The question of whether the U.S. Postal Service should be allowed to negotiate service contracts with mailers is fast becoming a major issue threatening the future of HR-22, the Postal Modernization Act of 1999.
Large mass mailers would benefit greatly from that provision as they would be able to negotiate reduced-rate, long-term contracts that would provide the USPS with millions of pieces of mail presorted down to the carrier level.
But support for the measure, endorsed by most of the direct marketing industry, is fading in the House Government Reform Committee. Two of its members, Reps. Steven LaTourette (R-OH) and Henry Waxman (D-CA), say they will introduce their own versions of postal reform legislation when and if committee chairman Rep. Dan Burton (R-IN) schedules a vote on the bill.
LaTourette’s proposal, which has the support of USPS competitors such as United Parcel Service and other package shippers, would eliminate the provision for negotiated service agreements from postal reform. UPS and the others are against allowing the postal service to negotiate agreements with mass mailers because of the effect it would have on their businesses.
Waxman, however, reportedly plans to keep the service agreements in his bill.
Late last month LaTourette began circulating the draft of a bill that would eliminate negotiated service agreements from postal reform. Both LaTourette’s and Waxman’s bills would also prohibit the USPS from spinning off its products and services that compete with private industry into a private corporation run by the USPS.
Neal Denton, executive director of the Alliance of Nonprofit Mailers in Washington, DC, said the negotiated service agreements’ likelihood of becoming “the next battleground” of postal reform depends on whether the USPS is permitted to give price breaks to mailers based on volume or on increased work sharing.
The alliance would allow the USPS to negotiate service agreements with mailers only if they’re based on more work sharing, but would strongly oppose giving mailers reduced postage rates founded solely on the size of their mailings, Denton said.
Officials from both the Advertising Mail Marketing Association and the Mail Advertising Service Association, which represents direct marketing service bureaus and printers, said their groups had yet to decide if they will support allowing the service agreements.
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