DMA opposes USPS hike

The US Direct Marketing Association (DMA) has said it strongly opposes USPS’s request for a rate increase. USPS announced the proposals this week.

The DMA believes that a postal rate increase at this time will cause mail volumes to decrease even further, and irreparably harm the financial viability of the Postal Service going forward.

“We question the need for a rate increase at this time, and strongly believe that it will further damage the economic viability of the Postal Service,” said Linda Woolley, DMA’s executive vice president for government affairs.  “The increase is not in the public interest, and ultimately, would have a devastating effect on any economic recovery since marketers rely heavily on mail to deliver offers, as well as products, to customers.”

A DMA statement said: “The Postal Service’s rate increase request proposes to raise rates an average of 5.6%, but in order to reach that average, the increase on some mailers will be dramatically higher. The proposed increase for small parcels, for example, is 23.3%, something that would be devastating to many companies.  A rate increase would force business mailers to look for alternative methods of communications. These increases will hasten efforts by mailers to shift to other channels of communications.

“The DMA strongly questions the assumptions underlying the Postal Service’s request for a rate increase, namely that it will generate some $2.3bn in new revenue over a 9 month period.  In the period following the last rate increase in May 11, 2009, in the next year, mail volume decreased by an additional 5% (above the previous 13%) and DMA strongly believes that this new increase would have the same, if not a more dramatic, effect, and drive away even more business mail, which accounts for some 85% of the Postal Service’s revenue.”