Special Report: The Shape of Things to Come

June 2007

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As I write this, it’s a week before the May 14 implementation date for the majority of the rate increases and mail prep changes associated with the 2007 postal rate case. And while mailers are focusing their attention on these current challenges, they just might get caught looking the wrong way as the bigger postal picture gets tuned. The hard work of mapping out the new structure for the U.S. Postal Service (USPS) and its customers is just starting, says Bob McLean, executive director of the Mailers Council, an Arlington, Va.-based organization that represents marketers on postal policy and legislative issues.

Target Marketing spoke with McLean to get a sense of how the postal system is changing, and what mailers need to know to make sure they are a part of the discussion on the USPS’ future.

Target Marketing: What is the current state of affairs for the USPS?
Bob McLean: The biggest change for them is the rate process. But to take a step back for a second, there are more than a dozen studies required by the postal reform act. Some of these are to be carried out by the postal service, many of them by the Postal Regulatory Commission and one of them jointly, which will determine the new rate setup. Some of them will be done by the GAO, and some by the FTC. And all of them are to be reviewed with the oversight of Capitol Hill … The two biggest of all these studies are … the one [that involves] coming up with a rule for the new rate process and another one that is very important to mailers, [which] is the requirement to create a system for delivery standards and measurement systems to see if [the USPS is] meeting these new standards. That’s huge for mailers, because right now we do not have a structured performance measurement system for most of the classes of mail that most mailers care about.



TM: What rate increase schedule is likely to take shape under the new rules?
BM: Most people are expecting annual increases, once the USPS files the first case under the new rule. And right now the Postal Service hasn’t decided whether or not it’s going to file another rate case under the old rule. … I think that they got a lot more opposition from their customers and they certainly got a lot more opposition from Capitol Hill at the recent oversight hearings in the House and in the Senate. … Formally, the Postal Service has yet to decide, and at this week’s Board of Governors’ meeting, it did not come up.

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