Here's how DMI, one of the largest list broker/management companies, predicts the impact of next year's postage increase.

Dear Colleague,

There may be good news ahead on postage rates. Jerry Cerasale of DMA sent the following on Tuesday, January 25th, indicating that the 2006 increase may be as low as 6%:

The USPS financial picture is far better than expected. By the end of December, USPS was $700 million above plan in net income. The greatest generator of that was a 14% increase in standard mail volume. 1st Class volume was above a year ago in Oct and Nov but below same period last year (SPLY) in December. In Oct and Nov there was a significant increase in 1st class advertising mail volume.

This improved picture—possibly a $1 billion surplus—has USPS considering what action to take vis-a-vis its next rate request. As you know, USPS must collect and fund the CSRS escrow in 2006. This amounts to a little over $3 billion per year. USPS could be fiscally sound with a rate request for new rates in calendar 2006 that asks for only the CSRS escrow.

That scenerio would be as follows:

A request filed in March, 2005 for a 6% across-the-board rate increase (i.e., all rates up 6%) with implementation on Jan 1, 2006. This would be an expedited rate case—USPS would be looking for a settlement from mailers. In April, 2006, USPS would file a "normal" rate case, hopefully asking for an average 5% increase. All this would be accomplished WITHOUT any CSRS fix. If we could lobby for a reduction in the CSRS, the 6% could be changed, the date of either rate case could be changed—it is fluid.

I do not know the effect this will have on the push for postal reform and our push for the CSRS fix. I do know, however, that the Administration may not use the CSRS escrow funds as long as it is in escrow—it remains an asset of USPS. Thus, the Bush Administration will likely push further for reform and release of the escrow funds.

We'll keep you posted as information comes through.

Cordially,

Larry May
Chief Executive Officer

Posted by Rebecca Sterner at 6:07 PM | Link   

 
If you have California customers, and if your company has more than 20 employees, you need to be aware of a new privacy law in California. See the Direct Marketing Association's take on this law, (SB 27).

There you will see two ways that you can comply with the law's requirements. The spirit of the law seems to be that any California resident should be able to keep you from sharing their name and other personal information if they request that (no problem for most companies to comply with that!).

The more unusual aspect of the law, though, is that companies must provide (if requested) a list of all the companies with whom you shared a customer's name. So if the hypothetical John Doe from California writes to you and requests a list of who you rented his name to, you must give him a list of all the mailers and their addresses, along with the kind of information you shared (name, address, financial information, phone number, etc.).

If your mailing list is part of any kind of database program, where additional information is appended, or if your list is one of many in a shared database program, this information seems to be very difficult to get. Some list owners are simply withdrawing their California names from databases where more than one company participates.

Other list owners are telling me that if they get any requests from a California customer, rather than go through the onerous task of figuring out exactly which mailers mailed a given name, they are going to provide the full list of mailers in a given year. I think this will scare the bejeebers out of the average customer.

I'd be interested in hearing from people on how they are going to comply with the California law and will share what I learn in a future blog posting. Please contact me.

Posted by Rebecca Sterner at 6:01 PM | Link