June Postal Rate Increase Part of Settlment

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Postal rates could rise as early as June if the U.S. Postal Service gets its way in a series of discussions about a negotiated rate case settlement. The date is four months earlier than many anticipated.

Postal officials have been meeting with executives from major mailing companies and mailing groups over the past several weeks in hopes of reaching an agreement. A rate case settlement has never been fully executed. A settlement means that all parties agree not to take the case to the oral and hearing stages and, instead, approve the current numbers. If approved, rates would rise an average of 8.7 percent across the board.

If a settlement isn't agreed upon, the USPS has told those involved that it most likely would revise the numbers and seek to increase rates as much as 19 percent, said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association.

Dan Foucheaux, chief counsel for the USPS and settlement coordinator, would not comment on the discussions.

Last month, the postal service distributed a confidential draft proposal to the more than 30 participants, including ADVO Inc., McGraw Hill, the DMA, Postcom and the Alliance of Nonprofit Mailers. Reportedly, besides the June implementation, the USPS' settlement proposal also would not preclude the postal service from filing another rate case at any time.

"It looks to me like the postal service will get the votes they need," said one source close to the situation, though the real decision would come when the Postal Rate Commission receives such a negotiated settlement.

However, Neal Denton, executive director of the Alliance of Nonprofit Mailers, Washington, said that if the postal service insists on June for the rate increase, "then the chances are very unlikely."

When asked whether the DMA supports a settlement in which rates are implemented in June, Cerasale said, "The DMA is not in the position to decide it. This is a membership decision. That idea is clearly on the table, and we are asking our members what they think."

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