Industry News Postal rates likely steady
Despite speculation that mailers could face a 2 percent to 3 percent rate increase next May, the U.S. Postal Service has signaled that rates are likely to remain unchanged.
“We have an extreme prejudice" against making a rate change next year," Postmaster General John E. Potter told publishing executives at the Magazine Publishers of America’s Innovation Summit, held in New York.
The post office logged its 11th quarterly loss in the last three years in August, and has seen a dramatic decline in volume since 2006. In 2008 the post office handled 202.7 billion pieces, and by 2010 expects to handle only 160 billion.
Cathie Black, president of Hearst Magazines, noted that magaine mailers contributed 7 billion pieces to the mail flow last year, at a cost of roughly $3 billion. Of those, 90 percent were copies being mailed to subscribers.
Potter noted that a final decision has not been made on rates, but said, "These problems are a national issue. The American people own the postal service. We need to have conversations with all the stakeholders who care about what happens to the postal service.”
Potter said the postal service is working to improve efficiency and cut costs. It has cut 115 million work hours per year, reducing its overall workforce by 50,000. He said the USPS would continue to look for solutions that will allow it to provide stable service and rates to magazine publishers. "This yo-yo effect, in terms of what services mailers will get or won’t get, isn’t healthy for the industry,” he said.
