How Long Will Rate Relief Last?

The following is a perspective by postal commentator Gene Del Polito for Direct magazine.

When Congress passed the Postal Civil Service Retirement Funding Reform Act of 2003, mailers finally got a long-needed break. Passage of the CSRS reform measure meant that Postmaster General Jack Potter would be able to make good on his promise to keep postal rates unchanged until at least 2006. Now before we go any further, let's make absolutely sure we understand that this "break" was not solely manna from legislative heaven. This break was just recompense to mailers for having been required to pay the many unnecessary postal rate increases that have made the cost of doing business by mail more expensive than necessary.

For sure, this unprecedented period of postal rate stability couldn't have come at a better time. While the Fed continues to claim that the economy has begun a slow recovery, there really hasn't been much to convince most direct mail marketers that this is, in fact, the case. Indeed, if something more doesn't happen soon, this respite from postal rate hikes may quickly expire, and we'll all be stuck with the "same ole, same ole" once again.

As things stand now, we should expect the Postal Service to file its next case for a postal rate increase sometime in late calendar 2004 or early calendar 2005. Why? Because it will take about 12 months to complete the litigation that's a part of every rate case, and that will bring us to the threshold of 2006. But before we go off and sell our direct marketing stocks, let's keep in mind that there is cause for hope.

First, Congress could lengthen the period of rate relief by releasing the CSRS-reform funds that will be escrowed if an additional reform measure fails to pass. Second, the quickest and surest way of turning the corner to a better postal future would be to push as hard as possible for the enactment of postal legislative reform--one that would combine the best elements of the recommendations made by the Presidential Commission on the Postal Service and the proposals that already have been laid out by several key players in Congress.

Unfortunately, simply "wishing" is not enough to make postal reform a reality. Indeed, if it is to happen at all, our industry must be willing to shoulder the burden of educating an otherwise ill-informed and disinterested Congress on the benefits of postal legislative reform.