On the Road to Postal Reform

Long-awaited postal reform finally seems a reality, as Congress passed postal reform bill H.R. 6407 — a compromise bill that grew from H.R. 22 — overnight on Dec. 9. The bill awaits President Bush’s signature for final approval.

So what will be gained for mailers if the bill is approved?

Maynard Benjamin, president and CEO of Alexandria, Va.-based Envelope Manufacturers Association, says that at its most basic, what will come is a different way of setting postal rates, a different way of regulating the mail and a different way of operating the U.S. Postal Service in the future.

“We have a mail system that’s changing. Mail today is a competitive communications technology with the Internet and, therefore, if you raise its prices too high, higher than the cost of inflation, you would tend to lose mail volume. And if you keep the cost at or near or slightly below inflation, the theory is that you would retain volume,” Benjamin says.

Aside from postal rates, other issues in the bill that are important to mailers are the maintenance of service standards and below-the-line costs such as the payment of military retirement benefits and health-care costs.

But while postal reform is about controlling costs, it’s also about structuring the USPS for the future. Mail is more targeted, tailored and timely today than ever before, Benjamin says. The nonprofit message is unique and very effective in the mail -- more so than the Internet and other fundraising mediums -- due in part to the way it physically connects with people.

But there’s a cost/benefit balance that needs to be met. If postal rates continue to rise, the mathematics of that formula changes.

“It makes fundraisers more willing to try other media to see if they work and, right now, they certainly are looking at the Internet,” Benjamin says.

According to Benjamin, if the postal-reform bill passes, rates will not increase greater than inflation in any one year. So, aside from exigency clauses — for example, if the price of oil goes up, postal rates may fluctuate because of the increase in energy costs to the USPS — that allow leeway there, there would be a cap on rates. This keeps rate raises predictable so mailers can plan and budget for them.

“It beats the current system where it’s sort of by guess and by golly,” Benjamin says, adding that he hopes postal reform gives incentive to the USPS to keep costs low, incentive to mailers to mail more efficiently and incentive to the public to want to continue using the mail.

“If it does all those things, then we’ve got a pretty good system. We’ve got a system that ties us together,” he says. “I haven’t found that the Internet can send you a blouse or a shirt or anything else right now through the wire. It’s all got to come back in a physical package. So you need a system of delivery in this country.”

Maynard Benjamin can be reached via www.envelope.org