The Demise of Direct Mail? PRC Approves 4.3% Exigent Increase

Share this content:
The Demise of Direct Mail? PRC Approves 4.3% Exigent Increase
The Demise of Direct Mail? PRC Approves 4.3% Exigent Increase

As business mailers were shutting down the office lights and heading out for the Christmas holiday on December 24, the Postal Regulatory Commission (PRC) played Bad Santa in the eyes of those mailers, handing down a decision approving the U.S. Postal Service's full 4.3% request for an exigent rate hike on Standard Mail. Come January 28 marketers and catalogers who depend on the mail to deliver their appeals to consumers will be paying 5.9% more for postage with the CPI-based increase of 1.6% added in.

Mailers, who had hopes that the PRC might approve a modified exigent increase of under 2%, expressed major disappointment. A coalition of mailers that argued before the PRC that the USPS's use of the Great Recession as the exceptional circumstance for exigency was without merit called the PRC's action an “unmitigated disaster.”

The only saving grace of the PRC's decision is that it limited the rate increase to two years, after which it determined that losses due to the recession should be fully recovered. The decision was reached on a 2-1 vote of commissioners, with PRC Vice Chairman Robert Taub dissenting.

“The PRC is the Grinch this Christmas,” said Jerry Cerasale, outgoing SVP of government affairs of the Direct Marketing Association and an ex-PRC staffer. “At least they said that this outrageous postage increase will be phased out. Sadly, they Commission did not set a date for the phase-out.”

In a statement released after the decision was announced on Christmas Eve, the mailers coalition said that “generations of customers will pay for an undeserved postage rate increase that is triple the inflation rate. Worse, this rate increase does not fix what is wrong with the Postal Service, will further depress mail volume, and will worsen the Postal Service's financial woes.”

In letter to members of the American Catalog Mailers Association, a coalition member, President and Executive Director Hamilton Davison expressed frustration over the PRC's move. “Despite an all-out mailing industry full court press to convince the Postal Regulatory Commission the USPS's request for an exigent rate increase was ill-conceived and failed to demonstrate true exigency, the PRC approved the full 4.3% increase,” Davison wrote in an email. Other members of the coalition include the Direct Marketing Association, Association for Postal Commerce, Quad/Graphics, and R.R. Donnelley.

In its comments to the PRC last month the coalition argued that digital mail alternatives such as email and not the recession were the chief reasons behind the Postal Service's huge decline in mail volume. As a competitive business situation, digital alternatives would not meet the requirements of an exceptional circumstance for exigency, the group argued.

The only other time the Postal Service requested an exigent increase, one for a 5.6% hike in 2010, the PRC shot down the appeal, saying the stated exception circumstance was not valid. That circumstance? The Great Recession.

Loading links....

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here