DMA Calls for End to Politics-as-Usual and Urges Congress to Reform USPS

GAO 'High-Risk' List and Saturday Mail Elimination Proposal Are Latest Signs

Congress Needs to Reform USPS Legislation Now



Apr 04, 2001, 01:00 ET from The Direct Marketing Association

    NEW YORK, April 4 /PRNewswire/ -- The Direct Marketing Association (The
 DMA) announced today its support of Chairman Dan Burton's (R-IN) House
 Government Reform Committee hearing to review the finances and operations of
 the United States Postal Service (USPS). This hearing is the first step from
 the new 107th Congress toward, what is hoped will be, a bi-partisan effort in
 reforming the 31-year-old law that has put a financial straitjacket on the
 USPS's ability to compete and survive.
     Two separate, recent announcements from the General Accounting Office
 (GAO) and from the USPS underscore the major problems in which the USPS finds
 itself unless there is immediate and comprehensive legislative reform. By
 being placed on the GAO's 'high-risk' list, the USPS has essentially gained
 junk bond status.
     "Chairman Burton is to be congratulated for putting the interests of
 American consumers and businesses who rely on the Postal Service ahead of
 politics-as-usual and confronting the problems plaguing the Postal Service
 because of an out-of-date federal law," said H. Robert Wientzen, president &
 CEO, The DMA. "Congress must act now to rescue the Postal Service. Without
 legislative reform, the Postal Service will go the way of the horse and
 buggy," Wientzen said.
     "The DMA continues to call for reform of the 1970 law that shackles the
 USPS's ability to compete in a 21st century economy," added Ed Gleiman of The
 DMA, who served as Chairman of the Postal Rate Commission (PRC) and who now is
 spearheading The Direct Marketing Association's campaign for congressional
 postal reform. "The USPS must be granted the ability to be financially viable,
 especially in this era when there are so many competitive options."
     "The many American businesses and charitable organizations that have, for
 over a century, relied on the Postal Service for affordable, reliable and
 universal delivery services are going to pay dearly," Wientzen said. "This is
 all the more alarming in light of the current economic downturn."
     Compounding the image problem created by being placed on the "high-risk"
 list, the USPS is also considering eliminating Saturday mail delivery to cut
 operating costs in the face of stiff electronic and private sector competition
 and mounting losses, which could reach $2 billion to $3 billion this fiscal
 year, which ends this September.
     "The DMA is dismayed at the continued, rapid disintegration of the
 financial condition of the Postal Service," Wientzen said.
     "The current financial situation -- as exemplified by inclusion on the
 'high-risk' list, the consideration of eliminating Saturday delivery, and talk
 of a double-digit rate case being filed this June or July -- shows how fragile
 the Postal Service is to volume and economic changes," said Gleiman.
     "If there ever was a time to find solutions to updating the 31-year-old
 federal statute under which the USPS operates, it is now," Gleiman added.
     Antiquated legal hurdles as well as the continued loss of market share to
 electronic communication channels and private sector package delivery
 companies are adding to the USPS' woes. "Raising rates to make up for
 reductions in mail volume is counterintuitive and a sure-fire way for the
 Postal Service to drive itself out of business," Gleiman said.
     "Fewer and fewer Postal Service customers will be able to afford the
 increases or will be willing to tolerate its reduction in services," Wientzen
 said. "The erosion of its customer base to other media, especially the
 Internet, will proceed at an alarming pace. The USPS must change soon -- or it
 will be too late," Wientzen added.
     "The Postal Service needs flexibility to meet market demands and to
 control costs," Gleiman said. "These are two mechanisms that the 1970 Postal
 Reorganization Act limits. Unlike its competitors, the Postal Service lacks
 the ability to effectively control labor costs, which represent more than
 80 percent of the Postal Service's expenses despite the billions they have
 spent over the past decade on automation equipment," Gleiman added.
     "The members of The DMA need a financially robust Postal Service, and The
 DMA is committed to work with the Administration, the Congress, Postal Service
 officials and the mailing community to get the legislative reform that is
 imperative if the Postal Service is to survive in the Digital Age," concluded
 Wientzen.
 
     The DMA is the leading and largest trade association for businesses
 interested in interactive and database marketing, with nearly 5,000 member
 companies from the United States and 53 other nations.  Founded in 1917, its
 members include direct marketers from every business segment as well as the
 nonprofit and electronic marketing sectors.  Included are catalogers, Internet
 retailers and service providers, financial services providers, book and
 magazine publishers, book and music clubs, retail stores, industrial
 manufacturers and a host of other vertical segments, including the service
 industries that support them.  According to a DMA-commissioned study, direct
 and interactive marketing sales in the United States exceeded $1.7 trillion in
 2000, including $110 billion in catalog sales and $24 billion in sales
 generated by the Internet.  The DMA's Web Site is http://www.the-dma.org and
 its consumer Web site is http://www.shopthenet.org.
 
