POSTAL RATES JUMP AGAIN

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WASHINGTON (AdAge.com) -- In an unusual move the U.S. Postal Service Board of Governors
today voted to raise magazine postage rates by 2.6% and rates commonly paid by direct marketers from 1.3% to 2%.

Those increases, effective July 1, are on top of postage hikes that took effect in January. The magazine industry, which had just seen a January rate increase of 9.9%, immediately blasted the new increase.

'Enough is enough'
"Enough is enough," said Nina Link, president-CEO of the Magazine Publishers of America. "Magazine publishers do not believe the modified rate increase announced today is justified."

Ms. Link said the Postal Service has indicated it may file for a third rate increase.

"The Postal Service needs to get its house in order before strapping the American consumer with yet another rate hike," she said.

"All businesses and all media are going through some tough challenges. This will further exacerbate them," Ms. Link said. "It will especially hurt smaller publications; the think piece publications, childrens publications will not be able to swallow the additional rates.

Post office wanted higher rates
Direct marketers will see a 1.4% increase in the standard rate on top of a 4.5% hike that went into effect in January. Rates for standard mail with enhanced carrier routing codes will rise 1.3%, rates for nonprofit standard mail go up 2.5% and nonprofit mail with routing codes increase by 2%. The Postal Service originally asked a 4.9% increase for standard mail with routing codes.

Ed Gleiman, the former chairman of the independent Postal Rate Commission who is now a consultant for the Direct Marketing Association, said he doesn't understand the move for several reasons.

"It is the wrong thing to do at the wrong time," he said. "Here you have an industry central to moving the economy ahead and then your giving it all these increases. People can pull out out of thin air. Budgets can't increase that fast. The potential is mailers will either mail less or look for cheaper alternatives to mail."

Unusual move
The move is unusual because the Postal Service Board of Governors is implementing new rates even though they haven't been approved by the Postal Rate Commission.

Normally the Postal Rate Commission holds hearings on proposed rate hikes, but the board, unhappy with the commission's decision in December to lower its proposed increases, passed today's increases by unanimous vote, which is need to overrule the commission.

In a statement, board Chairman Robert F. Rider said the increase was approved to make up for a $975 shortfall in postal revenues.

Aside for the rate increase for magazines and direct marketers, the board raised rates for postcards to 23 cents from 21 cents.

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