The Postal Regulatory Commission has recommended approval of a proposed negotiated service agreement (NSA) with Life Line Screening that would allow the mobile health screening service providers to earn discounts for Standard Mail letter volumes that exceed specific volume thresholds.
The NSA, a special service and rate arrangement between the USPS and a mailer or group of mailers, must be approved by the US Postal Service Board of Governors before going into effect. The USPS first filed a formal request with the commission seeking approval for the agreement in August of 2007.
In testimony, Eric Greenberg, VP of marketing at Life Line, told the commission that in the absence of the NSA, e-mail communications would likely be used to supplement direct mail.
The USPS expects to receive $5.4 million in additional revenue over the three-year period of the agreement, according to testimony given by Michelle K. Yorgey, a marketing specialist in the USPS’s pricing strategy group.
In its decision, the commission warned that NSAs focused entirely on volume incentives — like the Life Line Screening agreement — have been “markedly less successful” than those based on cost savings incentives.
The Life Line Screening NSA will be the last case in which the PRC will make recommendations under the Postal Reorganization Act of 1970. In the future, the commission will review agreements under the Postal Accountability and Enhancement Act of 2006. Under the new act the PRC’s role will be altered.
In a decision also dated May 29, the USPS Board of Governors approved a NSA with The Bradford Group. The agreement will provide the fine collectibles direct marketer with discounted rates on Standard Mail letters and flats solicitations based on specific volume thresholds. The three-year agreement is expected to generate a net benefit of $6.5 million in contribution for the USPS, according to the board.