Dear DMA Member,

Your Business is Being Threatened.

On Monday, the United States Postal Service (USPS) told the Postal Regulatory Commission (PRC) that it will pursue its request for exigent – above inflation – postage increases. These increases would be above and beyond the already scheduled 2.1 percent increase set to take effect on January 22, 2012.

DMA believes that the future of the US Mail depends upon forward thinking. Rather than digging up the past, USPS should be looking forward and right-sizing its network, transportation, and employee complement. DMA immediately urged the PRC to reject the USPS’ plan, which relies upon old data and failed logic to support driving postage higher. This is not the time to drive more mail from the system.

On your behalf, DMA has already fought – and won – this battle once in 2010. Now we’re gearing up to win it for you once again. DMA successfully opposed the previous exigent case on the grounds that the circumstances didn’t warrant an exigent rate hike and that such a hike would in fact drive more mail out of the system at a time when USPS should be removing excess capacity.

Every step of the way, DMA has kept its members up to speed on the fast-moving postal debate. Our very own Direct from Washington e-newsletter delivers comprehensive information weekly. You have also had the opportunity to speak directly with postal policymakers through our “Postal Perspectives” Webinar Series, which focuses on the tough decisions and significant changes that must be made to improve the fiscal health of the USPS. These informal conversations with the policymakers at the center of the postal debate give you the opportunity to hear exactly what the experts are thinking about the future of USPS.

In addition to fighting rate increases at the PRC, DMA has been working hard to make sure that postal legislation in Congress safeguards the interests of all DMA members. We continue to work closely with key policymakers – on both sides of Capitol Hill, and both sides of the political aisle – and our efforts are really paying off.

• Just yesterday afternoon, the Senate Homeland Security and Government Reform Committee voted to send the “21st Century Postal Service Act” to the Senate floor. When this bipartisan bill was introduced last week, it failed to properly protect catalog products from steep and immediate postage increases. DMA worked with key leaders in the Senate to create a provision that safeguards catalogs appropriately before the bill was passed out of the Committee.
• DMA was also successful in fighting two proposed amendments that would have required USPS to create a national “Do Not Mail” program. Because of our efforts, these amendments were not even considered by the Committee.
• We are also fighting to defend the lifeblood of nonprofit mailers. DMA was able to keep a harmful provision that would have slashed the nonprofit rate preference from being introduced in the Senate. We are also fighting hard to have a similar provision removed from legislation being considered in the House.

We are not resting on our laurels. Instead, we will take to Capitol Hill next week for a special DMA Postal Hill Day on November 17 in Washington, DC. A host of DMA catalogers and DMANF nonprofit mailers will join DMA’s Government Affairs team in meetings with senior Congressional staff leading the way on postal reform in Congress.

We encourage you to join the hundreds of DMA members that have already taken “DMAAction” to support our efforts in Washington. Visit our DMAAction website today to learn how you can tell Congress to safeguard the interests of the mailing community!

Sincerely,

Linda Woolley

EVP, Washington Operations

Direct Marketing Association

The Postal Service (USPS) is in dire financial straits. It is imperative that the US Mail — a vital communications channel for the American public, the American economy, and DMA members — be placed on a solid financial footing and remain affordable to the American public and American businesses. The $1.1 trillion mailing industry and its over 8 million employees depend on it.

It is time for Congress to set aside differences and work on a bipartisan bill that can be signed by the President. Senators Lieberman, Collins, Carper, and Brown have taken a huge step in that direction.

This bipartisan bill tackles the difficult issues of USPS retiree health benefit prefunding, five-day delivery, door delivery, labor arbitration, and USPS down-sizing. We are pleased that the bill maintains nonprofit rate preferences and requires a study of underwater classes and products to determine how their costs are affected by USPS excess capacity.

DMA pledges to work closely with the Senate and the House of Representatives to bring to fruition a bipartisan bill that will ensure that USPS will remain a viable and affordable communications channel for the 21st Century.

via DMA Applauds Introduction of ‘The 21st Century Postal Service Act of 2011′.

The only way to ensure that the Mail remains a viable marketing channel is for Congress to remove USPS’ shackles and let it operate as a real business. The Postmaster General has lots of ideas about how to put USPS on the right track while keeping the Mail affordable for your business. All he needs is the authority to make those changes.

