DMA to Discuss Ramifications of PRC Annual Complicance Report

April 5, 2010 — On Thursday, April 8, 2010 at 12:00 p.m. ET, the Direct Marketing Association (DMA) will hold a discussion via teleconference, exploring the potential ramifications of the recent Postal Regulatory Commsion (PRC) Annual Compliance Report on the USPS FY 2009 (ACR).

In a recent letter on the topic, DMA Vice President of Multichannel Segments Neil O’Keefe wrote:

Recently, DMA members met with PRC Chairman Ruth Goldway and USPS CFO Joseph Corbett. Both strongly signaled an exigent rate case that may be as much as five- to eight- percent. In addition, Goldway stressed that classes of mail which do not cover attributable costs could receive higher than average increases. The ACR clearly asserts that Standard regular flats, parcels, NFMs, and periodicals are not covering attributable costs.

At issue is what comprises attributable costs. If it includes more than just variable costs, then incentives to increase volume would likely be a better remedy than another hike destined to drive volume down even further.

Corbett seems to agree that increasing carrier route qualified mail would contribute favorably to the USPS bottom line. We all know that the easiest and most efficient means of increased Carrier route qualification comes from increased circulation. Another option to achieve greater density (and more favorable rates) is increased co-mailing.

On this call, we will discuss proposals on how we may be able to lock in lower rates through:

· volume commitments

· combining parcel volume

· more robust and better designed incentive sales

In addition, we will explore:

· whether the USPS and the PRC have the attributable costs correct for the products in question

· how we might influence the USPS's plan---required by the PRC---for bringing allegedly below water products to the point that they make a positive contribution to institutional costs

Join me along with Jerry Cerasale, SVP Government Affairs, DMA and Ed Gleiman, former PRC Chairman, on Thursday April 8, 2010 at 12:00 noon EDT.

Please RSVP to nokeefe@the-dma.org. Details regarding dial-in and a webinar link will be provided.

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