At the US Senate Committee on Homeland Security and Governmental Affairs’ September 19th hearing, “Outside the Box: Reforming and Renewing the Postal Service, Part I – Maintaining Services, Reducing Costs and Increasing Revenue Through Innovation and Modernization,” business mailers faced a barrage of resistance from Committee members and some panelists on the extent to which postal rate increases can force mailers to reduce their mail volumes – actions that would further hurt USPS finances and seriously hinder catalogers and other mailers.

Overall, some of the key takeaways include the following:

  • Senator Tom Coburn (R-OK) and members of the Committee don’t seem to get that postage represents more than half of many mailers’ operating expense. Few other industries have a single cost component of this magnitude.
  • The USPS wants the flexibility to change prices easily and quickly yet the number of rate cells and complexity, along with PostalOne! and other software changes don’t allow them to react quickly.
  • There’s a significant misconception among Committee members that when mail volume, especially catalog mail volume, tumbled in excess of 25% after the 2007 postage increase, it was caused by the economic recession rather than the rate hike.

Below is a list of links to news reports filed on the hearing, including a link to a replay of the hearing itself. Click on the headlines…

Link to Hearing Replay

Higher Prices Forced by Congress Inaction, U.S. Postmaster Says
Bloomberg Businessweek

Postmaster Says Agency is Amid ‘Financial Disaster’ and May Need Emergency Rate Hike
Washington Post

The Postal Service Could Be Totally Out Of Cash By November
Business Insider

USPS may need emergency rate hike
Herald Sun (Melbourne, Australia)

Postal Service Warns It May Need Emergency Rate Hike
Daily Finance (New York)

Postmaster General: Post Office In Midst Of Financial Disaster
CBS News (New York)

Postal Service May Seek Emergency Rate Increase- Lawmakers may end the Postal Service’s Saturday delivery
Investorplace (Rockville, MD)

USPS About To Run Out Of Cash, May Need Emergency Rate Hike
Consumerist (Yonkers, NY)

U.S. Postal Service Cash Vanishing
24/ Wall Street (New York)

Postal Service to Default on Retiree Health Care Payment – Again
Federal Times (Gannett – Springfield, VA)

Senator Coburn Blasts Rate Cap in Postal Hearing
Direct Marketing News

Postmaster General Says USPS in Midst of Financial Disaster
Multichannel Merchant

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