PRC Approves Postal Summer Sale

April 8, 2010 — The Postal Regulatory Commission has approved the Postal Service’s request for a 2010 Summer Sale for Standard Mail. Mailers who entered at least 350,000 pieces of Standard Mail letters and flats July 1 through September 30, 2009 are eligible for the sale. Any eligible mailer that increases Standard letter and flat mail volume by more than five percent between July 1 through September 30, 2010 over the same period last year will receive a 30 percent discount on volume over the five percent increase threshold.

DMA applauds the USPS for submitting this sale request, and commends the Commission for endorsing the sale as an acceptable use of the pricing flexibility granted the Postal Service by the 2006 Postal Accountability and Enhancement Act.

“While most of DMA’s comments in support of the Postal Service proposal were well received by the PRC, we continue to believe that the direct marketing community and the Service would be better served had both the 350,000-piece eligibility and the five percent volume increase thresholds been eliminated,” said Neil O’Keefe, DMA’s vice president of multichannel segments.

DMA's comments are cited in the filing, suggesting that the USPS use “a threshold of 95 percent or 90 percent in the future” in order to sustain volume as well as attempting to increase it. In addition, DMA is cited as encouraging the “expansion of the program to smaller mailers.”

“DMA is concerned that the Commission remains narrowly focused on what it refers to as ‘anyhow mail’ (volume increases that would have occurred without the discount),” said O’Keefe. As the Postal Service announced on March 2, 2010, mail volume is expected to decline over the next decade.

“Rather than focusing on calculation estimates of ‘anyhow mail,’ the Commission should be focused on maintaining mail volume to support the universal delivery network of the Postal Service,” O’Keefe said. “Under the former postal ratemaking regime, detailed cost data and anyhow mail analysis would be appropriate. We believe that the new ratemaking procedures should be focused on market factors not cost of service.”

“In addition,” continued O’Keefe, “DMA believes that the Commission’s new data demands outlined in its decision are unduly broad and costly.” While the Commission expressed concern over the administrative costs of this initiative, it also asked for detailed mail volume data for every participant in the sale program from 2006 to 2010. This alone will significantly increase the administrative costs of the program for both mailers and the Postal Service.

“DMA is also concerned about the Commission’s preoccupation with the inclusion of products that allegedly fail to cover costs without fully taking into account either the validity of the figures reported in the recent Annual Compliance Report or the potential benefits to the Service’s bottom line from increased volume and prospect for subsequent migration to more dense and less costly categories,” O’Keefe went on to say.

As noted in the filing, “DMA also suggests a longer term incentive program of two or three years to facilitate mailer planning” and the “expansion of the program to smaller mailers”.

If you are interested in participating in the sale, have mailed 350,000 pieces last July through September, and have not received an eligibility letter from the Postal Service, please contact either Jerry Cerasale (jcerasale@the-dma.org) or Ed Gleiman (egleiman@the-dma.org).

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