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DMA Calls for Postal Reform, Not Rate Increases

The Direct Marketing Association again declared its support for legislative postal reform on Friday.

The Governors' call for reform comes on the heels of the U.S.Postal Service requesting an additional $700 million in increases above and beyond the rate increase it won in November 2000. In addition, the USPS this summer will seek a 10-15 percent overall rate increase that likely would take effect in the summer of 2002.

“Another request for increases in postage rates is only a Band-Aid on a wound that requires major surgery. Reform is needed and needed quickly – neither partisanship nor business-as-usual can be allowed to stand in the way of reform,” said H. Robert Wientzen, president/CEO, the DMA. “Continued reliance on rate increases will make the USPS less competitive in the marketplace, jeopardizing its long-term health, and will send business mailers away in droves.”

The DMA has repeatedly called for reform of the 31-year-old laws that continue to shackle the post office in the face of mounting electronic communications and private sector competition.

“The postal service must be allowed to compete more effectively with new electronic and private sector competitors if universal postal service is to be continued,” said Jerry Cerasale, senior vice president, government affairs, the DMA. “The postal service cannot be handcuffed by arcane regulations that hamstring its ability to effectively manage its workforce and its pricing structure.

Cerasale also said that the current law governing postal operations was drafted when e-mail and the Internet were more science fiction than business reality.

In addition, Cerasale said the postal service should be given the freedom to set its rates in a less cumbersome manner if it is to remain competitive with the private-sector companies against which it must compete for delivery services. Beyond pricing, the USPS must also be given the leeway to expand into new services as the communications market continues to evolve.

Cerasale said that like other businesses, the USPS faces fiscal challenges brought on by increasing wages, escalating fuel costs and emerging electronic competition. But, unlike other businesses, the USPS is legislatively and regulatory constrained from making the changes necessary to capitalize on and profit from these alterations.

The DMA continues to call on Congressional leaders to re-introduce the Postal Modernization Act of 1999, which did not make it to the floor in the 106th Congress. This bill would modernize the legislative and regulatory environment that surrounds the Postal Service. The bill would also give the USPS the business flexibility it needs to compete in the rapidly changing communications and delivery environment.

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