USPS files reclassification proposal - U.S. Postal Service; results in rate increase of second-class mail; magazine publisher affected - Brief Article

Under the reclassification proposal the U. S. Postal Service was expected to file with the independent Postal Rate Commission (PRC) on March 24, regular second-class mail rates would increase as much as 17 percent for those publishers who do not meet certain work-sharing requirements. Conversely, publishers who are able to take advantage of automation and other work-sharing strategies could be rewarded by as much as a 14 percent reduction in rates. The net effect, most analysts say, will be price breaks for larger publishers and price hikes for smaller publishers. Second-class mail would be divided into two subclasses, called publications services and regular periodicals mail. The first subclass would include the lower rates for "highly efficient" mailers. The regular periodicals subclass, for those who are "less efficient," would include the higher rates. The reclassification case, billed by the Postal Service as a "watershed change," would restructure portions of first-class, second-class and third-class mail. In fact, while first-class would retain its name, second-class would be renamed "Periodicals," and third-class would be called "Standard" mail. Each class of mail would reward mailers who automate, and penalize those who do not. The reclassification case does not change nonprofit or in-county rates, which will be addressed at a later date. According to the USPS, the Magazine Publishers of America has endorsed the proposal, as has the Direct Marketing Association and the Advertising Mail Marketing Association. The American Business Press has not endorsed the proposal. The reclassification case could be under review by the PRC for as long as 10 months to a year. The PRC will probably alter the case, and then the Board of Governors will have to approve the PRC's recommendations.

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