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DMA Urges Congress to Pass Postal Reform
Washington, DC, September 28, 2006 — As negotiations continue in developing a conference agreement on postal reform legislation, the Direct Marketing Association (DMA) is calling on members of the House and Senate to make sure final legislation is passed before the 109th Congress adjourns.
“Making sure that the US Postal Service remains an efficient and effective channel for communications is tremendously important for the continuing health of America’s economy,” said DMA President & CEO John A. Greco, Jr. “Cooperative, nonpartisan efforts have brought about the greatest chance for reform in recent years. Now is the time to bring this to closure.”
As the mailing community works with members of the House and Senate to forge a compromise bill, DMA continues to support final legislation that will:
· Eliminate the escrow account for the over-funding of pension and healthcare costs
· Reverse the current policy on postal retirement costs for military service
· Place a hard cap on rate increases
· Encourage worksharing discounts and negotiated service agreements
“Even in today’s complex, multichannel landscape, mail remains an important tool for business communications. From sending marketing materials, to mailing billing statements to meeting fulfillment requirements, it would be hard to find a business that does not rely on the Postal Service to communicate with current and potential customers,” added Greco.
Over the past five years, First Class mail volume has declined by more than 5.5 billion pieces, while the 6.6 million new residential and commercial delivery points have been added to the Postal Service workload. Periodic rate increases and a steady growth in standard mail volume have provided the Postal Service with the revenue it needs to stay financially viable.
But if commercial mailers continue to be faced with frequent and unpredictable postage increases that far exceed the rate of inflation, DMA and its member companies will be forced to seek more cost-effective means of reaching out to customers. If marketers turn away from the mail as a tool of communications, the ability of the Postal Service to deliver reliable, universal service to homes and businesses nationwide could be in jeopardy.
The success or failure of the postal service will have a ripple effect on the rest of the economy. Across the country, approximately $900 billion in commerce and more than 9 million jobs – including more than 700,000 USPS jobs – depend upon the success or failure of the Postal Service. As well, businesses forced to pay higher costs for billing and fulfillment mail would pass those costs along to consumers.
The reforms provided in the current legislation (S. 662 and H.R. 22) will allow the Postal Service to continue to provide the services that businesses and consumers need at rates they can afford. Financial reforms will allow the postal service to make better use of its revenue stream, and operations reforms will allow the USPS to be more flexible and responsive to the needs of today’s changing communications landscape.
More information on postal issues is available online at www.the-dma.org/postal.
The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel 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 end-to-end direct marketing process. Founded in 1917, DMA today represents more than 3,600 companies from dozens of vertical industries in the US and 50 other nations, including a majority of the Fortune 100 companies, as well as nonprofit organizations.
In 2005, companies spent an estimated $161 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated an estimated $1.85 trillion in increased sales in 2005, or 7 percent of the $26 trillion in total sales in the US economy (which includes intermediate sales). All together, direct marketing accounted for 10.3 percent of total US GDP in 2005.
The Power of Direct: Relevance. Responsibility. Results.