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THE DMA: PROPOSED USPS PRICING FLEXIBILITY PROGRAMS GOOD FOR BUSINESS AND CONSUMERS
WASHINGTON, September 6, 2002 – The Direct Marketing Association (The DMA) today applauded the decision of the United States Postal Service's (USPS) Board of Governors to seek the approval of the Postal Rate Commission (PRC) on two experimental proposals that would give the USPS a measure of price flexibility in setting postage rates for commercial mailers.
The USPS will submit two proposals to the PRC regarding a Negotiated Service Agreement (NSA) and co-pallettization.
Under the current 32-year-old law that governs the Postal Service, NSA’s are one of the few ways in which the USPS can pursue pricing flexibility in the competitive electronic and private delivery carrier marketplace.
"We are pleased that the logjam is finally broken," said H. Robert Wientzen, president & CEO, The DMA. "The Postmaster General is delivering on a commitment made to commercial mailers and the mailing public. This is a good first step toward addressing market demand for both consumers and commercial mailers alike."
"In this new era of electronic and private carrier competition, the Postal Service needs to have the flexibility to negotiate rates with commercial mailers," said Wientzen. "Otherwise ever-increasing postage rates will send mailers to alternatives, depriving the Postal Service of the volume it needs to continue to provide universal service at affordable rates."
"This type of innovative and entrepreneurial action is exactly what the Postal Service needs," said Jerry Cerasale, senior vice president, government affairs, The DMA. "We are gratified to see that this highly anticipated portion of the Postal Service's Transformation Plan is being moved forward."
"In addition, we are pleased that the Postal Service’s cost containment efforts have taken hold, and that some of the revenue loss associated with the volume decline of the past two years has been offset," said Wientzen. "We are, however, only cautiously optimistic about the Postal Service’s projection of a $600 million surplus for its next fiscal year, which begins later this month."
"Aggressive cost containment and flexible pricing initiatives are the cornerstones of attracting more business to the Postal Service," Wientzen said. "But make no mistake about it, their job is not done. Eventually we need to enact comprehensive legislation to reform the mid-20th-century laws that govern its operations in today’s 21st century economy."
The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 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.