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Groups: No USPS Hike Means $150 Million in Savings for Publisher Members

MPA, ABM estimate postal service developments will save publishers, big time.

Jason Fell FolioMag.com
10/28/2009

Earlier this month, the USPS said it would not increase prices for “market dominant” products next year, including First Class, Standard Mail, periodicals and single-piece Parcel Post.

Now, magazine associations including the Magazine Publishers of America and American Business Media are estimating that their member publishers will collectively save $150 million.

“Assuming that the recent relief avoided an increase of 7.5 percent across the board, the relief saved MPA members about $125 million on an annual basis,” an MPA spokesperson wrote in an e-mail to FOLIO:.

In its most recent e-newsletter [1], ABM said the lack of a postal rate increase next year, combined with Congress’ decision to absolve the USPS from a $5.4 billion payment to the retiree healthcare fund it received this fall, has contributed to a savings of roughly $25 million for its members. "If that relief had not been obtained, it is uncertain exactly what the Postal Service would have done; however, an exigent rate increase of about 7 to 9 percent would have likely been imminent,” ABM said.

The USPS said in its announcement [1] that while increasing prices might have generated revenue in the short term, the long term effect “could drive additional mail out of the system.”

In August, the USPS reported [2] a $2.4 billion loss for the third quarter and a $4.7 billion loss year-to-date. It projected a net loss of more than $7 billion through the end of the fiscal year 2009.  


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