The U.S. Postal Service will file for a rate increase that would boost overall rates by nearly 9%.
The Postal Service’s Board of Governors unanimously approved he filing of this rate case at its monthly meeting Monday.
Details about proposed increases in Standard A Mail and other rates relevant to direct marketers were unclear yesterday.
Despite the fact that postal rates already rose twice this year and that the USPS just last week laid off at least 800 managerial positions, the postal service still faces a deficit of $1.6 billion this year, said BOG chairman Robert F. Rider.
The Direct Marketing Association expressed “its extreme disappointment and strong opposition”” with the BOG’s request for a third postage rate increase in 18 months.
The DMA argued that the increase could “cost U.S. consumers and businesses an additional $5.6 billion in an already slowing economy, on top of the almost $3 billion worth of increases implemented earlier this year.”
In addition, DMA President H. Robert Wientzen said in an interview that he was astounded the USPS chose today, “at this time of crisis in our government,” to announce a rate case filing. “It absolutely blows my mind.”
In a statement, Wientzen commented that “the postal service is writing a how-to book on driving customers away. In this slowed economy, instead of looking at ways to pass along increases to its customers, the Postal Service needs to focus on cost cutting as a way to remain viable while maintaining its customer base.”
“Both the timing and size of this increase are troubling,” added Jerry Cerasale, senior vice president, government affairs. “This could have ripple effects throughout the entire economy. The average consumer may also be asked to pay even more if the postal service’s biggest customers head for less expensive alternatives, which would still represent an increase in costs. Therefore increasing prices for consumers.”
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