Lame-Duck Congress Seemingly Ends Chances For Postal Reform This Session
With Congress headed into a lame duck session, postal reform is likely dead in the water for 2006, said two industry professionals this week. But technology upgrades within the postal service may bring some postal cost relief down the road.
Addressing publishing professionals Tuesday at an Idealliance and P3-sponsored conference called IDEA! Focus, Val Scansoroli, a Hearst Magazines consultant, and Mike Winn, senior vice president/division director at RR Donnelley & Sons, talked about the future of postal reform and the initiatives being undertaken by the U.S. Postal Service to streamline its distribution network.
The co-chairs of IDEAlliance’s addressing/distribution committee also spoke about a little known address regulation taking effect next year that could increase publishers mailing costs another 1 or 2 percent. "A second rate increase plan, which is not actually called a rate increase plan, takes effect in July 2007," said Winn. "That’s when all mail lists have to be put through a process to ensure that all of the addresses match to good, deliverable addresses. And if all the addresses do not match to good deliverable addresses, the automation decrease will be discounted."
Scansaroli said the problem in ensuring the list match stems from the postal service’s reluctance to supply its address lists to publishers due to privacy concerns. "About 80 percent of publishers will see a 1 to 2 percent increase because of it," he said.
Additionally, publishers and printers will have to grapple with the new four-state barcode, which must be present on all mailing addresses come next year. "You need the four-state barcode to get your automation discount," Scansaroli said, adding that most bindery equipment, at present, is unequipped to handle the extra space needed on address labels to accommodate the codes.
The Postal Service filed a rate case in May with the Postal Rate Commission that proposes a system-wide postal increase of 8.5 percent, with magazines looking at an average 11.4 percent jump in rates. The rate case is still pending and has many in the publishing industry calling for postal reform.
Despite what Winn described as a valiant effort, postal reform did not pass in its most recent session, which adjourned in late September to allow members of Congress time to campaign for the November election. "The letter carriers’ union put a block on the bill at the last minute and with Congress heading into lame duck session, the chances that it will pass this session are slim," he said. "The bill is essentially dead."
That said, the U.S. Postal Service is launching automation changes that down the road could save publishers money, the two said. One of the changes that will take place next year is the move to a flat sequencing system that will eliminate the need for humans to sort the morning mail.
The problem, however, is that flat mail, which includes magazines, is more common in affluent sections of the country and the postal service plans to deploy the flat sequencing system only areas of the country where flat mail is the most common, said Winn. "If you look at some place like Washington D.C., there’s large volumes of flat mail, but in places like the South, where it’s more industry, there’s not enough flat mail to justify the equipment expense."
Postal One, a digitized postal payment service, also is expected to take effect next year. The hope is that this too will eventually trim the postal service’s workforce, which stands at about 700,000 employees, down from a high of 800,000 a few years ago, said Scansaroli.
Additionally, the postal service is trying to enact plans for an Evolutionary Network Design (END), which includes the realignment of all postal processing facilities, closing facilities, opening new facilities where needed, updating equipments and retiring antiquated equipment, the two said. "It’s going to be a long road and a lot of change is going to be happening over the next few years," added Winn.