PRC POSTAL RATE MESS: How’d This Slip Under the Radar Screen?

There’s a bit of irony as to how the mood among catalogers, printers, industry groups and the like shifted so radically from the assorted kudos to the PRC last Monday after it released its recommendations to the desperate situation mailers find themselves in right now. Word started spreading late last week during a retirement party for outgoing PRC chairman George Omas.

“We all first saw drop-ship discounts increase, which was good,” says Joe Schick, director of postal affairs for printer Quad/Graphics, who was at the reception. “But then it seemed as though every analysis we ran on catalog rates, it got worse and worse. Maybe the PRC didn’t consider the rate shock issue. Maybe because the USPS proposal was so heavily structured by shape-based rates that the PRC thought an easy way to fix things would be to get catalogers to change the size of their catalogs to letter size.”

And as Anita Pursley, vice president of printer Quebecor World Logistics Postal Affairs, points out, back in 1990, the USPS separated letters and flats in Standard Mail (Third Class at the time). “The PRC commended this move and agreed to mitigate the rate shock on flat mailers over time,” she says. “In other words, rather than have rates that truly reflected the cost differential, it was agreed these costs would be phased in over time. The PRC, realizing that this may be the last rate case under current rules, likely decided to assign full costs to flats. Going forward, under a rate cap system, rates will more accurately reflect costs.”