ABM/SIIA Join Other Mailers in Renewed Fight Over Postal Rate Increases
NEW YORK—June 18, 2013—Two years ago, the Affordable Mail Alliance, a coalition of Postal Service customers including ABM, helped beat back a Postal Service request for an exigent rate increase that would have boosted mailing costs by as much as 8 percent for periodical mailers. During this time frame, ABM and other periodical mailers and associations also reached an agreement with Congressional sponsors of postal legislation to study how excess labor and facility costs negatively affect the cost coverage of products like periodicals that the Postal Service contends do not meet attributable costs, and to delay any related “underwater product” rate increase by two years.
Now, publishers and other mailers could soon be facing a similar two-front postal battle as the Postal Service prepares an exigent rate increase filing for both across the board rate increases and “underwater products” increases. The new exigent rate increase could boost postage rates by as much as 5 percent to 9 percent in January 2014.
ABM, through its parent organization the Software & Information Industry Association (SIIA), has once again joined the Affordable Mail Alliance to contest the future rate increase proposals. “We are members of the reinvigorated Affordable Mail Alliance, and we are lobbying Congress regarding 'underwater' products and postal reform, and have engaged with USPS senior leadership to explain the impact these increases will have on mailers,” said Mark MacCarthy, vice president, public policy with SIIA.
In addition to the exigent filing, ABM lobbyist Tom Carpenter thinks periodical publishers could face challenges in the Senate. “Given the continuing deterioration of USPS finances, some senators are openly calling for USPS to raise rates, especially for products that USPS says they are losing money on, like periodicals,” noted Carpenter. “We don’t believe the periodical cost coverage numbers are accurate, and we are actively lobbying Congress, but in this fiscal environment, it is harder to make that case.”
In some good news for publishers, a draft of postal form legislation circulated last week by Representative Darrell Issa, Chairman of the House Oversight and Government Reform Committee, maintains the agreement that ABM members and other periodical mailers and associations reached to delay any underwater rate increases for two years while a study is conducted to determine true cost coverage of “underwater products” like periodicals. The agreement also caps underwater product rate increases at 2 percent annually until a product reaches 90 percent of its attributable costs.
Building the Case
In 2011, ABM surveyed its members to gauge how postal rate increases would affect volume, with results showing that increased rates on periodicals would only further USPS losses as volumes declined and magazines were shuttered. That data helped drive ABM’s successful policy arguments on Capitol Hill to delay “underwater product” surcharges.
This week, SIIA and ABM will launch a new member survey to capture the membership’s scope and size in the mail stream and to understand how rate increases could drive periodical volume down.
Members of the Affordable Mail Alliance include:
- Alliance of Nonprofit Mailers
- American Catalog Mailers Association
- Direct Marketing Association
- MPA—The Association of Magazine Media
- Association of Marketing Service Providers
- National Newspaper Association
- Quad/Graphics
- RR Donnelley
- Software & Information Industry Association
