Eleventh-Hour Debate Over Parcel Rates Could Kill Postal Reform

Posted on by Chief Marketer Staff

(Multi Channel Merchant) As the House and the Senate mull the merits of enacting postal reform, it appears that 11th-hour lobbying efforts brought by private-sector package delivery firms over parcel rates could threaten postal reform, according to Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association.

Private delivery firms, Cerasale says, are pushing for language in the House bill that could result in an increase of up to 40% in Parcel Post rates, the benchmark that many private carriers use for setting their own delivery fees.

Cerasale says that not only would the addendum result in higher costs to consumers for sending packages via the Postal Service or private carriers but that the current debate poses a serious threat to the effort to pass postal reform legislation before Congress adjourns for the year. “Without the legislation, all mailers face significantly higher costs that could ultimately result in drastic reductions in mail volume and further revenue losses for the U.S. Postal Service and the businesses–both upstream and downstream–that rely on the USPS,” he says.

The DMA advocates a cap, tied to the rate of inflation, on postal rate increases for all classes of mail.

“We are so close to achieving postal reform, it would be a shame for it to be derailed this late in the game,” warned DMA president/CEO John Greco Jr. in a statement. “The private-sector parcel delivery companies are being shortsighted in not considering the immediate need for legislation that would stabilize postal rates for all types of mail, including Parcel Post. In the long run, higher shipping rates could mean far fewer packages to deliver.”

In a Sept. 25 press release, the DMA all but named Atlanta-based United Parcel Service as a leader of the lobbying efforts. But when reached for comment, David Bolger, spokesperson for Atlanta-based UPS, says his firm squarely supports the pending postal reform legislation. “We support postal reform as the bills have been passed, and that’s the message that we’re communicating in our meetings with senators and congressmen,” Bolger says. “We want a healthy, viable, financially sound USPS.”

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