Page 13 - Postal Magazine Final
P. 13
AMERICAN MAIL ALLIANCE: OUR THOUGHTS
CONCERN FOR higher prices, it removes the successful turnaround or
UNINTENDED pivotal incentive to cut costs. reinvention often depends
CONSEQUENCES The industry believes that it on a particular set of
is hardly a coincidence that circumstances, but there is
e all agree that the Postal Service achieved one thing you will not find.
Wevery Postal Service larger cost savings when There is no precedent for an
product, including those constrained by a rate cap. In organization in any industry
considered underwater, addition, these higher prices that succeeded through
should “pay its fair share.” will deter the Postal Service exorbitant price increases in
But, an extra two percent and mailers from exploring the face of weak demand.
per year on top of the huge products or prices that could AMA members want the
base rate change proposed help the Postal Service gain Postal Service to succeed.
for all Market Dominant market volumes and improve
products, compounded, will its competitive position.
be devastating.
glossary
WE WANT USPS
And that devastation will TO SUCCEED CPI:
directly and severely impact Consumer Price Index. CPI is a
all mail. The underwater hanks to an irresponsibly measurement of U.S. prices for most
surcharge would apply to Taggressive prefunding household goods and services. In the PAEA
it is used to limit price increases to inflation
mail, such as magazines, schedule, the Postal Service’s
newspapers, and catalogs balance sheet is colored COST COVERAGE:
that are part of the mail in red. The Postal Service The percentage of a mail class’s reported
cost covered by its postage
moment. The last thing that faces intensifying pressure
should be done is to dampen from substitutes for its core PAEA:
an incentive for consumer market dominant products Postal Accountability and Enhancement Act.
Passed in 2006, the PAEA changed how postal
interaction with the mail. and declining demand as rates were set, requiring a price cap of CPI
Nonetheless, the rates shown by disappointing with a subsequent 10-year review of the law
proposed by the Commission letter and flat volumes. On PRC:
overall, punctuated by the the other hand, it continues Postal Regulatory Commission.
“kicker” to underwater to generate around $70 The Commission is an independent
agency with regulatory oversight over the
products, not just dampen, billion in annual revenues Postal Service since its creation by the
but outright wash away, and has an unmatched Postal Reorganization Act of 1970, with
expanded responsibilities under the Postal
that incentive. delivery network. Accountability and Enhancement Act of 2006
PRA:
The Commission proposal We are at a critical juncture. Postal Reorganization Act.
does little or nothing to The Postal Service is a Passed in 1970, the PRA gave the USPS the
challenge the Postal Service unique institution, which ability to recover all its costs through price
increases, but limited pricing freedom. PRA
to take lasting steps to makes comparisons was in effect until 2006 when PAEA passed
streamline costs. Instead, with other businesses
USPS:
by simply mandating much tricky. The key to a United States Postal Service.
www.magazine.org 11
