In late November, the Postal Regulatory Commission (PRC) the government agency that oversees the US Postal Service, issued a final ruling in its 10-year review of the postal pricing system. This review, which actually started nearly four years ago, had undergone several rounds of comments and revisions by the mailing community, consumers, and the Postal Service itself. The outcome of the ruling, however, has sprung business mailers, particularly catalog merchants led by ACMA (American Catalog Mailers Association), into action to challenge the ruling in court. Here’s a brief backgrounder and what’s been happening since last November:
- The 10-year review was mandated by the Postal Accountability And Enhancement Act of 2006. That law mandated that all future postal rates be capped at the current Consumer Price Index (CPI) level.
- Until now, business mailers have enjoyed manageable annual rate increases and were given sufficient notice ahead of time to be able to make their mail plans accordingly.
- Upon its initial release in the late 2010s, the PRC’s review was repeatedly challenged. With its final notice, however, the Commission’s ruling (known as Order #5763) retains the CPI cap but gives the Postal Service additional pricing authority to break the cap based on the following circumstances:
- volume density declines to offset expected cost increases from volume losses in the increased size of the postal delivery network;
- to reduce USPS retirement liabilities, the USPS can add 1% in rates per year;
- another 2% pricing authority applicable to mail products or classes whose cost coverage falls below 100% – such mail is commonly referred to as being “under water.”
The Marketing Mail flats product of which many catalog mailers use is among the hardest hit. This year alone, the density-based rate authority will be 4.5%, and the retirement-based rate authority will be 1.06%. Then tack on the 2% underwater adder and this potentially represents a huge problem in many respects. Specifically, catalogers’ postage rates stand to rise 30% to 50% over the next five to 10 years if the PRC Order takes effect as is. What’s more, merchants will not know about it with more than three months’ advance notice, making it virtually impossible to properly manage their businesses.
How Can I Help?
Please determine whether you (catalog merchant), your employees, suppliers or customers have constituent standing in any of the following locations where there are Members of Congress with direct connections to postal decision makers: West Virginia, Kentucky, northern Virginia, New York, North Carolina, Oklahoma, Arizona, North Carolina, Kansas, Georgia, and Connecticut (click here for contact sheet). If you do, you have a unique ability to wield constituent pressure to cause elected officials to pressure the Postal Service Board of Governors to not institute a second unbudgeted rate hike, which could take place as soon as this summer.
- Call or write your Member of Congress in the aforementioned states using these talking points (insert your company specifics where noted). Also refer to this fact sheet asking them to reach their contacts at the USPS Board of Governors or the Postmaster General himself expressing serious concern on the impact of another rate increase on jobs in your company as well as your ability to keep mailing going forward. Details of the ask are on these sheets; use the fact sheet as a leave-behind. On emails, please copy firstname.lastname@example.org so we can follow up in Washington, DC. If you don’t know anyone in those states, please keep reading as we have other asks of you.
- If you’re a merchant and have not yet made a pledge to ACMA’s postal war chest, we are seeking contribution commitments equal to 1% of your postage spend with 33% of this amount remitted immediately and the remainder held in abeyance should we require it. If you’re a supplier, we absolutely need your help too. Please email me back directly (email@example.com) to discuss an appropriate donation based on the level of your firm’s work in this sector.
Why The Funding is So Vital
This will fund an aggressive public and government relations campaign as well as litigation challenging this order at the court of appeals. You need not be a member company to participate. We need broad assistance if we are to be successful. These funds will allow us to orchestrate a strong industry response to this disaster.
Attend Feb 24th Web Meeting For More Info
On February 24th at 4:00 pm EST, ACMA will hold an executive web meeting (registration required) to discuss our strategy to fight this horrendous decision so all know the action plan and sequencing of coordinated advocacy on Capitol Hill.
In the meantime, please take action now if you have consistent standing in the locations where politicians are able to put pressure on postal decision makers. Enlist other company executives to join you in this action.
Thank you for your help and support.
President & Executive Director
American Catalog Mailers Association