DMA Comments on Postage Rate Decision

Washington, DC, March 19, 2006 — The Direct Marketing Association (DMA) today thanked the Governors of the US Postal Service for responding to mailers’ concerns and requesting reconsideration of postage rate increases recommended by the Postal Regulatory Commission (PRC) for flat-shaped mail. At the same time, DMA expressed its disappointment that the Board of Governors did not allow additional time for many nonprofit mailers to revise and test new mailing campaigns.

The Governors announced this afternoon their acceptance of most of the recommendations put forth by the PRC on February 26. But after hearing from many within the mailing community, the Governors asked the PRC to reconsider its recommendations for Standard Mail flats. The PRC’s proposed rates were more than double what the Postal Service had originally requested in May 2006, and would be devastating to many of America’s catalog mailers.

“In regard to Standard flat rates, the Postal Governors made the right decision today,” said DMA President & CEO John A. Greco, Jr. “In the face of overwhelming evidence, they chose not to move forward with a decision that was certain to be detrimental to many postal customers and to the very future of postal operations. At the same time, we are disappointed that the Board of Governors has ignored the pleas of nonprofit organizations for more time to adjust to significantly higher rates.”

Hundreds of DMA members and others in the mailing community have written to the Governors and the PRC over the past two weeks to explain the severe negative effect the recommended rates would have for their organizations.

“We sent a clear message to postal officials that the surprisingly high increases in flat mail rates were unacceptable to the mailing community,” said Greco. “The Governors and the PRC were left in no doubt that catalog and nonprofit mailers would be forced to make significant cuts in mailing volumes, which could ignite a long-term decreasing spiral in postal revenues.”

Senny Boone, executive director of DMA’s Nonprofit Federation, highlighted the nonprofit community’s displeasure with today’s decision. “We are extremely disappointed that the Board of Governors did not delay the implementation of increased rates for nonprofit mail that falls into the new ‘not flat-machineable’ class.”

“In their decision, the Governors frequently expressed concern for those mailers who would have difficulty converting their mailings to more cost-effective shapes,” said Boone. “Nonprofits desperately need that additional time to develop and test alternative methods for successful fundraising, so we continue to ask that the Board reconsider its decision and give nonprofits more time to adjust.”

For all classes of mail for which increases were approved today, the new rates will go into effect on May 14, 2007. For periodicals, the effective date will be July 15. The rates that PRC has been asked to reconsider will go into effect “under protest” on May 14, pending a final decision by the Governors on the further recommendations of the PRC.

“As it reconsiders its recommendations, we hope that the PRC will act quickly, listen to the voice of postal customers, and embrace the tenets of the postal reform legislation that will govern future rate increases,” added Jerry Cerasale, DMA’s senior vice president for government affairs.

DMA continues to believe that the proposed flat rates can be mitigated without impacting the approved rates for other classes of mail, which are consistent with the original USPS request.

As the PRC announces its schedule and process for revising its recommendations, DMA will continue to provide updated information and calls to action for our members.

# # #

About DMA

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 2006, marketers — commercial and nonprofit — spent $166.5 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures generated $1.93 trillion in incremental sales. Last year, direct marketing accounted for 10.3 percent of total US GDP. Also, there are today 1.7 million direct marketing employees in the US alone. Their collective sales efforts directly support 8.8 million other jobs. That accounts for 10.5 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

RSS Subscription