Postal officials last week said the service will finish its fiscal year Sept. 30 about $1.65 billion in the red, with the certainty of more red ink next year. In addition to a slow economy, higher labor costs will come once new contracts are reached with 700,000 unionized postal workers.
To regain financial stability, Postal Service management said it needs rate increases that average 9% across all mail classes (10% for periodicals and 7.3% for advertising mail). If approved by the Postal Rate Commission, the higher rates would probably go into effect in about a year. While postal officials reminded publishers and mailers the requested hike was less than the 15% boost they feared, that is scant comfort. Postal officials have laid out plans for reorganizations, layoffs and continued capital spending freezes. While these may attempt to address mailer demands to see the post office get tougher on costs, they are not the answer to the larger issues that haunt the future of the Postal Service. That will require a thoughtful examination before Congress of the rules the post office now operates under, and a determination to make changes. Advertisers need to be part of that examination and discussion, and they must act to move it to the top of the business agenda in Washington.