formerly Advertising Mail Marketing Association)
On The Announced R2000 Rate Case: "A Date That Will Live In Infamy"
The following is a perspective by postal commentator Gene Del Polito for publication in Direct magazine. The views expressed are the author's and do not necessarily reflect the views of the Association for Postal Commerce.
The U.S. Postal Service (USPS) finally has filed with the Postal Rate Commission (PRC) its request for new, higher rates. As I review what the Postal Service is seeking, particularly from those who mail automatable, larger than letter-size pieces (i.e., catalogs, larger envelopes, and periodicals) all I keep hearing running through my head is Franklin Roosevelt's December 7th day of infamy radio address.
I have been an active player in the postal arena for over 16 years. NEVER have I ever heard as much disillusionment, disappointment, and anger from business mailers as the present proposal has evoked. And it hasn't been from direct mailers or catalogers alone. In fact, ANYONE who has taken the Postal Service at its word that making mail automation compatible is "the way to go" is furious with the USPS' decision to stick the highest percentage postal rate increases on those who prepare their larger-sized mail for automation-compatibility.
When the Postal Service filed its 1997 rate case, it told mailers that the best rates would be given to those who got with the postal automation program. For the past three years, mailers have made significant investments to fulfill the USPS' automation needs. To put it bluntly, mailers are disgusted to learn in so insidious a way that, for the past three years, the Postal Service has bungled its handling of the flats automation program and now expects its customers to pick up the tab for its incompetence.
Without a doubt, this postal increase request is bad news for mailers. What is incomprehensible, however, is how its postal architects could not possibly foresee that this proposal most definitely will mean bad news for the Postal Service.
Anyone who draw breath, anyone who could generate a pulse SURELY has observed the explosive growth in Internet marketing over the past year. Surely knowledgeable observers within the USPS realize that an explosion of wider Internet bandwidth via xDSL and cable technologies is about to enhance the online shopping experience. Surely anyone with half a brain realizes that everyone who experimented with Web-based "e-tailing" has "gone to school" on the challenges of Internet fulfillment logistics and will have the major problems knocked by the next holiday mailing season. Furthermore, with Y2K out of the way, the last of the worries about millenium bug-induced snafus are a matter of history.
Telling catalog marketers and other direct mailers that their rates (read, "cost of doing business") is about to go up 14% if they continue to commit their marketing plans to mail is the surest way I know to spur their interest and an increased commitment of their marketing and advertising dollars to electronic communication alternatives.
This rate proposal should be an embarrassment to the Postal Service. In fact, this rate proposal is a signal that the oft-predicted economic "death spiral" of the U.S. Postal Service in the form of rising costs, rising rates, and declining mail volumes and revenues is about to begin. If this isn't enough to energize the business mailing community into taking a greater interest in postal policy and postal administration, then nothing is.