The Postmaster General’s “ideas” include ignoring the no-layoff clause he agreed to just a few months ago, and eliminating federal health and pension benefits for postal workers.

Ironically, the DMA claims to be concerned about jobs, saying “This is not the time to lose American jobs.”

That concern apparently doesn’t extend to the jobs of postal workers.

Update: The DMA’s Jerry Cerasale posted the following comment in response to our story:

For full disclosure, I am a Senior Vice President at DMA. The article makes an incorrect conclusion. DMA did not call for the abrogation of union contracts. The DMA call to action says to “remove USPS’ shackles and let it operate as a real business. I don’t recall that real businesses can “throw out union contracts.”

With all due respect, I would point out that the letter the DMA asked its members to send to Congress says

The Postmaster General (PMG) has asked for authority to help him avoid insolvency for the USPS. He needs the tools that private sector CEOs have to control pension and health care costs their employees and retirees, and to eliminate excess capacity in mail processing plants, retail outlets and employee complement.

Congress should grant the PMG’s request. It is vital that the USPS eliminate its excess capacity because its customers – including my company – cannot afford to continue paying for that excess capacity in light of shrinking mail volume.

The PMG’s request was very specific: “Allow the Postal Service to establish its own health benefits program, Allow the Postal Service to administer its own retirement system, Give the Postal Service the ability to adjust the size of its workforce to match operational needs and the changing marketplace.”

All of those items are covered by provisions in the contracts the USPS has with its unions, including the APWU contract that is just a few months old. The PMG isn’t asking the unions to renogotiate the contracts- he’s asking Congress to throw them out. How can you say “Congress should grant the PMG’s request”, and then turn around and say you’re not calling for the abrogation of union contracts?

via DMA Urges Members to Take Action to Keep Mail Viable.

The Direct Marketing Association (http://www.the-dma.org/) (DMA) applauds Postmaster General Patrick R. Donahoe for proposing new cost-cutting ideas for the US Postal Service (USPS) for Congress and the postal community to examine. To return to financial stability, the Postal Service has stated that it is seeking legislative changes to allow for network and workforce adjustments.

The Postal Service faces imminent insolvency due to declining mail volume. Insolvency of the USPS will harm the $1 trillion "mail" segment of our nation’s economy and the millions of jobs it supports. Mailers can no longer fund the excess capacity in the USPS network and its corresponding employee complement through postage. USPS must right-size its network to match the new reality of lower mail volume.

"Every effort to bring the postal service back from the brink of insolvency must be examined," said Jerry Cerasale, DMA’s senior vice president of government affairs. "We applaud the Postmaster General for expanding that dialogue."

On Wednesday the Postal Regulatory Commission found that the Postal Service postage increases for market dominant classes of mail were correctly calculated within the statutory CPI price cap. Thus, those rate increases will be effective on Sunday, April 17, 2011.

The Commission, however, expressed disappointment that USPS had failed to rate postage on Standard Mail flats sufficiently to cover the costs of processing, transporting and delivering that mail. In fact, the Commission found that the new rates would increase the cross-subsidy of flat-shaped mail by Standard Mail letters. “While not unlimited, [the USPS pricing] flexibility is sufficient to allow the Postal Service to address the flats’ cost coverage issue within the rate cap. In this proceeding the Postal Service could have designed Standard Mail Flats prices to better align rates with costs and, over time, allow this product to be ‘brought to full cost coverage.’” The Commission expects this error to be rectified in future rate adjustment filings.

The Commission also criticized the Postal Service use of “unaccepted” costing methodologies when determining work-share discounts. Again, the Commission did not require any adjustments in this time shortened proceeding, but it expects the Service to refrain from such actions in future filings.

“The Commission should be focusing on market based pricing and not on what should be the abandoned cost of service pricing of the old law. The Postal Service rates for Standard Flats are market driven and those efforts should be applauded,” said DMA Senior VP Jerry Cerasale.

The Commission’s concern on both the methodology and the Standard Mail cross subsidy may also be addressed in the Commission’s Annual Compliance Review or a complaint case.

The Commission decision may be found at:
http://www.prc.gov/Docs/71/71974/Order_No_675.pdf

The Direct Marketing Association (DMA) today praised the decision of the Postal Regulatory Commission (PRC) to reject an excessive postal rate hike proposed by the US Postal Service (USPS). DMA led efforts on behalf of its members encouraging the PRC to reject the USPS request for an unlawful and exorbitant rate increase.

