Regulators told to consider rate shock

Pulp & Paper, May 2007

POSTAL RATES

The US Postal Service board of governors told the Postal Regulatory Commission (PRC) to think again about the rate hike it wants for Standard Mail flats (catalogs) and said it had only approved that part of the commission's proposal under protest. Rejecting the rates outright would have meant starting the 10-month process again.

The board also told the PRC its nonmachinable surcharge for First-Class letters and Priority Mail Flat Rate Box charges would "benefit from further consideration," and delayed the PRC's rate hike for magazines and newspapers until July 15. The other rate increases start May 14.

The hikes are all part of a complicated series of increases approved March 3 by the PRC. These hiked the price of a firstclass stamp 5.1% as expected, but surprised marketers by reconfiguring the Standard Mail category to give direct mail catalogers as much as a 41% higher increase, according to the Direct Marketing Association (DMA). The US Postal Service had not asked for or proposed such an increase.

In a statement, the board said it was worried such a steep increase might harm the catalog industry, adding: "The longterm interests of the Postal Service and its customers are served by a healthy catalog industry that creates interest in the mail."