Mailers Ask PRC to Reject Exigent Increase Proposal

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Mailers: Recession has nothing to do with rate hike.
Mailers: Recession has nothing to do with rate hike.

A coalition of postal customers and suppliers filed comments with the Postal Regulatory Commission asking it to reject the U.S. Postal Service's request for a 4.3% exigent rate increase. Their bottom line: USPS's claim that the rate is needed to offset lingering effects of the Great Recession doesn't meet the exceptional circumstance criteria established by the 2006 Postal Accountability and Enhancement Act.

“You could drive a mail truck through the holes in the Postal Service's arguments,” says Jim Cregan of the Association of Magazine Media, one of 13 entities named on the filing. “The main reason for declining mail volume over the last seven years is digital diversion—the long-term trend toward electronic correspondence, Internet advertising, and electronic bill presentment and payments.”

The filing was backed by testimony from Christian Lundblad, a finance professor at the University of North Carolina, who said that the Postal Service's assumptions that recessions continue to deepen ad infinitum were “a nonsensical notion.” Lundblad also said USPS's exigency request disregards all the positive effects the 2009 recovery had on mail volume.

Mailers claim that an economic study referenced by the Postal Service in its exigency request holds that the recession hit USPS 10 times harder than it did the GDP.

“If you take the Postal Service's study at face value,” says Tony Conway of the Alliance for Nonprofit Mailers, “then all of the mail volume losses since 2007 are the result of the recession and none result from digital diversion.”

Other organizations named in the filing include the Direct Marketing Association, the American Catalog Mailers Association, Quad Graphics, R.R. Donnelley, the Alliance of Nonprofit Mailers, and the Major Mailers Association.

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