The requested rate hike would have increased postal rates by nearly ten times the rate of inflation, requiring customers to pay an additional $3 billion annually for postage, despite the current rate of inflation remaining close to zero. The PRC decision requires the USPS to continue following the current law which limits any postage increase to the rate of inflation.

“Today’s decision is a great victory for businesses and consumers. The US Mail will remain a viable and affordable communications channel. The knowledge that postage rates will not rise faster than inflation is also an important element for the business community already operating in an extremely challenging business environment,” said Lawrence M. Kimmel, DMA’s CEO. “This, however, is only a first step. USPS customers must continue to work together, and with Congress, to help the Postal Service maintain competitiveness in the marketplace.”

USPS must now make critical decisions to cut costs and right-size its network and workforce. As it conducts negotiations with many of its employees, the USPS must not lose sight of the fact that its financial well-being, and that of its customers, depend on immediate and significant cost reductions.

“DMA will work closely with Congress to correct the over-funding of postal pensions so that companies are not taxed to subsidize other government programs,” concluded Kimmel. “We are fighting for reforms that will ensure a viable postal system able to meet the needs of consumers and the business community for generations to come.”

A seasoned marketing executive, Mr. Allen is a veteran of The Vermont Country Store, where he began in 1982 as assistant to the president. He advanced to president in 1994, earning the distinction of the first non-family president of the business. Mr. Allen has extensive experience with a diverse marketing background, currently serving as a director for six for-profit companies in New England: Gardeners Supply; Cuddledown; Susan Sargent Designs; JK Adams; Danforth Pewterers; and Kalow Technologies. Mr. Allen received a lifetime achievement award in 2004 from Catalog Success magazine and another in 2008 from the New England Mail Order Association. He is a graduate of the University of Rhode Island.

“Bob Allen’s in-depth knowledge of direct marketing and his multi-year experience leading a trade organization make him the natural choice to lead DMA during this time,” said Eugene R. Raitt, DMA Board Chairman. “He has successfully navigated businesses through revolutionary changes in direct marketing and will keep DMA advancing into the 21st Century. He is exactly the kind of forward-thinking leader we need.”

“I am honored to serve DMA while the board conducts a thorough search for a permanent President & CEO,” said Mr. Allen. “Direct marketing is in the middle of a period of rapid change. It will be important to maintain a balance between tried and true methods and new concepts like social media and the digital landscape; as I did when guiding The Vermont Country Store in its evolution from strictly ‘traditional’ media to digital. Successful companies will be the ones who understand and embrace both. I look forward to guiding DMA through this process.”

Marketers now face prison if they consistently ignore the wishes of consumers who do not wish to be contacted for marketing purposes.

The CPUT Regulations include 31 banned practices that will always be considered to be unfair. One of these is ‘making persistent and unwanted solicitations by telephone, fax, email or other remote media except in circumstances and to the extent justified to enforce a contractual obligation’. Breaching this banned practice is a criminal offence and carries with it a maximum fine of £5000 currently and or a term of imprisonment not exceeding two years.

The term ‘other remote media’ has yet to be defined, but there is the argument that this could include direct mail sent through the post. If this is so, the Mailing Preference Service will have legislative backing providing greater protection for its subscribers.

Janine Paterson, Legal and Public Affairs Advisor at the DMA, warns: “Companies ignoring the TPS and persistently calling numbers registered on the scheme have got away lightly. Now however they could face prison if they continually call numbers against the consumer’s wishes. The DMA welcomes this new legislation and is advising members on this and other elements of CPUT Regulations and the Business Protection from Misleading Marketing Regulations. ”

Companies ignoring TPS face prison warns DMA

Interestingly enough, the term “junk mail” doesn’t appear on the dmachoice site itself, although it is included in the keyword code for several pages. Keywords are embedded in the HTML code of web pages, and can be used by search engines, but aren’t visible to a person viewing the page.

According to the Postal Service, Cost Reduction Programs enable it to save 9,951.1 clerk and mailhandler workyears in FY 2006 through what the Postal Service labels as Section 1A programs. Cost reduction programs also enable it save 8,955.9 clerk and mailhandler workyears in these programs in FY 2007, and 5,106.4 clerk and mailhandler workyears in the Test Year. However, the Postal Service claims that these truly impressive savings in craft labor will not enable it to save even a single supervisor workhour in any of these three years.