Magazines, newspapers and direct marketers are girding for
the possibility that the U.S. Postal Service will pass an exigent rate increase
on top of the annual postal rate that is capped by the consumer price index.
The increase, made possible by a 2006 law that gives the postal service the
option to raise rates in case of extreme circumstances like a terrorist attack,
could be as high as 10 percent across the board. It couldn't come at a worse time for the media and marketing
industries that depend on mail service. "We're finally getting our footing back since the 2009
recession," said Mary Berner, president and CEO of the MPA, the
Association for Magazine Media. Magazines, for example, spend $3 billion
annually on postage. A 10 percent increase would add $300 million to an
industry that is already challenged. Some magazines could go out of business,
Berner warned. Others could cut back on mail delivery and redouble digital
efforts. But lobbyists are running out of time to convince the post office not
to jack up the rates. The Postal Board of Governors is scheduled to meet behind
closed doors on Sept. 5. Given that the U.S. Post Office is bleeding billions
of dollars each year, lobbyists fear a rate increase seems almost inevitable.
To fight the increase, the mailing industry brought back together the
Affordable Mail Alliance, a coalition of more than 50 organizations, including
the MPA, the Direct Marketing Association and the National Newspaper
Association. Three years ago, the group fought against the first exigent rate
increase and won, challenging it in court in a case that now lies dormant. In a
letter this week to the Postal Board of Governors, the group argued that a rate
increase would be self-defeating and could lessen the pressure on Congress to
enact much-needed postal reform. The group also asked the Board of Governors
for a personal meeting. "Right now, the [postal service] can't rationalize
their business. We're supportive of five-day delivery, consolidation of
facilities, and reduction in the cost of benefits," said Berner.
"This exigent increase is a distraction and it won't help the postal
system. We need to focus on legislation that gives the postal service the tools
they need." If the board of governors passes the increase (and all
expectations are that they will), the Postal Regulatory Commission will have 90
days to pass it. And if that happens, the mailing industry will be forced to
litigate, again. "That diverts time and resources away from coming up with
a long-term solution," Berner said.
