By  on February 10, 1994

WASHINGTON -- Anticipating some increase in postal rates, national retailers joined other large users of the U.S. mail Wednesday in urging the increase be held to 10.3 percent.

That hike is something retailers and other members of the Mailers Council said they could live with, as long as it's shared across-the-board in all categories of mail delivery, including that done for the nonprofit sector.

In calling for the 10.3 percent increase, the council is trying to head off a protracted rate case with the U.S. Postal Service Board of Governors, which is to take up the issue of raising rates next month.

The 10.3 percent increase is also one that Postmaster General Marvin Runyon has said he could support. Over a two-year period, it would provide the $5 billion he said is needed to modernize and improve service. That rate would raise a 29-cent first-class stamp to 32 cents. Any increase would go into effect sometime in 1995.

Council officials, whose members include the National Retail Federation, J.C. Penney, Sears, Roebuck and Co., Spiegel Inc., American Express Co., several publishing concerns and direct marketers, said any larger increase would just be wasted money.

"We want to give him the budget he needs," said Myron Meche, legislative representative for the National Retail Federation, who spoke at a news conference unveiling the council's rate proposal.

Meche said retailers wouldn't be able to shoulder higher rate increases, noting how stores are relying more on direct marketing as part of their advertising budgets. "Anything more than a 10.3 percent increase might cut out advertising," he said.

This is the first time such a group of heavy mail users, many of whom are often at odds over rate increases, have banded together. What makes their union so unusual is that they are asking for an across-the-board increase on all mail categories, a proposal that certainly will be fought by nonprofit organizations.

"The alternative is steeper rate increases, driving away more volume in the face of more service needs, thereby precipitating further rate increases," said council director Art Sackler. "It's a prescription for disaster, and one that could easily lead to the necessity for a federal bailout."How the proposal will fare before the nine-member Board of Governors is unclear. Some members have suggested raising prices by 13.8 percent. Any board decision must then pass the Postal Rate Commission, where interest groups jockey for position to try and adjust rates for their particular class of mail.

load comments
blog comments powered by Disqus