Mailers Council Warns That USPS May Price Itself Out of Business

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The Mailers Council, the nation's largest coalition of mailers, called on the U.S. Postal Service yesterday to reconsider plans to file a double-digit rate increase this summer, warning that the increase soon could make the USPS unaffordable to many business mailers.

The USPS, which predicts a loss this fiscal year of $2 billion to $3 billion, announced plans last month to file a rate case early this summer, with expected increases of 15 percent.

In the past week the council sent letters to the chairmen of the postal service's Board of Governors and the House of Representatives committee that oversees the postal service, warning that "the contemplated postage increase would be counterproductive to the postal service's goal of increasing revenue," said Bob McLean, executive director at the Mailers Council.

"We know from experience that a double-digit increase will devastate volume in the months immediately following the new rate implementation," McLean said. "This time, such plans will ensure permanent volume losses in several mail classes. Many small businesses that use the mail exclusively to market their businesses and small publishers that operate on exceptionally thin margins simply cannot absorb two large postage increases within a 13-month time period."

McLean added that the USPS should consider alternative steps in response to declining revenues.

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

"It is now obvious that the postal service cannot afford a work force of almost 800,000 employees," he said. "Instead of raising rates, the postal service must find a way to substantially reduce the size of its work force, which today represents over 76 percent of its operating costs."

The Mailers Council is the latest mailing group to argue publicly against the rate increase. Other groups that have vocally opposed the increase over the past two months include the Association for Postal Commerce, the Direct Marketing Association and the Magazine Publishers of America.


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