Letter Mailers Want Same Postal Break as Catalogers

Stating it is “not unsympathetic to the economic difficulties catalog mailers are facing,” Bank of America told the Postal Regulation Committee that letter mailers deserve the same sort of break when the U.S. Postal Service decides on its next cost increase.

“These same [economic] challenges currently face all companies,” Bank of America said in its March 2 comments. “Thus, the consideration of the effect of price increases is shared by letter mailers as well as catalog mailers.”

Bank of America said the arguments that catalog volumes are sensitive to postage costs and responses to catalog solicitations result in more mail volumes are not unique.

“While it is true that catalog volumes are affected by postage costs and that catalogs exhibit some multiplier effect, these two factors are also shared by many postal products, including standard mail letters,” Bank of America said. “Because these statements are generally true of all marketing mail, they cannot justify mitigating catalog rates at the expense of other standard mail.”

The filing by Bank of America included USPS figures that standard mail flats volume losses in the first quarter of fiscal 2009 were about 17.3%, while standard mail letter volume declined 12.8%.

The American Catalog Mailers Association fired back with its own comments to the PRC. “The Commission must be very careful in making any changes to standard mail letter and standard mail flats rates because of the large disparity in the volumes of letters and flats,” wrote ACMA executive director Hamilton Davison. “Reducing the 2009 Standard Mail letter rate as requested by Bank of America could result in several cents increase for flats.”

Davison pointed that this would have “a disproportionate and highly negative effect on catalogers,” who out are still trying to recover from the 20% to 40% postal increase in May 2007.

Catalog merchants cannot be complacent when it comes to future mailing increases, Davison, and they shouldn’t need a reminder about what happened with postage just two years ago.

“The Bank of America filing is a very obvious signal that other mailing interests are gunning for catalogers,” Davison says. “The history is clear: Either catalogers band together to impact the outcome in postal rates and other regulations that affect them, or the other mailing interests will continue to take advantage of their absence.”

Direct mailer Valpak also told the PRC that it’s going easy on catalogers for a second-straight year, and that it felt it was unfair to moderate the increase for catalogers. Valpak declared in its March 2 filing that standard mail flats are being delivered “below cost.”

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