“The Decision Part II”
“The Decision Part II” might not be nationally televised as last night’s LeBron Jamesathon was on ESPN.
But “The Decision” resting on the shoulders of the Postal Regulatory Commission on Oct. 4 could very well send shock waves throughout the multichannel merchant world.
Catalogers would receive a 5.1% increase in postage if the U.S. Postal Service’s proposed exigency rate case is approved by the PRC. The USPS is in a horrible financial state, losing billions of dollars a year, with five-day delivery a distinct possibility.
If Congress waives the Postal Service’s annual $5.5 billion payment for retiree health benefits before its scheduled Sept. 30 adjournment, Steve Kearney, senior vice president, customer relations for USPS, has said withdrawing the exigent rate case “might be something to consider.”
The backlash against this exigent rate case was strong and immediate. Many industry experts questioned the legality of it in March when it was first announced by the USPS.
Jim Cregan, executive vice president of government affairs for the Magazine Publishers of America, and member of the newly formed Affordable Mail Alliance, said if the PRC approves the rate case, the USPS would “accelerate its own death spiral just when the industry and the economy are beginning to get up off the floor. It’s bad for all concerned.”
Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association and member of the Affordable Mail Alliance, said there is a legal CPI cap on postage rates and the “USPS wants to break that cap and by 10 times the rate of inflation.” Cerasale said a “reasonable” increase would be at or below the cap, which is less than 1%.
Most detractors don’t believe the USPS has done enough internally with excess capacity, and taking a hard look at management positions.
What the USPS calls “moderate and reasonable” increases, those on the other side call short-sighted and unreasonable.
PRC Chairman Ruth Goldway became the head of that panel less than a year ago and now she and her colleagues face a “decision” that will receive thorough scrutiny during the 90-day process, and one that will affect millions of merchants throughout the U.S.
Come Oct. 4, Goldway might not have booked the Boys & Girls Club in Greenwich, CT, Jim Gray might not be sitting in a chair ready to interview her live on ESPN, and media outlets might not be following this story around the clock from mid-September on, but rest assured the PRC will be in the spotlight as millions of mailers across the country will be anxiously awaiting its “Decision.”
July 10th, 2010 at 10:52 am
either the post office is a government agency or its not, either we bail it out with tax dollars or let it run like a business without government interference. the rates for catalogs are ridiculously low anyway. those same people that are crying about it wouldnt or couldnt do it for that amount either
July 11th, 2010 at 8:36 am
Gas goes up, so does food, rent, insurance etc. Why does everyone get so upset when the Postal Service goes up.
The price the big mailiers pay is small compared to what the gerneral public pays. They get discounts on top of discounts. These discounts are given because they sort the mail to a final sort that is easier to deliver in the street. The idea is to save the Postal Service time and money by not having to make the sorts in the Postal System. The only problem is the discounts are greater than what it would cost to have the work done by the Post Office.
The Post Office can’t make money by giving away work and charging less that what it would cost to sort inhouse.
July 13th, 2010 at 10:23 am
Sirs, the raising of rates for periodicals is both fair and overdue. However, it may not be neccessary if Congress overturns the millstone that the Postal Service has been forced to carry since the passing of the alleged Postal Accountability Act of 2006. This saddled the Postal Service with the burden of having to pre-pay retiree health benefits to the tune of $5.5 billion a year. This millstone was thrust upon them at the start of the recession and is the direct cause of the financial straits that the Postal Service finds themselves in.
Who was behind this action, no one seems to know; and why the Postal Service was singled out to have to “pre-pay” retiree health benefits when no other federal agency does so, indeed no other company or corporation in America does does so is an open question that no one will answer.
Congress has the ability to remove this onerous, self destructive burden from the Postal Service anytime they want, but, they seem stuck on their collective butts and have done almost nothing. Call your Congressman’s office for details!
July 18th, 2010 at 10:03 am
It’s about time. We the working class citizens of America are the only ones paying .44 cent postage. These bulk mailers are given service for pennies on the dollar; and the post office puts this weight on the letter carriers back, telling the carriers just ‘do it’. If these mailers paid their fair share, and the postal service quits selling us out to the big businesses we would turn a profit.