Live from the National Postal Forum: PMG Confirms 5%-6% Rate Hike Likely

Nashville, TN–A keynote address that included images on five plasma TV screens, elaborate slide presentations, a video, and even a short performance from a local band kicked off the 2005 National Postal Forum at the Opryland Hotel and Convention Center here on March 21. More exciting than the bells and whistles, though, was Postmaster General John Potter’s confirmation that next year’s postal rate hike would likely average no more than 6%–far smaller than had earlier been speculated.

An enthusiastic Potter reminded the nearly 6,000 attendees of the resilient nature of mail marketing and that in a growing economy people will always turn to postal mail as a means of communicating. Potter cited Blockbuster and Wal-Mart as two companies that have begun to use direct mail in their marketing plans, and Dell and eBay as two that effectively combine postal mail and e-mail.

Potter also tracked the progress of “the postal transformation plan,” which began in 2002. With the first phase of the plan due to conclude later this year, Potter said he was encouraged that the upcoming increase, to be implemented next year, would be between 5% and 6% on average. A rate increase could have been avoided, he said, were it not for Public Law 108-18, which mandates the establishment of an escrow account that produced a deficit of $3.1 billion–none of which may be used to offset postal operating expenses. Nonetheless, he remained optimistic that the escrow situation could be solved long before 2010, the year that the transformation plan is scheduled to conclude.

Joining Potter in his keynote address was James Miller, chairman of the postal board, and John Nolan, deputy postmaster general. Miller spoke of the battles the USPS has had with Congress. “We have been urging them to let us run the Postal Service like a business,” Miller said. He reminded attendees that the USPS is the fourth largest business enterprise in the world and the 27th largest in overall revenue.

Nolan summed up his thoughts in one precise question, “How do we make the best use of all of our resources?” He identified three areas –IT support, purchasing, and USPS.com—where the agency has made great strides. “We need to look at this as a partnership. It’s not about the Postal Service – it’s about the entire mailing industry,” said Nolan, who will retire next month.

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