For two weeks now, Americans have been paying two cents more for a first class stamp. Those two extra pennies aren’t enough to stop most individuals from mailing in a bill payment or sending a birthday card. But for America’s advertising mailers, a few pennies per letter can add up to millions of extra dollars in postage costs, and ultimately, a big impact on our national economy. According to the Direct Marketing Association, advertising mail contributed more than $660 billion in increased sales to the US economy in 2006.

The thousands of businesses and nonprofit organizations that send large envelopes or catalogs (“flats� in official postal parlance) were dealt a major blow earlier this year when the Postal Regulatory Commission recommended postage increases for flats that are far in excess of what the Postal Service had requested last year and what mailers have expected and budgeted for. Mailers expecting a 9-12 percent increase in postage costs for Standard Flat Mail are instead being hit with increases of 20 and more – as high as 40 percent in some cases.

Just as higher gas prices are affecting consumers across the country, these higher postage rates are having a huge bottom-line impact on many businesses and nonprofit organizations – an additional expense many will not be able to afford.

In the weeks before the exorbitant increases went into effect, hundreds of mailers wrote to the PRC, the USPS and members of Congress, letting them know that these outrageous rate increases will force catalog and nonprofit mailers to make significant cuts in mailing volumes – an action which will negatively impact their own organizations as well as future postal service revenues.

DMA and others in the mailing community also pointed out that these increases are inconsistent with the spirit of postal reform laws enacted late last year (and due to take effect in 2008) that will hold future rate increases to the rate of inflation.

Today, mailers are disappointed that the Regulatory Commission (PRC) has refused to revise its recommendation for exorbitant postage increases for Standard Mail Flats. After hearing from the mailing community, the Board of Governors of the Postal Service had asked the PRC to reconsider its rate recommendation.

On Friday, the PRC did come back with a revised recommendation. But rather than the real rate relief which was sought, mailers are only being given a temporary “adjustment period� with a three-cent reduction in the cost per piece for standard flats, and a two-cent reduction for nonprofit flats. If accepted by the Postal Governors, the reduced rates will end by September 29, putting the squeeze back on mailers just as they enter into the busy holiday mailing season.

DMA is asking the Governors to approve the rate reduction WITHOUT the deadline, leaving it in effect until the next postal rate change, likely in mid-2008, under the new procedures established by the postal reform law that was enacted late last year. More information is available here.

This entry was posted on Wednesday, May 30th, 2007 at 10:52 am and is filed under Politics .