ABM: Postage Rates Go Up, Will They Go Up Again Next Year?
Thursday, July 05, 2001
7/02/01 - According to the ABM, July 1st marked the second Periodicals postage rate this year, as Periodicals rates climbed an additional 2.6% to reflect changes ordered by the Postal Service's Board of Governors. The Governors voted unanimously in May to modify the November 2000, recommended decision of the independent Postal Rate Commission. The bigger question on publishers'minds is when we will see yet another rate increase proposal from the Postal Service. Earlier this year, based primarily on the Postal Service's own dire predictions, it was generally believed that the Postal Service would file its request with the Rate Commission this month, in order to be able to increase rates around this time in 2002 (following the Rate Commission's 10-month process and allowing for some lead time for mailers). The request has been pushed back by a combination of better USPS finances (including the additional $1 billion annually from the July 1 increase) and pressure from mailers, including ABM, and Capitol Hill. The best guess now is that the Postal Service will file for an increase in the 10-15% range, probably in September or October, in order to be in a position to raise rates in 2002 by the fall mailing season, when advertising mail volumes peak. Deputy Postmaster General Nolan explained at the National Periodicals Focus Group meeting at the end of May that the Postal Service could always defer implementation of the approved increase until early 2003 if its finances improve, but that the Postal Service needed the ability to raise rates by the fall of next year if they do not. We expect that philosophy to govern the timing of the next increase.