WASHINGTON, March 2 /PRNewswire/ -- When the Postal Regulatory
Commission (PRC) issued its recommendations for postage rate increases on
February 26, the Direct Marketing Association (DMA) expressed its
appreciation for the efforts of the PRC to keep its overall recommendations
below the levels originally proposed by the US Postal Service (USPS).
However, after a thorough review of the 700-page document, DMA is today
expressing its deep disappointment over specific recommendations that would
increase postage costs for catalog mailings by as much as 40 percent in
"This is a case where the devil really did prove to be in the details,"
said DMA President & CEO John A. Greco, Jr. "In our analysis of these
recommendations, it has become clear that in addition to the increased
burden for many nonprofit mailings, the outrageous rate increases proposed
for many types of flat mailings are far in excess of what had been expected
by the mailing community, and are certain to ultimately cause a serious
decline in mail volumes and a negative ripple effect for consumers,
businesses, and the economy."
"The reduction in mail volume alone might well be enough to send the
Postal Service into a death spiral of reduced revenues, halts to
infrastructure improvements, and increases in postage rates for all classes
of mail," Greco added.
The PRC recommendations for flat-shaped mail proved to be much higher
than those originally requested by the Postal Service when it filed its
omnibus rate case on May 3, 2006. According to the USPS, more than 53
billion "flats" were mailed in 2006, accounting for 8 percent of all
First-Class mail, 17 percent of Periodicals, and 75 percent of Standard
"It is unfortunate that this PRC decision represents 'old think' rather
than 'new think,'" added Greco. "One of the key principles of postal reform
-- sought by the mailing community and embraced by Congress -- was the need
for predictability in future rate increases. Now, just weeks after postal
reform was enacted into law, the PRC is undermining the spirit of postal
reform and Congressional intent by making recommendations that will
generate the very 'rate shock' that we have sought to avoid."
"On Monday, we expressed concern that the Postal Service might be
moving too far and too fast, without giving mailers a chance to adequately
prepare," said Jerry Cerasale, DMA's senior vice president for government
affairs. "After digesting the details, we are certain that the PRC is
moving much too far and much too fast with rates that will be ruinous for
many postal customers. Any responsible policy should allow for a gradual
Cerasale also noted that since the early 1990s, when the USPS
originally announced its intention to adapt mailing rates to reflect the
cost differential between letter-size and flat-size mailings, the USPS has
been making those changes gradually, so as not to place an undue burden on
the mailing community. "Now the PRC seems to be abandoning that approach
just as the Postal Service is investing more than $874 million to make its
flats-sorting system more cost-effective," he said.
The presidentially-appointed members of the USPS Board of Governors
could approve the PRC's recommendations quickly, and mailers have only
until Thursday, March 8 to fax comments to the Governors. Therefore, DMA
today is calling on its members to immediately fax letters to the Governors
expressing their concerns.
"Every catalog mailer should let the Postal Service and its Governors
know that the proposed rates for flats are completely unacceptable to the
mailing community, and will have a negative effect -- not only on mail
volumes, but on the ability of catalog mailers to communicate with their
customers and conduct their business," said Greco. "The long-term results
of these ill-advised recommendations could be detrimental to many American
businesses and ultimately to our economy as a whole."
Mailers should send their comments via fax to:
The Honorable James C. Miller III
Chairman, Board of Governors
United States Postal Service
Copies should be faxed to both:
The Honorable Dan G. Blair
Postal Regulatory Commission
Director, Public Affairs
Direct Marketing Association
About Direct Marketing Association (DMA)
The Direct Marketing Association (http://www.the-dma.org) is the
leading global trade association of businesses and nonprofit organizations
using and supporting multichannel direct marketing tools and techniques.
DMA advocates industry standards for responsible marketing, promotes
relevance as the key to reaching consumers with desirable offers, and
provides cutting-edge research, education, and networking opportunities to
improve results throughout the end-to-end direct marketing process. Founded
in 1917, DMA today represents more than 3,600 companies from dozens of
vertical industries in the US and 50 other nations, including a majority of
the Fortune 100 companies, as well as nonprofit organizations.
In 2006, marketers -- commercial and nonprofit -- spent $166.5 billion
on direct marketing in the United States. Measured against total US sales,
these advertising expenditures generated $1.93 trillion in incremental
sales. Last year, direct marketing accounted for 10.3 percent of total US
GDP. Also, there are today 1.7 million direct marketing employees in the US
alone. Their collective sales efforts directly support 8.8 million other
jobs. That accounts for 10.5 million US jobs.
The Power of Direct: Relevance. Responsibility. Results.
SOURCE Direct Marketing Association