Modifying a structure proposed by Time Warner Inc., rather than wholly accepting USPS suggestions, the Postal Rate Commission (PRC) recommended that periodical rates be applied to pieces and pounds — the existing method — as well as to bundles, stacks and pallets. However, because piece rates vary on machineability, and container rates depend on the point of entry into the mail system, the result is a complex rate structure with at least 55 elements.
In general, demand for periodicals is influenced by income and the rate of employ-ment, the price consumers pay for periodicals, and the availability of substitutes on the Internet. General magazine readership has been on the decline for a number of years. (For a more in-depth discussion of periodicals and magazine printing volume, see PRIMIR’s February 2007 report, “Magazine Printing & Publishing, 2006–2011.”) Thus, mail-bound periodicals have declined steadily at a rate of 2.6% from about 2000 to 2005. According to the USPS, the proposed rates alone could reduce periodi-cals mail by about 3.5% in 2007.
Periodical printers and publishers have yet to fully assess what these rate increases and rate design changes will mean to their businesses. What is expected is that mailers will have to increase their use of co-mailing, co-palletizing and drop shipping. It’ll be tougher going for smaller and medium-size publications, which may ultimately have to turn to consolidators — or even competitors — for help.
Direct Mail and Catalogs
Direct mail and catalogs fall into the postal category of Standard Mail, which actually encompasses a wide range of printed products. Direct mail advertising accounts for about 90% of the Standard Mail volume.
Standard Mail grew at a healthy 10% rate between 1980 and 1988. Though growth has slowed considerably since then, Standard Mail volume nevertheless increased from 14.8 billion to almost 54 billion pieces between 1980 and 2005. In 2005, Standard Mail became the postal class with the largest volume, surpassing even First Class Mail.