains the party that must pay for the military service portion of any postal employee’s CSRS pension.
While the USPS has thus far remained mum, it’s beginning to look as if a postal rate filing will be entered at the Postal Rate Commission some time before the end of this year. The increase in gas prices that we all have noticed also has been pushing postal costs higher, and, in a world where there is no such thing as a free postal lunch, that means rates will go up too.
What will this mean for those who pay the postage? Some have estimated that postal rates, depending on the subclass and rate category, could rise as much as 12% to 15%. This, for sure, will have a dampening effect on a mailer’s ability to generate a profit, and for sure will squelch some of the growth in mail volume the USPS and mail service firms will require to maintain their economic vitality. In short, the news will be far from good for anyone who uses the mail for communication and commerce.
Many financial institutions are moving as fast as they can to get out of the mail. If postal rates rise by double digits, expect to see more of them converting mail-based billing and collection schemes to an electronic alternative.
Some mailers, particularly in the business-to-business sector, are hastening efforts to develop electronic communications. Many office supply and advertising specialty firms already have significant Internet-related businesses. There’ll be even more of this in the mail order realm.
In the meantime, count on more of the
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