Direct Marketing Association's Jerry Cerasale on the U.S. Postal Service's Explosive Proposed Rate Hike
And that's where the Postal Service is right now. They're pushing the envelope here and forcing [the DMA and Affordable Mail Alliance] collective members to look elsewhere. And I think that doesn't make smart economic sense.
In addition, in the last quarter Standard Mail just started to grow over the year before; it had a 1 percent growth rate in mail volume. So here you had a sprout of new volume, and what [is the Postal Service] doing? They're coming in and smashing [mailers] with an increase that's 10 times the inflation rate. It just doesn't make any economic sense.
Now I can go a little bit toward the legal [side of the rate case] ... We view "extraordinary or exceptional circumstances" as being 9/11, [Hurricane] Katrina, the anthrax issues. Not something like diversion of mail to electronic communication; that's been going on for years, and it's been expected. Recessions are part of our economy, and all of the Postal Service's customers are in the same recession. They're not raising their rates; they're trying to grow business [without doing that].
So we think the Postal Service should look elsewhere before coming to customers first ... Last year, the inflation rate for postal costs was 6 percent ... whereas the CPI went down .03 of a percent. That's where the Postal Service should be looking [for funds]. That growth in cost in their operations (which they are now just pushing over to customers) and the drop in postal productivity, those are areas the Postal Service should be focusing on first rather than taking the easy way to try and bust the CPI cap-and I mean really bust it, from .06 of a percent to 5.6 percent.
TM: Does the Postal Accountability and Enhancement Act that passed in 2006 give the USPS enough latitude to address its business challenges?
JC: I think it does. They haven't tried enough to even show whether they need more—which, if they did, mailers ... would get behind them.