The Direct Marketing Association will sign on to the U.S. Postal Service's rate case settlement proposal, the association said yesterday. “The economic situation has changed since the postal service filed its case in September, and the postal service needs more money,” said Jerry Cerasale, senior vice president of government affairs at the DMA.
Cerasale said that if the settlement, which calls for an average increase of 8.7 percent, were not approved, the postal service likely would seek a rate increase of 12 percent to 15 percent.
“This was unconscionable to us, so we decided to move forward and see if we could get the settlement,” he said.
“Parties are expected to let us know by [today] whether or not they are signing on,” said Dan Foucheaux, chief counsel for the USPS and settlement coordinator. Foucheaux would not comment on how many mailers and trade groups have agreed to the proposal so far, but he said “it is encouraging. I expect the returns to roll in.”
The Alliance of Nonprofit Mailers also likely will agree to the settlement plan.
“I haven't decided exactly what we are going to tell the USPS yet,” said Neal Denton, executive director, Alliance of Nonprofit Mailers, Washington, “but I anticipate that we will tell them we are likely to be on board, subject to a positive statement by the Board of Governors that they do not intend to file [another rate increase proposal] again until the end of the fiscal year (which is in September).”
The board might make an announcement on this issue at its next meeting, Jan. 7-8, Denton said.
The DMA's decision is the latest in a flurry of activity involving the rate case proposal.
Late last month the postal service pushed back the planned date for a rate increase from June 2 to June 30. Many businesses, especially those with a fiscal year ending June 30, opposed the June 2 date, saying it would add to expenses at a time their budgets had no room for added costs.
In addition, the Postal Rate Commission has delayed rate case hearings until Jan. 9 and also extended the deadline for businesses planning to oppose the settlement proposal.