Postal reform: Will it take a fire?

It’s a given that conventional mailboxes will be a lot less crowded in the new millennium. Consider the following items:

The Internet could eventually usher in a day when almost all those envelopes will contain advertisements, and the majority of mail people really care about will come in packages. The rest – letters, bills, money, and even photographs – will arrive through the computer, mail experts agree. Already, according to Jupiter Communications, Americans are sending 122 billion e-mails annually, more than half the number of pieces of mail that the Postal Service handles each year. – New York Times, Nov. 14, 1999

The Government Accounting Office testified before the House Postal Service Subcommittee that by 2003 the USPS will lose $17 billion as a result of a decline in first class mail volume. This represents 27% of its total revenue. – Direct Marketing Association, Talking Points on Postal Reform

This smoking evidence indicates that the Postal Service will certainly face problems – or even disaster – in the next decade should the volume of first class mail plummet. Thus it would seem that logic would prevail and the task of addressing postal reform and fixing the problem of losing mail volume would now move ahead.

As catalogers, our own interests are clearly at stake, since it seems certain that flats/Standard A postal rates will have to rise just as dramatically as first class volume and revenue decline. For many catalogers, increased postal rates would mean fewer and smaller mailings, which would then cause a further downward spiral in USPS volume, and then even higher rates…a doomsday scenario.

But true postal reform, to quote an anonymous expert in Washington, is “as unlikely as ice in hell.” Moreover, this expert noted that as it stands, the Postal Modernization Act (H.R. 22), the postal reform bill sponsored by Rep. John McHugh (R-NY), is almost useless in solving the problem. H.R. 22 has gone through so many revisions and compromises to make it palatable to various parties that the original postal reform concept has become watered down.

So what went wrong?

The key concept in postal reform had been that the USPS would operate like private enterprise, setting its own course in a newly established competitive environment. It sounded great, but the idea was a huge leap of faith and a big risk. When souls were searched, there was little faith that a long-standing semigovernmental bureaucracy such as the USPS could transform itself into a private enterprise.

Every industry interest group, including our own DMA and the Advertising Mail Marketing Association (AMMA), feared that their postal rates were at risk and sought safeguards in the legislation. The result was H.R. 22, a bill that no one loved enough to really fight to get it passed.

In fact, some industry observers have called H.R. 22 “better than no reform at all.” That’s hardly inspiration to take on the long and expensive fight required to overhaul the U.S. Postal Service. And it didn’t help that several well-financed opponents were waiting to do battle against H.R. 22 – including parcel carriers, publishers, and unions.

Our white knight and champion of postal reform, Rep. McHugh, must sense the weak commitment of the compromise coalition. A loss in a floor vote on H.R. 22 could hardly help his reelection. What’s more, I suspect there’s a strong possibility that McHugh will move on to a more “important” – that is, a more desirable, more voter-friendly – committee than postal if he’s reelected this year.

Sounding the alarm

Moreover, our own DMA members have shown little interest in postal reform. At the DMA annual conference and exhibition in Toronto this past October, the DMA staffed an information center on the topic, but few of the delegates visited. I note also that the topic of postal reform keeps moving lower and lower on the agenda of the DMA board and on other committee agendas.

It now seems that it will take more than heavy smoke to realize reform. Perhaps only a raging fire – a postal disaster such as 30%-plus rate increases in Standard A mail and flats – will encourage reform. Some catalogers may not blink at the prospect of such rate hikes, betting that Internet marketing will provide salvation by reducing our dependency on catalog mailings. But most of us know that’s not the case.

I, for one, am sad to admit that we cannot rally enough interest and support in our own direct marketing ranks to realize postal reform before the fire. If anyone shares my opinion, call Bob Wientzen at the DMA (212-768-7277) and Gene Del Polito at the AMMA (703-524-0096) and tell them so. Your silence only confirms your acceptance of much higher USPS rates to come.

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