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BREAKING NEWS & VIEWS
Mailers Call to Dismiss USPS Rate Requests While the USPS contends that recessionary pressures on mail volume have dramatically worsened the service’s position, the AMA contends that economic downturns are typical and generally weathered by all businesses. Additionally, the group argues that the increased use of digital communications has been impacting the USPS business for over a decade, and the company should have been reengineering its business all along. By comparison, the AMA cites more severe revenue declines at UPS and Federal Express that both rival firms met with more aggressive cost cutting than did the USPS. In a motion filed with the PRC, the AMA states, “Had the Postal Service merely held its costs to the level of inflation in the general economy, the Postal Service would have made a profit in 2009." Rate hikes now will only further undermine the USPS business and curtail investment in permanent remedies, the group argues. The Magazine Publishers of America, a member of the AMA, voiced support for the motion. President and CEO Nina Link said, “This is a major step in MPA's fight against the USPS' unlawful attempt to shatter the price cap. MPA supports all efforts by this unprecedented alliance of the mailing community to continue to litigate aggressively. We hope the Postal Regulatory Commission grants the motion without delay.” When it comes to the periodical rate paid by magazines, however, this segment of mailers may have a tougher time than others fighting increases. The USPS is proposing an 8% increase for periodical class mail, the highest among the proposed hikes. But in min’s exclusive interview with Postal Regulatory Commission chair Ruth Goldway recently, she seemed inclined to agree with the assessment that magazines actually have been underpaying for a number of years. Goldway pointed out that periodical rates had fallen behind years ago in covering the actual costs of processing the mail. “On the face of it now, this 8% increase that they are presenting is something that is justified,” Goldway told us. “We completely disagree with her apparent conclusion that magazines are underpaying,” James Cregan, EVP of government affairs, MPA, told minonline. “If the case proceeds to the evidentiary stage we will present ample evidence that chairman Goldway’s apparent conclusions are not supported by the evidence. We are confident we will prevail.” As we reported on minonline on July 12, Goldway acknowledges that a more thorough evaluation of the costs of handling magazines is under way. “We may get different information,” she told us. Goldway expected the issue of periodical costs to be hotly contested. “But the bottom line is that the requirements for now of the law means that the Postal Service and the Postal Regulatory Commission are supposed to make sure that periodicals cover their cost.” Cregan says that the current filing to dismiss the USPS request out of hand could be ruled on in the next week or held for further consideration and hearing of evidence. If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com COMMENTS
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