DMA Calls on Members to Protest Exorbitant, Unexpected Postage Rate Recommendations

Mar 02, 2007, 00:00 ET from Direct Marketing Association

    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
 some instances.
     "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
       Fax:  202-268-5472
     Copies should be faxed to both:
       The Honorable Dan G. Blair
       Postal Regulatory Commission
       Fax:  202-789-6886
       Stephanie Hendricks
       Director, Public Affairs
       Direct Marketing Association
     About Direct Marketing Association (DMA)
     The Direct Marketing Association ( 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