USPS Raises Postal Rates

Magazine publishers and direct mail marketers got a lump of coal in their stockings over the holidays, with the Postal Regulatory Commission's decision to approve an “exigent rate increase” on postage for First Class Mail and Standard Mail, which includes magazines, catalogues, and direct mailings.

In response to a request from the USPS board of governors, the PRC voted 2-to-1 to approve a 4.3% increase in Standard Mail rates, which works out to 5.9% when the customary inflation adjustment is included, effectiveJanuary 26. Meanwhile, the price for First Class Mail stamp, for postage including letters, flats, and parcels under 13 ounces, will rise 6.5% from $0.46 to $0.49 on the same date.

The blow was softened somewhat by the PRC's proviso that the rate hike is only temporary, and should be phased out after two years, when the effects of the economic downturn are expected to have passed.

No surprise, the PRC’s decision still got a negative reaction from magazine publishers and direct mailers, who have previously argued that exigent increases are only intended to help the USPS cope with unforeseen emergencies, not long-term structural problems.

Mary G. Berner, the president and CEO of MPA, The Association of Magazine Media, stated: “This is a counterproductive decision by the PRC and it does nothing to fix USPS's systemic problems.  It will drive more customers away from using the Postal Service and will have ripple effects through our economy -- hurting consumers, forcing layoffs, and impacting businesses.”

For its part, the USPS board of directors have long countered that the economic downturn constitutes just such an unforeseen condition, justifying the exigent increase. The USPS has also pointed out that other attempts to cut costs and raise revenues --- for example, by temporarily waiving contributions to a future health care fund, closing smaller post offices, or allowing the delivery of alcohol through the postal system -- have all been stymied by Congress.

In November, the USPS scored a rare victory with the announcement of a deal with Amazon to enable Sunday delivery of packages from the online retailer.
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