Even though mailers are grumbling about the rate increase recommendations by the Postal Rate Commission, many need to remember that most of them are lower than what the U.S. Postal Service asked for. That’s the good news. The bad news is that some mailers and list firms expect less prospecting as a result of the higher mailing costs, something that will hurt the USPS even more in the end. In their reply to the PRC’s recommendations, postal officials said they expect the economy to slow and mail volume to increase only slightly next year. They’re also projecting that population changes around the country will cause the number of addresses to increase by more than 1.7 million new delivery points.
A day later, the USPS’ Board of Governors unanimously called for postal reform — it was last done in 1970 — though it’s unlikely something this complicated will get through Congress any time soon given the close election results. Board members agree that the current financial situation will only worsen with time, as evidenced by postal officials saying they’re already expecting to lose nearly $500 million in fiscal year 2001. What this means is that this industry can expect even larger rate increases in the years to come.
