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DMA Strongly Opposes USPS Request for Rate Increase
“We question the need for a rate increase at this time, and strongly believe that it will further damage the economic viability of the Postal Service,” said
The Postal Service’s rate increase request proposes to raise rates an average of 5.6 percent, but in order to reach that average, the increase on some mailers will be dramatically higher. The proposed increase for small parcels, for example, is 23.3 percent, something that would be devastating to many companies. A rate increase would force business mailers to look for alternative methods of communications.
These increases will hasten efforts by mailers to shift to other channels of communications.
DMA strongly questions the assumptions underlying the Postal Service’s request for a rate increase, namely that it will generate some $2.3 billion in new revenue over a 9 month period. In the period following the last rate increase in May 11, 2009, in the next year, mail volume decreased by an additional 5 percent (above the previous 13 percent) and DMA strongly believes that this new increase would have the same, if not a more dramatic, effect, and drive away even more business mail, which accounts for some 85 percent of the Postal Service’s revenue.
DMA strongly supports a vibrant and fiscally sound Postal Service, and believes that there are many ways for the Postal Service to get its financial-house in order without an increase in postal rates. On many occasions, the Postmaster General has said that there is excess capacity in the system, and that there may be opportunities to downsize the system and the labor force. In addition, there are new product lines and business opportunities that the Postal Service can and should pursue, most of which were outlined in the Postal Service’s 21st Century presentation on March 2, 2010.
The Postal Regulatory Commission (PRC) has 90 days to review the USPS rate increase request. DMA will strongly oppose the request at the PRC, and make its views known before Congress.
For more information please visit www.dmaaction.org.
About Direct Marketing Association (DMA)
The Direct Marketing Association (www.the-dma.org) 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 companies from dozens of vertical industries in the
In 2009, marketers – commercial and nonprofit – spent $149.3 billion on direct marketing, which accounted for 54.3% of all ad expenditures in the
The Power of Direct: Relevance. Responsibility. Results.
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