Exigent Postage Rate Increase

In March, Postmaster General John E. Potter announced that in just four years, the USPS is estimated to experience a record mail volume decline from 213 billion pieces in 2006 to 168 billion in 2010. This drop of 20% has heads turning and people scrambling to develop a manageable solution to reverse this troublesome trend.

Last month Potter stated his intent to use an exigent rate increase as part of a larger plan to help close a portion of the gap, effective in 2011. According to postal law, the USPS has the ability to raise prices beyond the rate of inflation due to ”extraordinary circumstances.” In order to put such an increase into effect, the USPS must file a proposal and have it approved by the Postal Regulatory Commission. There has been much debate whether a poor performing economy actually constitutes an “extraordinary” circumstance.

Although Potter indicated last month that “we are not talking about anywhere near double-digit increases,” most feel that an increase of any amount will only exacerbate the declining mail volume issue. According to Jerry Cerasale, senior vice president of governmental affairs for the Direct Marketing Association, “DMA believes that a greater than CPI increase will harm all direct marketers who use the mail, especially cataloguers.”

The request to increase postage won’t be submitted until the early fall, so there is time to stand up against this proposition. If you have concerns about how this possible increase would affect your direct mail plan, e-mail us your apprehensions and join our coalition so we can protest as a united front.