The Association of Magazine Media

Good News on Two Postal Fronts As 2011 Draws to a Close

At the end of a year that saw postal concerns multiply and media coverage of the Postal Service’s financial woes reach a fevered pitch, publishers got much needed relief in two key areas – rates and service – at the year’s close. In the rates department, having secured approval of an inflation-based 2.1% rate increase that will go into effect January 22, 2012, it appears that USPS will not continue its pursuit of an above-inflation exigent increase – which could have reached 8 % for Periodicals – at this time. Regarding service standards, having proposed to eliminate the overnight delivery service standard for destination-entered Periodicals in September, USPS responded to the resulting outcry from publishers, and has agreed to maintain an overnight delivery standard for Periodicals arriving at destination facilities by designated critical entry times.

While the door is not completely closed on a potential future exigency increase, on December 20, 2011, the Postal Regulatory Commission issued an Order in the remand of the exigency case originally filed by the Postal Service in July 2010. The Order stated that the Commission would not continue its deliberations in the case until the Postal Service filed a “complete case”, including a schedule of proposed rates. The Postal Service had earlier expressed its interest in pursuing the exigency case further at the Commission. On December 5, 2011, MPA, in conjunction with the Direct Marketing Association, Postcom, and the Alliance of Nonprofit Mailers, sent a letter to Postmaster General Pat Donahoe, urging the Postal Service to withdraw the case at the Commission. The letter articulated the negative impacts of the lingering exigency request, from the dampening effect of rate uncertainty on mail volumes to the diversion of resources that could otherwise be used in support of much needed postal reform legislation. While the Postal Service has not formally withdrawn the case, the PRC’s Order effectively puts further consideration of the case into indefinite abeyance.

The changes in service standards are part of the Postal Service’s recently announced network optimization plan. The plan, designed to save billions of dollars annually, anticipates a reduction in the number of processing plants by more than half, from almost 500 now to about 200. As a result of the increased service areas of the remaining plants, the Postal Service in September announced the elimination of the overnight delivery standard for both First-Class Mail and Periodicals. MPA expressed grave concern about the proposed changes for Periodicals in comments on the Advance Notice of Proposed Rulemaking. Overnight delivery is a key requirement for daily and weekly publications, without which MPA explained publishers would have no choice but to hasten a shift to electronic or alternative delivery for time-sensitive Periodicals. MPA was pleased with the revised proposal, which came out last month. The revision retains an overnight delivery standard for Periodicals as long as publishers get their mailing to destination facilities by the critical entry time. This change, however, does not eliminate all concerns for time-sensitive publications, as critical entry times at most facilities are being changed to require entry significantly earlier in the day. This is the result of the Postal Service’s effort to eliminate manual handling of Periodicals by having all publications in plant by the start of the automated machine processing window. MPA will continue to monitor these changes, which have now been submitted to the PRC for an advisory opinion.