*Mailing Associations, Pitney Bowes Urge for Rate Case Delay
Last week, the Postal Rate Commission, the oversight committee of the USPS, announced an overall 4.6 percent postage increase. The decision is now before the USPS board, which will make the final decision on the new rates during its Dec. 4-5 monthly meeting. If the board accepts the PRC's decision, which is probable, the increase could go into effect Jan. 7.
However, the Association for Postal Commerce, the Direct Marketing Association and Pitney Bowes Inc., Stamford, CT, are concerned that if the board rushes to implement new rates before software that the mailing industry uses in its preparation of mail has been properly installed and run, "there will be incalculable harm not just to mailers but to the postal service itself."
The letter said there is an impression within the USPS that "because this rate case involves a limited number of classification changes and because many of the implementing rules and policies were announced by the postal service earlier this year, software adaptation involves simply plugging new rates into an existing software scheme, a task that can be accomplished in a few days. That impression is utterly and entirely false."
For example, the letter said it takes at least 60 days after the vendors release the software package for mailers to put any new software through integration, modification and testing processes so it can be used confidently.
In addition, it said that in a typical medium-sized or large mailing, the mail preparation process actually begins some six weeks before the targeted dispatch date. Thus, vendors and mailers need a minimum of 120 days from the issuance of a rate decision before the revised software can be applied to a live mailing.
The letter disputed the proposition that the software only calculates postage and that once the rates are known, upgrades can be accomplished in a few days.
The letter also said it is wrong to assume that the implementation of the rates will be without complications.
"Some of the implementing rules were, indeed, announced by the postal service earlier this year," the letter said. "But, several critical implementing issues remain. For example, the question of what level of sortation and what type of packages will be qualified for the newly created drop entry rates in Bound Printed Matter remains unresolved."
Similarly, the letter said there is uncertainty as to the maximum weight of letters that will qualify for the standard automation rates. These questions involve hundreds of millions of pieces of mail. For many mailers, the process of implementing software upgrades, testing the upgrades, debugging them and retesting cannot begin until these questions have been answered.
The letter said software vendors and their mailer customers are moving as quickly as possible to complete the software upgrade process, and that it is entirely realistic to conclude that the process will be substantially complete by March 4.
"What is unreasonable and unrealistic, however, is to assume that the upgrade process is mechanical and can be completed as early as January or even February," the letter said. "Such a conclusion would not only be unfair to mailers but [affirmatively] harmful to the postal service itself."
The letter went on to say that if mailers are not given an appropriate time period within which to complete the software upgrade process, the postal service would suffer.
"Some mailers will simply refrain from mailing after the new rates take effect until they have completed the upgrade process," the letter said.
Finally, the letter said that while delaying implementation of the rates until March 4 would not cause the postal service economic harm, "premature implementation of the rates will. … The Board of Governors should announce, at its December meeting, the date on which rates will take effect, and that date should be not sooner than March 4, 2001."