No Postal Rate Hike Until January

Posted on by Chief Marketer Staff

IN LATE JUNE, the U.S. Postal Service Board of Governors approved an overall 2.9% increase in postage rates to take effect Jan. 10, 1999-the smallest rate hike in Postal Service history, according to board chairman Sam Winters.

“We’re delighted, we’re delighted, we’re delighted,” said Gene Del Polito, president of the Advertising Mail Marketing Association. “They finally listened to direct mailers, to the PRC and to their customers.”

Direct mailers will average a 1.2% increase, the same percentage recommended by the Postal Rate Commission in May. The first class stamp will go up to 33 cents.

More important to many mailers is the timing. By accepting the PRC’s January recommendation, the board has enabled DMers to avoid the financial and operational problems that would have resulted from a fall hike.

However, the board agreed to ask the PRC for clarification on the PRC’s proposals affecting three subclasses: parcel post drop-shipped at destination delivery units, within-county periodicals and library rates.

The board rejected courtesy envelope mail and prepaid reply mail, saying that there were serious questions about both.

“The rate adjustment is being made to provide a continuing investment in America’s communications future,” said Winters in a statement.

The last postal hike was in January 1995.

The board considered a 1998 implementation date, but was dissuaded by the following factors, according to Winters:

* Steady growth of mail volume, revenue growth and a positive net income forecast for fiscal year 1998.

* Readiness of postal management to accept new Postmaster General William J. Henderson’s challenge to find added cost efficiencies in 1999.

* Feedback from business and private customers.

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