White Plains, NY—In his luncheon speech at list firm Direct Media’s annual Client Summit & Co-op on July 17, Direct Marketing Association president/CEO Bob Wientzen likened postal rate hikes to Band-aids. Postal reform, he emphasized, was needed to return the U.S. Postal Service to good health.
Wientzen pointed out that the latest DMA estimates show the U.S. Postal Service will lose $17 billion in revenue to Internet alternatives between 2003 and 2008. He added that the buzz in Washington has the USPS filing for a new rate case in October or November this year, with a likely hike next fall. “But delaying the filing until January is conceivable,” he said, “because the USPS is interested in getting some good news out there.” The agency has lowered its previous annual loss estimate from as much as $3 billion to possibly less than $1 billion, which could help it stave off another rate hike for a few months.
As for the size of the next rate increase, Wientzen said that the agency is reportedly leaning toward a whopping three-cent increase on the first class stamp, bringing the price to $0.37, to bring in $3 billion of the $7 billion the agency will seek in overall revenue gains. Standard mail, the class most used by catalogers, would likely pick up the lion’s share of the rest of the $4 billion.
Wientzen noted that Rep. John McHugh (R-NY), who has written two postal reform bills since 1996 that have failed to make it to the floor of the House, will likely introduce a new reform bill this summer. “Postal rate hikes are nothing more than Band-aids on a gaping problem,” Wientzen said, adding that mailers need to help push reform.