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DMA Disappointed by PRC Decision.
Washington, DC, May 25, 2007 — The Direct Marketing Association (DMA) expressed its disappointment today at the refusal of the Postal Regulatory Commission (PRC) to revise its recommendation for exorbitant postage increases for Standard Mail Flats, and instead offer postal customers less than four months of “transition time.”
“Over the past several months, postal officials have heard a loud and clear message from the mailing community that these outrageous rate increases will force catalog and nonprofit mailers to make significant cuts in mailing volumes,” said DMA President & CEO John A. Greco, Jr. “Giving mailers a ‘summer break’ doesn’t change that fact. Come October – just as companies head into the peak holiday mailing season – the hurt will be on once again.”
The PRC’s Second Opinion and Recommended Decision on Reconsideration, which was issued today, establishes a transitional temporary rate reduction of three cents ($0.03) for all Standard Mail Regular flats and two cents ($0.02) for Standard Regular nonprofit flats. The Commission recommended no other rate changes. The Board of Governors of the United States Postal Service (USPS) must now approve the PRC’s recommendation in order for the reduced temporary rates to go into effect.
DMA is asking the Governors to approve the rate reduction without the deadline, leaving it in effect until the next postal rate change, likely in mid-2008, under the new procedures established by the Postal Reform law that were enacted late last year.
“We are encouraged that the PRC at least seemed to recognize our fundamental premise that flat rates can be reduced without imposing higher costs on other classes of mail,” said Jerry Cerasale, DMA’s senior vice president for government affairs. “We have every confidence that today’s proposed relief can be made permanent without causing financial harm to the Postal Service.”
Cerasale also noted that the three-cent decrease recommended today leaves flat rates substantially higher that what the USPS originally requested in May 2006 when it filed its omnibus rate case. This means that many mailers may still be forced to cut mailings during this interim period to remain within planned budgets. “While obviously the PRC understood the difficulties its original recommendation would create, offering this temporary relief is merely a band-aid that will do little to address the ultimate problem and stop plummeting mail volumes.”
Since the PRC issued its original recommendations on February 26, hundreds of DMA members have written to the Commission and the Postal Governors to express their concerns. Today, DMA is again calling on its members and others in the mailing community to join us in asking the Postal Governors to keep the rate reductions that the PRC has recommended in effect beyond September 29.
“We have tremendous strength in numbers,” said Greco. “If we work together, we can present a powerful, unified message that lets the Postal Governors know that permanent rate relief for flat-shaped mail is the only real solution for the mailing community. Temporary relief is not what we asked for – and it’s not the relief mailers desperately need.”
Contact information and sample language for letters to the Postal Governors can be found at www.the-dma.org/postal.
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The Direct Marketing Association () is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates 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.