Postal Service Approves Rate Increase

Washington, DC, November 15, 2005 –The Governors of the U.S. Postal Service today voted today accept the recommendations of the Postal Rate Commission (PRC) to increase most postal rates and fees by approximately 5.4 percent across the board. However in an unexpected move, the Board of Governors decided to implement the new rates on January 8, 2006, rather than later in the month.

The DMA, which represents the interests of most of America's largest mailers, signed onto the rate case settlement between the United States Postal Service (USPS) and stakeholders from the mailing community earlier this year. And while concerned by several proposed double-digit rate increases, DMA expressed support for the final recommendations of the Postal Rate Commission announced last week. A January 16 implementation date for the new rates, had been widely expected, although DMA had initially hoped the increases could be delayed until sometime in the spring.

"Although DMA signed onto with the rate case settlement agreement, we are disappointed that the Board of Governors has chosen to implement the new rates on January 8^th, rather than a later date," said Jerry Cerasale, DMA’s senior vice president for government affairs. "This breaks from a past tradition of giving postal customers at least 60 days to prepare, and falling as it does over the busy holiday season, will make it especially difficult for most marketers."

The DMA also expressed disappointment that issues raised in a letter sent to the Board of Governors last week were not addressed in the final decision. In the November 10 letter, the DMA highlighted concerns about rate increases recommended by the PRC for Media Mail that were more than twice what had originally been proposed. The DMA had asked that the Governors not accept that particular recommendation and requested a reconsideration of the recommended rate for Media Mail.

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The Direct Marketing Association (www.the-dma.org) is the leading global trade association of business and nonprofit organizations using and supporting direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the entire direct marketing process. Founded in 1917, DMA today has more than 4,800 corporate, affiliate, and chapter members from the US and 46 other nations, including 55 companies listed on the Fortune 100.

In 2005, companies will spend more than $161 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures are expected to generate $1.85 trillion in increased sales in 2005, or 7% of the $26 trillion in total sales in the US economy (which includes intermediate sales). All together, direct marketing will account for 10.3% of total US GDP in 2005.