Ad-Hoc Mailers’ Group Takes Postal-Rate Complaints to Congress
Just when the magazine industry thought that the postal rate debate was over, and smaller publications were resigning themselves to significantly higher rates, the topic has emerged from the dead-letter file.
A group of periodical mailers, printers and their associations, led by political journal The Nation, are going before Congress on October 3 to “raise a ruckus and get the attention of the Postal Service,” in the words of John Bell, CEO of Ovid Bell Press and a leader of the group.
The rate increase that went into effect in July for magazine mailers was intended by the United States Postal Service to be a move toward rates based on true costs. It therefore favors mailers that can mail in volume, or those that handle more of the mail themselves, or those that can mail large amounts into a given destination.
Naturally, this favors mass magazines and causes short-run magazines to adopt co-mailing and co-palletization schemes, among other approaches, to reduce their per-piece costs. But the effect drastically penalizes short-run publishers far beyond their true cost of mailing,
“What really triggered me was two of our customers had 56 percent rate hikes,” he says. “There is a shifting of burden here that does not represent true cost. Many of our customers are co-mailing and going through the co-palletization, but there are still substantially higher costs. You can’t claim cost-based pricing when the end result is still higher.”
The group includes The Nation, Ovid Bell Press, Quebecor World, R.R. Donnelley, the American Catalog Mailers Association, the Printing Industries of America/Graphic Arts Technical Foundation and American Business Media, although some of the associations appear to be cautious about appearing to be part of a “coalition.”
Members of the group will testify October 3 before the Federal Workforce, Postal Service and District of Columbia Subcommittee of the House Committee on Oversight and Government Reform.
Much of the initial reaction to the rate case came from The Nation. In a letter that was part of an ad campaign in the spring, The Nation president Teresa Stack said, “The decision of the Postal Service Board of Governors to accept the startling rate recommendations undermines the historic foundation of our national mail system. These new rates will have grave consequences for disseminating the very type of information our Founding Fathers strove to protect. As the publishers of small national magazines that focus primarily on politics and culture, we share a common mission of providing the information essential to a flourishing democracy.”
For American Business Media, it’s not about being part of a coalition, it’s about being present at an activity that affects its members. “ABM is involved because ABM is very concerned about the impact of the most recent rate increase on some of its members,” says Washington Counsel David Straus. “And since that is the reason for the hearing, we felt that we should be there. We are not necessarily expecting that Congress will step in and change the rates. We hope this will shine a light on the uneven impact of the last rate increase. Our ultimate hope is that having been thus sensitized, they will avoid doing it again.”
Straus also points out that the new rate structure forces mailers to respond to pricing incentives that are simply not currently available in the marketplace. “In theory, co-mailing would benefit many, if not most, of the small mailers who were adversely affected,” Straus says. “But there is not enough co-mailing capacity to allow them to respond to the signals.
And why haven’t the printers stepped in? “Co-mailing equipment is very expensive and capital intensive," Straus says. “They are slowly adding capacity, but there are thousands of periodicals that could benefit from it, and they are only adding capacity dozens at a time. No one is offering co-mailing for runs under 5,000, or for tabloids, or digests or weeklies. They are the ones getting hit the worst.”
Any publisher that wants to add testimony to the October heard hearing should e-mail Ovid Bell CEO Bell at John@ovidbell.com.