 

SOURCE The Direct Marketing Association
    NEW YORK, April 4 /PRNewswire/ -- The Direct Marketing Association (The
 DMA) announced today its support of Chairman Dan Burton's (R-IN) House
 Government Reform Committee hearing to review the finances and operations of
 the United States Postal Service (USPS). This hearing is the first step from
 the new 107th Congress toward, what is hoped will be, a bi-partisan effort in
 reforming the 31-year-old law that has put a financial straitjacket on the
 USPS's ability to compete and survive.
     Two separate, recent announcements from the General Accounting Office
 (GAO) and from the USPS underscore the major problems in which the USPS finds
 itself unless there is immediate and comprehensive legislative reform. By
 being placed on the GAO's 'high-risk' list, the USPS has essentially gained
 junk bond status.
     "Chairman Burton is to be congratulated for putting the interests of
 American consumers and businesses who rely on the Postal Service ahead of
 politics-as-usual and confronting the problems plaguing the Postal Service
 because of an out-of-date federal law," said H. Robert Wientzen, president &
 CEO, The DMA. "Congress must act now to rescue the Postal Service. Without
 legislative reform, the Postal Service will go the way of the horse and
 buggy," Wientzen said.
     "The DMA continues to call for reform of the 1970 law that shackles the
 USPS's ability to compete in a 21st century economy," added Ed Gleiman of The
 DMA, who served as Chairman of the Postal Rate Commission (PRC) and who now is
 spearheading The Direct Marketing Association's campaign for congressional
 postal reform. "The USPS must be granted the ability to be financially viable,
 especially in this era when there are so many competitive options."
     "The many American businesses and charitable organizations that have, for
 over a century, relied on the Postal Service for affordable, reliable and
 universal delivery services are going to pay dearly," Wientzen said. "This is
 all the more alarming in light of the current economic downturn."
     Compounding the image problem created by being placed on the "high-risk"
 list, the USPS is also considering eliminating Saturday mail delivery to cut
 operating costs in the face of stiff electronic and private sector competition
 and mounting losses, which could reach $2 billion to $3 billion this fiscal
 year, which ends this September.
     "The DMA is dismayed at the continued, rapid disintegration of the
 financial condition of the Postal Service," Wientzen said.
     "The current financial situation -- as exemplified by inclusion on the
 'high-risk' list, the consideration of eliminating Saturday delivery, and talk
 of a double-digit rate case being filed this June or July -- shows how fragile
 the Postal Service is to volume and economic changes," said Gleiman.
     "If there ever was a time to find solutions to updating the 31-year-old
 federal statute under which the USPS operates, it is now," Gleiman added.
     Antiquated legal hurdles as well as the continued loss of market share to
 electronic communication channels and private sector package delivery
 companies are adding to the USPS' woes. "Raising rates to make up for
 reductions in mail volume is counterintuitive and a sure-fire way for the
 Postal Service to drive itself out of business," Gleiman said.
     "Fewer and fewer Postal Service customers will be able to afford the
 increases or will be willing to tolerate its reduction in services," Wientzen
 said. "The erosion of its customer base to other media, especially the
 Internet, will proceed at an alarming pace. The USPS must change soon -- or it
 will be too late," Wientzen added.
     "The Postal Service needs flexibility to meet market demands and to
 control costs," Gleiman said. "These are two mechanisms that the 1970 Postal
 Reorganization Act limits. Unlike its competitors, the Postal Service lacks
 the ability to effectively control labor costs, which represent more than
 80 percent of the Postal Service's expenses despite the billions they have
 spent over the past decade on automation equipment," Gleiman added.
     "The members of The DMA need a financially robust Postal Service, and The
 DMA is committed to work with the Administration, the Congress, Postal Service
 officials and the mailing community to get the legislative reform that is
 imperative if the Postal Service is to survive in the Digital Age," concluded
 Wientzen.
 
     The DMA is the leading and largest trade association for businesses
 interested in interactive and database marketing, with nearly 5,000 member
 companies from the United States and 53 other nations.  Founded in 1917, its
 members include direct marketers from every business segment as well as the
 nonprofit and electronic marketing sectors.  Included are catalogers, Internet
 retailers and service providers, financial services providers, book and
 magazine publishers, book and music clubs, retail stores, industrial
 manufacturers and a host of other vertical segments, including the service
 industries that support them.  According to a DMA-commissioned study, direct
 and interactive marketing sales in the United States exceeded $1.7 trillion in
 2000, including $110 billion in catalog sales and $24 billion in sales
 generated by the Internet.  The DMA's Web Site is http://www.the-dma.org and
 its consumer Web site is http://www.shopthenet.org.
 
 SOURCE  The Direct Marketing Association