Mailers at Postal Forum Expect Rate Case Soon

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KISSIMMEE, FL - The upcoming rate case is a leading subject on the minds of attendees at the 2006 National Postal Forum, which opened yesterday.

Several people on the trade show floor speculated that the U.S. Postal Service would file the rate case with the Postal Rate Commission on April 17, the day after Easter.

"They are going to wait until after everyone's had a nice holiday and then hit them with the increase," said one mailer, who requested anonymity.

If the rate case is filed with the PRC on that date, rates likely will rise next spring.

Most everyone agreed the increase would be higher than the mid-single-digit estimate that USPS Board of Governors chairman James C. Miller gave mailers when discussing it last year.

And most mailers and mailing companies seemed certain that the rate increase would be more complex than the 5.4 percent across-the-board rise that took effect Jan. 8. That increase, the first since 2002, was needed solely to comply with a federal law enacted in 2003 requiring the USPS to establish a $3.1 billion escrow account.

"There will most likely be a lot of classification changes in the upcoming rate case this time around," said Michael Monahan, Pitney Bowes executive vice president and president, mailing solutions and services. "But change is good. It will give us the opportunity to show our customers and prospects how we can work with them to improve their mail processing based on any classification change."

A rate increase is unlikely to decrease the use of direct mail, Monahan said.

"Standard mail is a growing area for the postal service," he said, "and I don't see any sign of it slowing down. Of course, there may be more targeted mail as a result of the increase, but this is a good news for mailers and the postal service."

Monahan said he understood that the USPS plans to have smaller, more predictable rate increases in the future, but it is unclear whether the upcoming rate case will be structured in this way.

"I'm not sure where the postal service stands [on the issue] for this case," he said. "Maybe they will start small and have the smaller, predictable rates for a particular mail class. I just don't know."


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