• by Joe Mandese  @mp_joemandese, February 27, 2007

Magazines and other periodicals distributed via mail are facing higher costs and potentially thinner margins as a result of new postal rate increases, but the hike is not nearly as bad as some publisher industry executives might have feared.

"As postal rate cases go, this has been a tough one, with even more varying points of view than in recent cases," Gordon Hughes, president-CEO of American Business Media, said Monday in a statement released by the trade association following the Postal Regulatory Commission's decision to boost rates as much as 18.3%.

"More analysis is necessary, but it appears that the efforts of our Washington counsel and our testifying members have prevented 20% and higher increases that would have resulted from the other proposals," Hughes noted.

Based on the new rate structure, the price of a one-ounce, first-class rate will increase two cents to 41 cents vs. the 42 cents the postal service originally asked for. The commission granted an 11.7% increase for out-of-county periodicals, and approved an 18.3% increase for in-county periodicals. The postal service had sought a 24.4% increase for in-county periodicals.

The decision moves further in the direction of "cost-based rates" by recommending rates that take into account bundles, sacks and pallets, not just pieces and pounds.