B-to-B Publishers, Direct Marketers Slam Recommended Postal Rate Increase
Business-to-Business and catalog publishers this week slammed the Postal Regulatory Commission’s proposed increase as “outrageous” and detrimental to the health of their businesses. In a statement to his members, John A. Greco, Jr., CEO of the Direct Marketing Association, said the recommendation will put a a huge burden on nonprofit publishers. “The outrageous rate increases proposed for many types of flat mailings are far in excess of what had been expected by the mailing community, and are certain to ultimately cause a serious decline in mail volumes and a negative ripple effect for consumers, businesses, and the economy,” his statement said.
The increase most likely won’t be as high for periodicals as it is for catalogs, which according to DMA could be as much as 40 percent, but the publishing industry still has a lot to worry about, said David Straus, partner at Thompson Coburn and American Business Media’s Washington D.C., counsel. This week, he encouraged members of the ABM to write to the Postal Service Governors to express their concerns over the levels the recommended rates. He said ABM members should stress that the future of their businesses is on the line.
Although the U.S. Postal Service has said magazines face an average increase of 11.7 percent, Straus said rough estimates show that if the increase goes into effect, many periodicals may see a 15 to 22 percent increase.
Straus said that another problem is the fact that if the increase goes into effect in May, as the Postal Service has previously said, there won’t be enough time for developers to create the software needed to implement the new rates and create mailing statements. “If this recommendation is accepted, it shouldn’t be implemented in May. Wait until software is ready,” said Straus. “At this point, mailers have no way to fill out the mailing statements that must accompany each mailing and it appears that the software won’t be ready until about two months after the Postal Service publishes the detailed rules governing the new rates and presents a modified mailing statement.”
If the rate increase recommendation does go through, Straus said that publishers can do a few things to cut costs, but options are limited. “The way to minimize the effect is to get out of sacks and make bigger bundles,” he said. “You’re being charged by the number of sacks and bundles, so there will be ways to possibly reduce the impact, but doing that could affect service.”
While co-mailing is an option, there still are not enough resources available. “It takes time, costs money and requires a printer who is capable and has the willingness to work with you,” Staus said. “It’s really a matter of getting to your printer first because, right now, there’s an unsatisfied demand for co-mailing.”