Mailers Face a May Postal Hike Feb 12, 2008 9:23 AM
, By Larry Riggs and Jim Tierney
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The U.S. Postal Service, in its first increase under the new postal
reform rules, will raise its rates on May 12 by low single-digit
percentages.
“Based upon our preliminary review, the
average rate increase for standard mail is slightly less than 2.9%,
which is equal to the rate of inflation over the last 12 months,” said
Jerry Cerasale, the Direct Marketing Association’s senior vice
president for government affairs, in a statement.
Even more critically, catalogers apparently are being spared the worst.
For standard mail flats as a whole, the
increase is about 1.67%. However, for the non-carrier route flats, the
category that experienced the largest increase last year, the hike is
only 0.86%, said USPS spokesperson David Partenheimer.
Cerasale lauded the USPS for keeping the
increases in line at a time when catalog mail volume has fallen 13%
below the level of this time last year.
Catalogers were hit hardest in last year’s postal rate case, with many facing increases from 20% to 40%.
On the direct mail side, the new rate for a
five-digit automated letter weighing 3.3 ounces or less is $0.225. A
similar letter weighing more than that will cost $0.733. A
non-automated letter weighing 3.3 ounces or less will rise to $0.343.
Meanwhile, the price of a first class stamp will jump from 41 cents to 42 cents. For the full rate schedule, click here (www.usps.com/prices/).
But mailer advocates warned that some mailers may be hit worse than others.
“In each class they have the flexibility to
raising certain subclasses of products higher and some less than the
Consumer Price Index so that the average across the board is 2.9%,”
said Tony Conway, executive director of the Alliance of Nonprofit
Mailers.
However, Conway said he preferred this new
system created under the Postal Accountability and Enhancement Act
(PAEA) to the previous one. In the rate hike in 2007, some nonprofit
mailers experienced rate hikes as high as 200%, he said.
“The rate increase will go into effect without
mailers having to spend tens of thousands of dollars to participate in
a rate case,” agreed Bob McLean, executive director of the Mailers
Council.
McLean noted that while the current rate of
inflation may exceed 2.9%, the PAEA uses the inflation rate of the past
quarter or two to determine the rate of inflation on which to base
postal hikes.
“Any increase is significant to mailers, and
nobody’s happy about this but it certainly is easier to plan for,” he
said. “The Postmaster General told mailers several months ago to expect
an increase in May or June and this is a far better system than the one
we had prior to the passage of postal reform.”
Cerasale added that the DMA is “pleased that
these postal rate changes do not portend the time-consuming and costly
litigation of an old-style rate case.”
Are there any quibbles?
“Unfortunately they didn’t include the before
and after charts which are typically very helpful for us to look up
individual rates and see how much they went up and what they were
before,” Conway said. He predicted that he and his staffers would have
a busy night crunching numbers.
