Cataloger Seeks Credit Terms from USPS

Could the U.S. Postal Service begin granting credit terms to mailers? It will if Chris Bradley, president/CEO of Portland, ME-based bedding catalogerCuddledown, gets his way.

On March 9, Bradley testified before the U.S. Senate Committee on Governmental Affairs on Postal Reform and, among other reforms, urged that the USPS be given the flexibility to extend credit terms to commercial mailers. “The Postal Service must grow the volume of mail, and the only way to do that is to be competitive in today’s business world,” Bradley said in his testimony.

“Cuddledown buys goods and services from hundreds of suppliers, yet the only supplier that does not extend us open credit terms is the U.S. Postal Service,” Bradley continued. “Trade credit is the lubrication that keeps the business world running and growing.”

Cuddledown mails catalogs 18 times each year. “The postage is removed electronically from our corporate checking account on Friday, the catalogs begin to move on Monday, and begin arriving in our customers’ homes the following Monday,” Bradley said. “Our average catalog is delivered 12 days after payment has been made. The only competitive part of this process is the electronic debit to our bank account – and that’s ironic because it saves us the postage cost of mailing our check.”

United Parcel Service, FedEx, and Parcel Direct give Cuddledown open terms, Bradley noted in his testimony. Cuddledown’s printer, color separator, photographers, and models all give trade credit. “When we buy down or fabric to make our comforters we have standard payment terms,” Bradley said.

“Paying in advance and waiting 12 days for your first results is a roadblock for any business, and especially a small business, Bradley said. “Cash flow is critical to a business and many decisions, especially the question of how many pieces to mail, revolve around the impact on cash flow. If commercial mailers could match the timing of their postage payments with the delivery of their mail, they could mail more volume – and they would.”

“Reform is clearly needed and the President’s Commission has outlined the reforms that need to be put in place. In reading the Commission’s report and published comments from other involved parties it seems clear to me that reform would include: S Elimination of the escrow account for overpayments into the federal civil service retirement fund S Shifting the obligation to pay for military service retirement from the Postal Service to the Treasury Department S Giving the Postal Service the ability to open and close processing plants and post offices to meet their business demands • Enabling the Postal Service to use pricing and other services as tools to grow their business

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