Postal Alert: Magazines and Catalogs
Catalog merchandisers will also be hurt by increases in package delivery charges. Courier and express delivery services increased rates earlier this year; many have variable surcharges for changes in gasoline costs.
Also sent back to the PRC for reconsideration are the rates for non-machineable surcharges and the rates for Priority Mail flat rate boxes.
The PRC decision on First Class two- and three-once letters does not differentiate between machinable and non-machinable. The Governors believe this warrants further analysis to ensure there are incentives for mailers to provide letters that can be processed at lower cost on efficient sorting equipment.
The PRC recommended a rate of $9.15 for the Priority Mail Flat Rate Box, which is $1.05 above the current rate and 35 cents higher than the Postal Service’s proposal of $8.80. The Governors believe a rate below $9 would be more appropriate for this popular consumer and business product and would be cost justified.
An analysis of the distribution of printed products by the PrintCom Consulting Group indicates that upward of 55% of all domestic commercially printed materials at sometime in their life cycle are sent through the U.S. postal system. About 45% principally magazines, catalogs, direct mail advertising and transaction documents including the emerging trans-promotional materials are deposited directly from the printer, lettershop or mailing house into the postal stream. The internet and the alternative electronic media are vying with print for a share of this market.
Although it is too soon for a full detailed analysis of the impact of the combination of so-called postal reform requirements and the rate increase, it is clear that the changes about to be instituted will result in a decline in overall commercial printing volume.
Commercial printers will be well advised to analyze their key accounts to determine the impact of the postal changes on their customers and therefore, their print volume, while developing ways to more efficiently and cost effectively enter material into the mail stream.