US Postal rate hikes: Lobby now or pay later

In my first three attempts at reaching the U.S. Postal Service press office
for comment on its Board of Governors’ recent rate hike, I was passed on
by a bored-sounding receptionist to a line that rang perhaps a dozen times-with
no answer. My fourth try got me patched into a press rep’s voice mail. I left
an urgent reporter-on-deadline message, which was never returned. It was a
telling experience that reflects a listless bureaucracy burdened by
a $3 billion shortfall and an indifferent board. It is an experience
shared by the Direct Marketing Association and American Business Media, both of
which lobbied strongly against the USPS’ plan to raise rates. The USPS is in
sorry shape and views postal rate hikes as its path to profitability. Make no mistake: Further rate hikes will no doubt put some direct marketing agencies and publishers, upon which the USPS relies for most of its revenue, out of business. Surviving the private sector slowdown should be the foremost concern of direct marketing and publishing companies. Priority No. 2, however, should
be aggressive lobbying against the USPS Board of Governors’ next rate hike,
which could be as high as 25%. The USPS vote is scheduled for this summer. The
DMA and ABM have lobbied Congress on postal reform, collectively spending
more than $1 million fighting the most recent rate hikes. Their commitment
to the matter is undisputed. What’s less certain is the commitment of these
associations’ for-profit direct marketing and publishing members. Here is why the membership must pay attention and head off the agency’s next move, one that could well determine whether the current publishing slowdown turns into a recession. For publishers, each percentage point increase in postal rates translates into a $20 million hit on the industry’s pocketbook, according to the
Magazine Publishers of America. The most recent hike-an average of 2.6% for
periodicals-equals $52 million, a real blow for an industry already
reeling from an ad shortfall. A 25% hike would equal $500 million, which could
prove the death knell for many magazines. For direct marketing agencies, the
implications of another rate hike are as onerous. This is particularly so for smaller companies or those without established e-marketing divisions that could help offset a marked dip in offline business. Washington can seem a far-off place for businesses obsessed with retaining clients. But private-sector executives who ignore happenings at the USPS are as guilty of gross mismanagement as the government agency’s leaders.
Direct marketing and publishing leaders should follow the leads of the DMA and
ABM-with both their voices and their money. Page 9;Volume 86 THIS IS THE
FULL TEXT: COPYRIGHT 2001 Crain Communications, Inc. COPYRIGHT 2001 Gale
GroupB TO B, 28th May 2001