Postal Alert: Magazines and Catalogs
New Postal Rates Announced, but it’s not Over Yet!
March 20, 2007—As everyone with an interest in distributing print by mail knows by now, new increased postal rates will take effect on May 14th, except for periodicals (i.e., magazines, newspapers and some newsletters) which have been delayed until July 15th.
The impact of the increased postal costs is likely to result in a decline in print volume—how big a decline will vary by mail category or class and the mailer’s ability to achieve the maximum postal discounts available under revised work-sharing rules.
Magazine Increase Delayed, but Not Forgotten
The USPS Board of Governors delayed instituting the new periodical rate until mid-July to allow publishers, printers and their software providers adequate time to update computer software and to cope with the complexity of a new complicated periodical rate structure.
The Postal Service had prepared in its May 6, 2006, rate increase request to the Postal Regulatory Commission (PRC) a single container charge designed to encourage magazine mailing efficiency. However, the PRC came back after almost a year of deliberation, with 55 different prices based on container type, point of entry and level of sortation. It is this more complicated structure that the USPS plans to implement in July. Many analysts feel that this structure favors the large publisher and printer but works to the detriment of the small publisher and the lower volume sheetfed commercial printer that prints a few magazines. It will take time and a postal expert to figure it all out. Best action for the small printer is to rely on postal software suppliers and experienced postal- smart consultants.
Catalog Postage Goes Up, Up and Up in May
Catalog merchandisers and their printers also face major postal increases—for some a going-out-of-business-inspiring rate hike of 40% on May 14th—if the current PRC recommendation sticks (technically an increase in the “standard mail” category. Concerned about this “rate shock”, the postal governors have sent this one back to the PRC for a second consideration. For now, catalog printers must prepare for the worst—there is a little more than a month to do it—and pray for the best.