Mailers react to USPS’s veto of rate relief

The mailing community is disappointed that the Governors of the U.S. Postal Service failed to provide relief for the millions of commercial mailers who are being hit with massive, unplanned increases in postage costs.

The Postal Regulatory Commission’s “Second Opinion and Recommended Decision on Reconsideration,” issued May 25, established a transitional temporary rate reduction of 3 cents for all Standard Mail Regular flats and 2 cents for Standard Regular nonprofit flats. In a vote during the Board of Governors’ closed meeting on June 19, the Governors decided not to implement the temporary change.

On March 19, the Governors asked the PRC to reconsider some of the prices originally recommended on Feb. 26 and implemented on May 14 because they were concerned that price increases recommended by the PRC may impose an unnecessary degree of “rate shock” on the catalog industry and small businesses particularly. The recommended increase for some catalog mailers is as much as 40 percent, which is more than double what the USPS proposed.

Mr. Cerasale noted that a ripple effect is already being felt by flat-shaped mailers as well as by the downstream companies that provide mailing services and supplies.

In its reconsideration proposal, the USPS had asked for a 3-cent reduction in piece rates for Standard Regular flats offset by a 0.7 cent increase in piece rates for most Standard Mail Regular letters. The USPS reasoned that this was appropriate because under the breakeven requirement of the Postal Reorganization Act, lower rates for similar categories must be offset by higher rates for others.

“We appreciate the [PRC’s] thorough review of this matter and its creative recommendations to implement temporary rate reductions for mailers of Standard Mail flats,” James C. Miller, chairman of the USPS Board of Governors, wrote in the final decision. “We are concerned, however, that approving those recommendations would not be legally sound or practically prudent.”

Mr. Miller said the approach suggested by the [PRC] would result in breakeven within the test year, if the effective dates for selected rate changes were changed outside of the test year.

Mr. Miller said the PRC estimated that the cost to the USPS of its recommendation would be $100 million.

Another issue was the difficulty in implementing the PRC’s recommendation.

Despite these issues, the American Catalog Mailers Association echoed the DMA’s sentiments.

ACMA is asking catalogers to reach local and national postal representatives with catalogers’ unique needs and benefits to the system as a whole. The organization plans to create packages to assist them in reaching out to both the mailing community and their elected officials to publicize the industry’s interests.