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Heading for the exigency exits

Oct 1, 2010 12:00 AM

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Do you know what an exigency is? Until recently, I thought this was what happened when you drank too much coffee while you were driving and couldn't locate an off ramp. In such circumstances, an exigency would be inevitable.

A lawyer might say that an exigency is an “emergency.” Opponents to the latest USPS rate proposal might describe an exigency as a “loophole,” a means of circumventing postal reform legislation which restricted rate increases tied to the Consumer Price Index's rate of inflation.

Printers know that an exigency is a world of hurt. The proposed rates, slated to take effect January 2, 2010, call for a five to six percent hike on average across most mail classes with even greater increases for periodicals and package services. One national magazine estimated its postage rates could increase by as much as 10 percent.

‘We must all hang together’

While postal increases are something of an occupational hazard for mailers, the exigency clause has united what the Washington Post calls “an unusual bunch of foes.” The Affordable Mail Alliance was formed this past July following the USPS' announcement it intended to raise rates.

Previously trade groups and publishers were the leading players in any postal protest. “The [Alliance's] membership roster includes the usual heavyweights of direct mail, from the American Forest & Paper Assn. to the Major Mailers Assn. to the Conde Nast magazine empire,” noted the Post. “But it also includes the Prairie Pioneer of Pollock, SD, the Big Buck Saver in Wisconsin and scores of other small community publications.”

As we go to press, the Postal Regulatory Commission (PRC) is expected to act on the USPS rate increase in the next week. The 1,000-member Affordable Mail Alliance has published ads, issued a flurry of press releases and called for mailers to lodge protests with the PRC.

The Affordable Mail Alliance contends that emergency provisions included in the 2006 postal reform legislation do not apply to the USPS' current situation. The Alliance says the USPS “should seek to take more substantial steps within its own organization before raising prices for millions of consumers.”

The group released a statement from Sen. Susan Collins (R-ME), co-author of the 2006 Postal Accountability and Enhancement Act (PAEA). “I have repeatedly expressed my concerns to the Postal Service that reducing service and increasing rates are not the means to raise mail volume and restore fiscal balance,” says Collins. “As the author of the PAEA, I can unequivocally state that the law does not provide for an exigent rate case based merely on poor economic circumstances or on increased utilization of electronic or other alternatives to traditional mail. Neither of these circumstances is exceptional nor extraordinary as required by law.”

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Back in July, the USPS cited “a sudden, precipitous drop in mail volume” as well as “the depth and severity of the current recession” to justify its rate increase request. All I can say is thank goodness the printing world has been completely immune to such challenges. Printers across the nation are suffering from sleep deprivation because their mattresses are so lumpy with the loot from their booming operations. Of course this is only in the Bizarro Commercial Printing Industry where there's no commodity pricing, no electronic alternatives and no shortage of customers.

What printer doesn't secretly envy the USPS? Imagine your company was on track to lose $3.8 billion in 2010 and $7 billion in 2011 and that 26,000 of your 32,000 offices lost money. A printer would be ducking his creditors and calling an auction house. The USPS is raising prices.

Some pundits say the problem is neither the USPS nor the PRC but Congress. “The real problems with the Postal Service are actually concentrated on Capitol Hill,” declared the editor of Michigan's Lansing State Journal. “Congress, after all, tells the service to provide six days of mail delivery … it requires the service to pre-fund the $5.4 billion needed for its retired worker health benefits, rather than coming up with it on a pay-as-you-go basis as other federal agencies do.”

The final word

One thing is clear. Simply increasing rates won't resolve this mess. The printing industry is reeling from the same problems as the USPS. But lack of planning on the postal service's part isn't an exigency on our part.

As noted in the tribute on pg. 12, Dick Gorelick passed away last month. He excelled at explaining (and generally lambasting) the machinations of the USPS. I miss him already.

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