Postal Commission Recommends 11.7 Percent Increase, Encourages Efficiency (posted 2/26)
Postal Regulatory Commission recommends greater use of cost-based rates for bundles, sacks and pallets.
The Postal Regulatory Commission today agreed with the U.S. Postal Service that postal rates on out-of-county periodicals should go up an average of 11.7 percent. But it recommended reducing a proposed 24.4 percent increase on in-county mailings to 18.3 percent.
The commission also recommended a greater use of cost-based rates that would give mailing discounts to periodicals that prepare their mail using bundles, sacks and pallets. The move, said the commission, would ultimately lead to lower rates for cost-conscious publishers. The cost-based rate recommendation was drawn from separate proposals made by the U.S. Postal Service and Time Warner, the commission said.
The postal commission recommended the cost of a traditional stamp rise from 39 to 41 cents, rather than the 42 cents recommended by the postal service. The commission’s recommendations now go to the postal service’s board of directors. Postage rates are expected to increase in May.
MPA president Nina Link said, in an email to members today, that her organizations is “generally pleased” with the recommendations. “Although an 11.7 percent average increase is nothing to celebrate, our litigation team triumphed on two major issues that would have, if we’d lost, made that average much higher,” she said. “Also, very significantly, the PRC’s decision approves major changes in the periodicals rate structure that will recognize the cost characteristics of efficiently prepared mail and reward publishers who engage in work-sharing activities, while moderating the immediate impact on smaller publishers who are not yet engaging in these activities.”
American Business Media, in a statement to its members today, reiterated its position that a cost-based rate system should not be used to the detriment of smaller publishers that do not have the option of co-mailing or co-palletizing.
Last month, ABM submitted opposition testimony to the postal commission opposing separate rate case proposals made by Time Warner and the Magazine Publishers of America that it believed would hurt smaller publishers. “The (postal) commission agreed, and it stressed that the rates it recommends contain ﾑsignificant moderation’ from the rates proposed for this new structure by Time Warner,” ABM said in its statement. “It did so, in part, based upon ABM’s testimony demonstrating that it is necessary to moderate the impact on those that cannot co-mail, at least at this time.”
ABM said it would offer further comment on the commission’s recommendations once it analyzes the complex rate structure, which can be found here.
Jim O’Brien, vice president of distribution and postal affairs for Time Inc., said he believes the commission made a balanced decision. “First, they selected a rate structure that provides the magazine industry with the proper rate signals to drive costs out of the system,” he said. “Second, they reduced the bundle and container pass-through costs in an effort to mitigate the impact upon small to mid-size publishers. I’m confident that their decision is the right direction for the future of the magazine industry.”