USPS Files Exigency Postage Increase - Time for Industry To Respond! Industry Alert: USPS Governors Announce Intent To File for Exigency Rate Increase Beyond CPI Cap Industry Alert: USPS Governors Announce Intent To File for Exigency Rate Increase Beyond CPI Cap   Dear Member & Non-Member: The US Postal Service Board of Governors today announced an across-the-board exigency postage increase that will be submitted to the Postal Regulatory Commission tomorrow. The average increase is to be 5.9%, but various mailers will see slight variations in the amount imposed. The 5.9% incorporates an annual CPI-U increase of 1.6% plus an additional exigent increase of 4.3% over the rate of inflation. We have yet to see the specific filing, but are told to expect Standard Flats will be subjected to an overall 6.1% increase. ACMA has been deeply involved in this for months and has worked diligently (along with other mailing industry groups) to get the Postal Service to hold off filing an exigency case so mailers could focus on postal reform. Mailers will have no choice but to now focus on beating back this serious threat, resources and effort better directed at legislative reform. We made several direct appeals to the Postmaster General and the Governors themselves. The Governors said they had to move exigency forward as a hedge against Congress doing nothing. An exigency case is a full-blown contentious matter, much more like the rate litigation of old than the post-2006 style "rate adjustments." The Governors have indicated they will prosecute this case aggressively. If approved by the PRC, the Governors could elect to delay the implementation of the exigent portion should postal reform legislation be proceeding in Congress but that is little comfort right now. Also note that if the PRC rejects the case, the 1.6% inflation-limited cap rate will be applied alone as a rate increase in January 2014. Some Possible Outcomes In the run up to this announcement, there was some discussion that an exigency increase would include a surcharge on underwater mail products such as Standard Flats. Some told us to expect a 10%-12% increase on catalogs. While we are disappointed with today's announcement, the increase is about half what might have occurred had ACMA’s and other mailing industry groups not stridently advocated about the dangers any exigent increase would pose for mail volumes. That said, in an exigency case, the PRC can make adjustments to the actual amount levied for each mailer in part or in whole. Sadly, some mailers may advocate that the PRC apply the increase differentially, hitting some groups much harder than others. We hope this situation does not devolve into the "class warfare" between different mailing interest that characterized rate battles prior to 2007. The PRC has 90 days to issue a ruling on the request. It will open a docket so interested parties can file comments. Rate increases would be effective January 27, 2014. As above, the PRC can approve (or not) the exigency request and the USPS could then elect to hold off on the effective date, knowing the increase is "in its pocket" while reform progresses in Congress. So mailers must continue to work for successful legislation before the end of this year. Industry Action An increase of nearly 6% will do real damage to an industry still struggling to adjust to the exorbitant 2007 rate hike where many companies are struggling mightily, mail volumes are depressed, and the availability of quality names to mail is diminished. Clearly catalogers need to shift to a war footing and push back hard legally, as well as in the court of public opinion (public relations) and on Capitol Hill (government relations). ACMA will continue to use all means at our disposal to hold any annual increase to the CPI cap. To do otherwise is an abandonment of a hard-won gain in the Postal Accountability and Enhancement Act (PAEA) of 2006. To fight vigorously requires resources. While we have a modest balance in our Exigency Fund, ACMA needs increased financial support to pursue all means to defeat this. In no small part, the tactics we will be able to consider will depend on the resources we have at hand. If you have not already done so, please make a donation to our Postal Action Fund today. All contributions to this Fund will be used only to pay for out of pocket costs relating to our postal advocacy work. If you would like more specifics on our options and costs, or the possible strategy and tactics, please contact Paul Miller or me. More Information • Click here for the official USPS announcement • Click here for a detailed letter from the USPS Board of Governors, Mickey Barnett • Click here for House Committee on Oversight & Reform Chairman Darrell Issa's reaction to the announcement • Click here for Senate Committee on Homeland Security & Government Affairs Chairman Tom Carper's reaction to the announcement More information to follow as it becomes available. Sincerely, Hamilton Davison President & Executive Director American Catalog Mailers Association www.catalogmailers.org hdavison@catalogmailers.org About ACMA ACMA is a Washington-based not-for-profit organization specifically created to advocate for the unique collective interests of catalog mailers in regulatory, public and administrative matters where the shared impact transcends individual company interests. The only catalog owned and controlled trade group focused solely on the business interests of catalogers and their supply chain, ACMA participates in rule-making and other proceedings of significance where a single collective voice increases influence and effectiveness. Membership is open to any party with direct interests in the catalog industry. More information can be found at www.catalogmailers.org.http://www.catalogmailers.org. Published: 09/26/13

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