BATTLING AD MAIL MONOPOLY COALITION SEEKS OPENING TO COMPETE FOR THIRD-CLASS DELIVERY

By Published on .

A coalition of advertising mailers and alternate delivery companies wants the U.S. Postal Service to open its $9.8 billion third-class ad mail monopoly to competition.

The Coalition for the Relaxation of the Private Express Statutes on Jan. 6 petitioned Postmaster General Marvin Run-yon to begin an administrative rulemaking to suspend the postal service's monopoly over bulk third-class ad mail.

Currently, the $500 million alternate delivery industry may deliver only address-specific mail of 24 pages or more, like magazines and catalogs, and ride-along material, or non-address-specific saturation mailings.

Previously, the postal service promptly dismissed suggestions that it open the category to competition, saying such a move would force rates higher and jeopardize universal door-to-door delivery.

But it may be more receptive to the idea now that the Republican-controlled Congress is considering more drastic measures-like privatizing the nation's mail delivery. The recent rate increase and headlines about poor delivery in major metropolitan markets hurt the postal service's case.

The postal service hasn't yet responded to the petition. But Deputy Postmaster General Michael Coughlin said in a recent TV interview, "The postal service is operating with a 25-year-old statutory model .*.*. It was fine in 1970, but I'm not sure at all if it fits in the more competitive environment we operate in the 1990s. It may be time to take a look at it."

Phil Miller, president-CEO of Grand Rapids, Mich.-based Alternate Postal Delivery, is leading the effort.

"If the postal service does nothing, then it invites everyone to go outside the postal service to the Hill or the courts," Mr. Miller said.

Advertising mailers are tired of being hit with rate increases higher than other classes of mail, said Gene Del Polito, executive director of the Advertising Mail Marketing Association, which also supports the request. On Jan. 1, advertising mail rates jumped 14% while first-class letter rates rose 10.3%.

Advertising mailers hope more competition in third-class mail delivery will give them better rates and service.

"Historically, the postal service has looked to the telecommunications model of regulation as justification for the retention of its letter mail monopoly," Mr. Del Polito said. "If there is no longer a justified monopoly for long-distance or local calls, how can there be one for third-class mail?"

Growth in the alternate delivery industry has been flat in recent years, but the postal rate increase could change that.

"We need more volume," said Mike Trost, president of Marietta, Ga.-based Publishers Express, which is also part of the consortium. "Some of our licensees are profitable and some are not."

In this article:
Most Popular