NEXT POSTAL RATE INCREASE COULD BE DELAYED

Postmaster General Tells DMA Price Hike Could Come Late 2004

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WASHINGTON (AdAge.com) -- The postmaster general of the U.S. today indicated that the next planned postal rate increase could come later than expected.

John E. Potter, speaking to the Direct Marketing Association conference in San Francisco, said he didn't expect a rate hike "until well into 2004," a timetable that could have a rate increase taking effect in July of that year and well into the Postal Service's fiscal year.

Mr. Potter originally

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suggested that there would be no rate increase until 2004. Under federal laws, the Postal Service generally files for a rate hike 10 months before it would take effect.

Phased-in increase
The postmaster general today reiterated his hope to file a rate hike that includes phased-in increases that would allow marketers to know their costs well in advance, and the Postal Service to avoid the need for repeated hearings on rate increases.

"Perhaps phased rates is a notion whose time has come," he said, suggesting that the increases could be smaller and spaced out over set time periods.

The Postal Service has been experimenting with negotiating two service agreements, one aimed at smaller-sized magazines and another at Capital One Services, a major credit card direct marketer -- trading discounts for actions that save the Postal Service money. He said the Postal Service is also willing to test an agreement involving first-class mail.

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