USPS promises no rate increases in 2010

On October 15, Postmaster General Jack Potter issued a letter reassuring postal customers there would be no price increases in 2010 for dominant mail products.  These include First-Class Mail, Standard Mail and periodicals. For the average individual, this might sound like a mundane announcement, but for direct marketers and mailers across the county this has positive implications for the upcoming calendar year.

First, it will be easier to plan marketing budgets.  Potter stated: “as we begin the fiscal year and as many of you, our business clients, are preparing your 2010 operating budgets, we want to end all speculation.  The Postal Service will not increase prices for market dominant products in calendar year 2010.”

Companies that participate in direct mail now have a static number to calculate their postage expenses for all marketing activities.  This will also allow them to allocate any funds set aside for postage rate increases to other marketing activities which can drive sales in 2010.

Next, at minimum it should sustain current mail volumes, if not increase them for 2010.  According to Potter, “While increasing prices might have generated revenue for the Postal Service in the short term, the long term effect could drive additional mail out of the system.”  By not increasing prices, Potter shows he understands the current economic climate could drive people away from direct marketing based on cost.  Holding steady allows companies to continue the same flow into the mailing system, or even increase their units.

Third, it is an important forward looking statement from the USPS.  Historically, the perception is that the Postal Services has been run like a government bureaucracy.  With the recent summer sale, and now locking in 2010 prices in time for direct marketers to plan a 2010 budget, Potter is acting like a corporate executive and aligning the attitude of the USPS more with the mindset of businesses that use its services.

Finally, it is a bold move to support the direct mail industry by the USPS.  By locking in rates during a time of deflation in an attempt to keep revenue steady while looking at other cost cutting moves, the postal service is positioning itself to help direct marketers stabilize their businesses.

In essence, these moves not only help the United States Postal Service, but the move to retain the current volume of mail and revenue should encourage companies to continue their direct marketing campaigns, and potentially increase direct mail activities.

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