Mailers Call for Postal Overhaul

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Mailers frustrated by the second postal rate increase in six months urged legislative reforms yesterday at a congressional committee hearing on the U.S. Postal Service's cloudy financial future.

Speaking before the U.S. House of Representative's Committee on Government Reform, mailer advocates renewed their call for Congress to force the USPS to seek ways of reducing costs to cover budget shortfalls instead of raising rates incrementally.

The postal service is facing a projected $1.6 billion to $2.4 billion shortfall this year. Some postal watchers have blamed the impending deficit on poor management practices at the USPS.

Mailers who testified at the hearing said rate increases and a proposed curtailment of Saturday deliveries would do the USPS more harm than good. Higher rates and less service will drive postal users away, they said.

"Rather than continually raise rates, the postal service should follow the lead of the private sector in reducing costs as rapidly as possible," said John Campanelli, president of R.R. Donnelley Logistics, Chicago.

Direct Marketing Association senior vice president Jerry Cerasale reiterated the complaint of many mailers that businesses would suffer the bulk of the rate increases while First-Class rates would increase only minimally. Cerasale, who spoke on behalf of the Mailers Council, described a vicious circle in which USPS rate increases inevitably lead to more rate increases.

"Implementing large increases guarantees that many mailers will mail less often or stop completely," Cerasale said. "If that occurs, mail volumes will decline even further, creating the need for yet another rate increase."

Mailers called for postal reforms to focus on increasing productivity in the postal service. They blamed the restrictive system of salary and incentives created by the 1970 Postal Reorganization Act for the lack of productivity growth within the USPS.

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