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DMA sounds optimistic note regarding postal rate hike

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New York—The Direct Marketing Association on Tuesday sent a memo to members of its Government and Postal Affairs Committee saying the expected 2006 U.S. Postal Service rate increase "may be as low as 6%."

The memo, sent by Jerry Cerasale, the DMA’s senior VP-government affairs, said the USPS’ finances are in better shape than expected.

"By the end of December, the USPS was $700 million above plan in net income. The greatest generator of that was a 14% increase in standard mail volume," Cerasale wrote. The USPS may have a $1 billion surplus as a result of the revenue boost, he said.

Cerasale said the USPS in March might request a 6% across-the-board rate increase with implementation on Jan 1, 2006. This would be an expedited rate case, and USPS would be looking for a settlement from mailers, he said.

In an interview with BtoB, Lou Mastria, DMA VP-communications, stressed that this was only one possible scenario. "We’re still not in a place where that’s a fact," he said, "This is still very fluid. We’re not sure exactly where it’s going to wind up."

—Carol Krol

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