DMA Tells House Postal Oversight Panel That US Postal Service Must Become 'More Efficient, Not Less Responsive'

Washington, DC, July 26, 2007 — In testimony today before the House Committee on Oversight and Government Reform Subcommittee on Federal Workforce, Postal Service and the District of Columbia, the Direct Marketing Association (DMA) voiced its potential concerns over the United States Postal Service’s (USPS) infrastructure and realignment efforts required under the Postal Accountability and Enhancement Act (PAEA).

“The American economy needs an efficient Postal Service to support the $900 billion economic engine that the US mail generates. The American public — from the person mailing a birthday card to the largest business mailer — deserves to know what they are getting for their postage costs, and feel confident that they are receiving the level of service that they have come to expect,” Jerry Cerasale, DMA’s senior vice president for government affairs, told the committee.

One of the major goals of PAEA — which was strongly supported by the DMA and signed into law by President Bush on December 20, 2006 — is to enable the Postal Service to meet the 21st century market needs of individual and business mailers.

“DMA and its members are very well aware of the challenges that lie ahead, but we look forward to working closely with the Postal Service to create the most efficient mail transportation and delivery system possible without passing new costs onto businesses, nonprofit organizations, or consumers,” added DMA President & CEO John A. Greco, Jr.

“DMA members’ largest concern is that the Postal Service could use the justification of improving service standards to reduce what mailers are receiving for their money,” Cerasale told the House panel. “It is our strong belief that cutting costs by cutting service violates the basis of the postal reform law. Therefore, any service standard-setting process must prevent that cost shift. The Postal Service must become more efficient, not less responsive.”

“Reductions in service that shift costs to mailers are, in effect, hidden rate cases,” Cerasale testified. “The Consumer Price Index (CPI) cap established by the postal reform law cannot be bypassed by realignment and service changes. It is imperative to understand and remember that mailers need the Postal Service to meet its service standards, since both missing deadlines and beating deadlines cause havoc to broader sales and fulfillment operations.”

“There are many DMA members who send small mailings nationwide who receive very poor service for their Standard Mail investment,” Cerasale further noted. “It is not uncommon for it to take weeks for mail to reach its destination across the country. And for nonprofit mailers the situation appears to be even worse. With the transportation networks in this country available to the Postal Service, it can do — and must do — better for the smaller Standard mailer.”

About Direct Marketing Association (DMA)

The Direct Marketing Association (DMA) (www.the-dma.org) is the leading global trade association for business and nonprofit organizations that use and support multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable and appropriate 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 gross domestic product (GDP). Today, there are 1.7 million direct marketing employees in the US alone, whose 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.

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