Rate Case Coming, Potter Warns

A NEW RATE CASE SEEKING A postage increase in 2007 is about to be filed with the postal Board of Governors, said Postmaster General Jack Potter during his keynote address at the National Postal Forum in Orlando, FL.

The next hike is supposed to keep the U.S. Postal Service at break-even through 2008. The USPS plans to institute annual postage rate changes at or close to the inflation rate starting in 2009, as part of its “strategic transformation plan,” Potter said.

Meanwhile, the PMG defended incremental increases.

Sure, January's 5.4% boost in postage could've been delayed one year, but it's better to make smaller, more manageable hikes to avoid the “rate shock” that's bound to occur with extremely large jumps, Potter said. He added that another rate adjustment will be necessary to offset higher costs, particularly fuel expenses, which have gone up by $1 billion a year.

In other news, direct mail volume rose to a record 212 billion pieces in 2005. Contrary to predictions that postal mail would be in steep decline because of e-mail growth, direct mail is being used in tandem with Internet advertising, the PMG said. For companies like eBay and Netflix, direct mail has been a big part of their success, he added.

A new four-state barcode for tracking mail probably will be out in September. It will eliminate the need for separate barcodes for different postal services. Potter told mailers that tests of the new barcode have been successful thus far.