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In Joint Filing, More than 50 Mail Industry Leaders Urge Regulators to Reconsider Dramatic Postal Rate Increases

2/28/2018

WASHINGTON — Today, an unprecedented coalition of more than 50 leading associations, companies, nonprofits, magazines, newspapers and other stakeholders joined forces as the American Mail Alliance to advocate for a common sense approach to setting new postal rates, promoting the long-term health and success of the United States Postal Service (USPS), and opposing the radical postal rate increases proposed by the Postal Regulatory Commission (PRC), the independent regulatory agency tasked with USPS postage rate oversight.
 
The American Mail Alliance represents the vast majority of mailers, by volume and revenue, in the $1.4 trillion mailing industry. The coalition has come together as the PRC takes the next step in its 10-year review of postage pricing. As part of that process, the PRC has proposed a dramatic increase in postage rates by as much as 40 percent over five years.
 
In a major filing today with the Postal Regulatory Commission, American Mail Alliance members argued that the PRC’s proposal will do lasting harm to the Postal Service and ultimately to the American people. Such a dramatic increase in rates will put many mailers – such as nonprofits – out of business.
 
“Nonprofits don’t just use the Postal Service to communicate with their members, they rely on the Service for their financial survival. The PRC proposal will shift dollars away from nonprofits and others, and totally decimate programs and outreach that so many Americans rely on,” said Stephen Kearney, the executive director of Alliance of Nonprofit Mailers who previously served as a senior executive at the Postal Service for more than 30 years.
 
The PRC is an independent agency with representatives from both political parties: Robert G. Taub (R), Tony Hammond (R), Mark Acton (R) and Nanci E. Langley (D). 
 
“The PRC must focus its attention on demanding higher productivity levels and improved efficiency at USPS before imposing punitive rate hikes,” said Linda Thomas Brooks, president of the Association of Magazine Media. “Increasing rates will only serve to harm customers, businesses, and USPS itself. The PRC proposal comes at a time when the Postal Service is fighting to retain business. Therefore, the USPS’s remaining customers should be encouraged to stay with USPS, not penalized with higher rates. The PRC has to concentrate on streamlining and modernizing the Postal Service. Throwing mountains of cash at the Postal Service’s problems and hoping that it works is not the solution.”  
 
The PRC is tasked with balancing multiple criteria when establishing rates, but this proposal elevates one criterion – giving the Postal Service more revenue by raising rates – and ignores all other considerations.   
 
“It’s not too late,” continued Kearney. “There’s still plenty of time for the PRC to reconsider its approach and produce a balanced approach that considers all nine criteria that the law stipulates.”
 
The American Mail Alliance submitted its joint comment on February 27. To view the full filing, click HERE.
 
Below please find key excerpts from the American Mail Alliance’s joint filing with the Postal Regulatory Commission.
 
AMA’s members unanimously believe that the Commission rulemaking proposal will do lasting harm to the Postal Service.  It will put many mail and supply chain stakeholders out of business, force them out of the mail, or push them to find – or create – alternative, cheaper, and more stable distribution methods.
 
[…]
 
The proposed rule comes at a time when the Postal Service is fighting to retain business.…What rational business dramatically raises price in a competitive environment of reduced demand?  
 
[…]
 
To varying degrees, we have significant reservations about whether the Postal Service has made wise operating choices in handling certain types of mail, including “underwater products.”  But, the plain truth is that for those products, an extra two percent per year on top of the huge base rate change proposed for all Market Dominant products, compounded, will be devastating.
 
[…]
 
The Postal Service is a unique institution, which makes comparisons with other businesses tricky.  But this is not the first time a venerable enterprise with a long history has confronted a crisis. The history of U.S. commerce is brightened by companies that have achieved remarkable turnarounds.  Corporations such as Apple, Chrysler, Disney, HP, IBM, and others have faced near disaster.  The key to a successful turnaround or reinvention often depends on a particular set of circumstances, but there is one thing you will not find. There is no precedent for an organization in any industry that succeeded through exorbitant price increases in the face of weak demand. 
 
To read more about the American Mail Alliance visit, www.AmericanMailAlliance.com.

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