Mailers Ask: What’s the Hurry?

Merry Christmas, direct mailers. The U.S. Postal Service will introduce its new rates on Jan. 8 — a week or two earlier than expected. And mailer groups feel dissed.

“The USPS stuck its thumbs in our eyes,” said Gene Del Polito, president of the Association for Postal Commerce.

That expedited 5.4% hike isn’t the only bad news. Mailers should prepare themselves for a new rate case in 2006.

Merry Christmas, direct mailers. The U.S. Postal Service will introduce its new rates on Jan. 8 — a week or two earlier than expected. And mailer groups feel dissed.

“The USPS stuck its thumbs in our eyes,” said Gene Del Polito, president of the Association for Postal Commerce. He added that the hikes would be particularly difficult for companies that have to make January mailings for white sales and other seasonal events.

And that isn’t the only bad news.

Most postal rates are going up by an average of 5.4% now, but mailers will have to prepare themselves for a new rate case in 2006. That one is likely to lead to bigger increases and some changes in rate classification.

And not everybody got away with a 5.4% hike this time around. Book shippers were hit with a Media Mail rate hike of 12.7% despite protests by the Direct Marketing Association that this increase was more than twice what the USPS asked for and that it was largely unjustified.

Under the new schedule, the single-piece rate for first class mail will increase from 37 cents to 39 cents and the postcard rate will go up by 1 cent to 24 cents.

Other rates will rise as follows:

• Standard Mail regular: 5.4%

• Enhanced Carrier Route: 5.5%

• Nonprofit regular: 3%

• Nonprofit Enhanced Carrier Route: 12.3%

• Priority Mail: 5.4%

• Express Mail: 5.5%

• Parcel: 7.3%

• Periodicals within county: 2.3%

• Other periodicals: 5.5%

But it’s clearly the next increase that concerns mailers most. The anticipated 2006 rate case probably will include changes in classification and how the USPS attributes costs, said Del Polito.

But back to the new rates. Nonprofit mailers will pay $16.1 million less than what the USPS had asked for even though the Nonprofit Enhanced Carrier Route rate is shooting up by 12.3%, said Neal Denton, executive director of the Alliance of Nonprofit Mailers.

This drew fire from the DMA Nonprofit Federation. “While we understand that the Postal Rate Commission felt constrained by statutory requirements, that does not alleviate the pain of a 12.3% increase for nonprofits that are working so hard to keep overhead costs to a minimum,” said DMANF president Senny Boone.

As previously reported, the USPS filed this rate case to help fund former employees’ pensions. If postal reform does not pass the 109th Congress, which ends at the end of 2006, “the postal service will be saddled with paying the escrow and military pension obligations for many years to come,” said Bob McLean, executive director of the Mailers Council.

So where does postal reform stand right now?

Last summer, the House passed its reform bill (H.R. 22) by a 410-20 margin and the Senate Government Affairs and omeland Security Committee voted 15-1 to bring its bill, S. 662, to the full Senate. But stumbling blocks remain.

At deadline, Committee Chairwoman Susan Collins (R-ME) and Sen. Christopher Bond (R-MO) were trying to resolve their differences of opinion. Bond reportedly hoped to persuade Collins to include language from the House bill that would allow rate payers to challenge individual rates — such as the price of first class stamps — if they did not see them as “fair and equitable.”

McLean hoped these differences would get ironed out since Senate Majority Leader William Frist (R-TN) had taken an interest in resolving this dispute.

But the patience of even the most ardent postal reform supporters is wearing thin.

“I think Sen. Collins is pretty sick of this now and has other things she wants to do,” said Del Polito, warning that if postal reform dies in this Congress, “we probably won’t see anything before the end of this administration.”