Who do catalogers have to thanks for the relatively slight postal rate hike announced yesterday? The American Catalog Mailers Association—at least according to ACMA executive director Hamilton Davison.
The perception in Washington is that “catalogers fared much better than others,” Davison says. “Our initial assessment is that catalogers got an increase about 1% lower than those levied on other mailers.”
In fact, in a mailing industry meeting when the rates were announced, the ACMA, which formed less than two years ago, received many congratulatory messages from other interests and postal policy makers, Davison says. “One senior policy maker mentioned ‘catalogers would have certainly received the CPI-capped maximum had it not been for [ACMA’s] work.’’’
The U.S. Postal Service announced that price increases for Standard Mail Flats—the category affecting most catalogers—would stay below the Consumer Price Index or rate of inflation, which was 3.8% for 2008. Under the Postal Reform bill passed in late 2006, rate hikes starting as of 2008 are now capped to the CPI.
The average increase for the Standard Mail Flats is 2.3%, while the average rate hike for carrier route flats is 4.3%. The increases take effect May 11. The increase for catalogers is higher than last year’s average of 1%, but much less than the major hike of 2007 that boosted some catalog rates by up to 40%.
During a Feb. 11 postal teleconference, Stephen M. Kearney, senior vice president, customer relations, for the USPS, addressed the ACMA’s role in the price-setting process. “The ACMA played a good coordinating role in bringing actual owners of catalog businesses to us.”
Also, Kearney said, “we talked to other catalogers outside the ACMA and looked at a lot of data, including the large increase they received in 2007. A big determining factor was catalog mailers are so dependent on the mail for the core of their businesses and, within that context, they need to do prospect mailing to be able to grow their businesses and stimulate growth.”
While Davison applauds the pricing news for catalogers, he says it doesn’t change other mounting concerns. “After the fundamental disruption to catalog mailing economics, a below average increase is welcome, but not curative,” he says.
Because of the economy and cost pressures, catalogers will continue to invest in cost effective alternative media whenever possible, “removing further mail out of the USPS,” Davison says. “ACMA has been very active with USPS officials discussing ways to fix the catalog industry. While this rate change does nothing to stimulate incremental mail volume, moderating further increases is a good start.”
Given the “unprecedented amount of declining volume,” Kearney admitted the catalog industry is “seriously hurting” in this economy. And the USPS takes into account the state of the economy when it makes these decisions, he said. “For financial reasons, we absolutely need to raise our prices this year.”