Postal “Storm” Ahead For Catalogers?
A recent e-mail blast from the American Catalog Mailers Association warns catalogers of a potential “postal storm” due to an expected exigent rate case filing by the U.S. Postal Service next month.
Paul Miller, the ACMA’s vice president and deputy director, says in the e-mail that rate increases for catalogers could be around 5%, effective in January 2011. But, according to the e-mail, “some are calling for catalog rates to increase by as much as 10%.”
Ouch!
Given the postal hit catalogers have incurred – postal rates for catalogers jumped 58% from 1997 to 2008 while inflation rose 34%, according to Miller – another 5%-10% increase could prove devastating for many. Recent experience, Miller says, “demonstrates that raising catalog rates is counter-productive. Another increase of even as little as 5% could further depress catalog circulation.”
The ACMA plans to fight an exigent increase – “There is much that must happen before this 5% (or greater) increase becomes reality,” Miller says. “Catalogs are already well ahead of inflation; when first publicly mentioned by the Postmaster General on March 2, exigency was justified as an inflation catch-up. We hope rational decisions will prevail. We’ll keep you advised as this plays out over the summer so you still have time to adjust your budgets to react in time for next year. But we need every company’s help to fight this onslaught right now.”
When it comes to rate-setting, Miller says, “policy-makers are missing the bigger picture from a marketing standpoint. Instead, they’re only interested in how much each individual catalog in the mail covers its costs. We feel this is crazy logic. Most businesses have products that vary in profitability. The key is to understand the total profitability of a customer segment. And when viewed from this standpoint, catalogs are clearly profitable.”
These points were covered by ACMA president/executive director Hamilton Davison’s testimony before a House of Representatives subcommittee.
The ACMA has made significant inroads with postal officials since the group formed in 2007. Let’s see if that relationship has any effect on what sort of rate increase catalogers receive.
