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DMA Calls Postal Service's Deficit Projection A Clear Indicator For Reform
NEW YORK, May 7, 2002 - The Direct Marketing Association (DMA) today called the United States Postal Service's (USPS) projected $1.5 billion deficit for the fiscal year 2002 a clear indication that the Postal Service is in need of legislative reform.
"The Postal Service's projected loss is just the latest indicator of the severity of its financial crisis," said H. Robert Wientzen, president & CEO, The DMA. "Continuous postal rate hikes, coupled with announcements of worsening budget deficits signal that the Postal Service's economic deterioration is accelerating rapidly. Congress no longer needs to wait for any other catalyst for legislative action."
"While we are not denigrating the Postal Service's cost-cutting measures to date, its going to be more difficult for the service to continue to try and bring things into balance," said Wientzen. "We believe that future cost cutting efforts may prove to be increasingly difficult."
The USPS expects a decline in volume of up to six billion mail pieces, which is a major factor in the projected net loss. However, due to cost-cutting measures and a June 30 implementation date for the next rate hike - as opposed to September 30 - the Postal Service has managed to minimize the projected deficit from a prior estimate of $4.5 billion.
The Postal Service also announced that it has set a May 28 ratemaking summit, jointly sponsored with the independent Postal Rate Commission.
The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 5,000 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned study, direct and interactive marketing sales in the United States exceeded $1.86 trillion in 2001, including $118 billion in catalog sales and $30 billion in sales generated by the Internet. The DMA's Web site iswww.the-dma.org, and its consumer Web site is www.shopthenet.org.