The Postal Rate Commission has given its approval to the U.S. Postal Service’s first Negotiated Service Agreement (NSA).
The agreement is between the postal service and Capital One Services Inc., the USPS’s fourth largest customer and the nation’s largest single producer of first-class mail.
The Direct Marketing Association said it was pleased that the PRC endorsed the basic concepts of the agreement and hoped it would lead to more system-wide use of such arrangements in the USPS.
Under the agreement, for the next three years Capital One will be eligible for volume discounts if its annual first class bulk volume exceeds 1.225 billion pieces. As part of the deal, the USPS will avoid the costs of returning undeliverable Capital One first class letters.
Last fall, the USPS Board of Governors filed what was then termed an “experimental case with the PRC” to launch the NSA with Capital One.
“I think it’s great,” said Gene Del Polito, president of the Association for Postal Commerce. “The USPS has made an agreement with a company that uses a lot of first class mail for its marketing and billing and I hope we see more.”
He noted the USPS is probably doing this because it wants to help stave off companies from making all their communications electronic (Direct Newsline. Sept. 6, 2002).
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