Newspaper Group Greets Good News-Bad News with Postage Rollback and Storm Clouds Ahead for Service

From the National Newspaper Association:

WASHINGTON—Community newspapers face the classic good news-bad news scenario in an announcement that postage prices will decline April 10.

The good news is that the First Class Mail stamp price will fall to 47 cents and mailing classes used by newspapers will decline 3 percent to 5 percent.

The bad news is that the financial relief is temporary, and the consequences could be severe to the already-worrisome service levels.

National Newspaper Association President Chip Hutcheson, publisher of The Times-Leader in Princeton, KY, testified to a Senate committee in January that NNA supported the freeze in rates contemplated by Sen. Thomas Carper’s iPOST bill, S. 2051, rather than the temporary rollback. He said a survey of NNA members indicated that more than two-thirds were concerned about harm to their businesses in declining service standards. Though postage is costly, members felt that if stable rates avoided further deterioration in service, they were willing to pay the price.

The April 10 rollback is a consequence of a long-fought battle between the mailing industries and the U.S. Postal Service that began in 2011. The Postal Service asked for an increase more than three times current cost-of-living inflation to help it stem financial losses that it claimed resulted from the Great Recession. Mailing organizations, including NNA, argued that the losses were not solely from the recession but were from Internet disruption that the Postal Service should have foreseen and addressed.

The Court of Appeals for the District of Columbia ruled that the Postal Service was allowed a price increase, but could collect the extra funds only until its coffers were replenished from the recession hits. The Postal Regulatory Commission ordered USPS to identify the day when the recession reparations were complete and then to lower postage prices. That day has now been identified. So on April 10, postage rates will go down.

“We can’t be unhappy at a rate rollback, particularly when we objected to the increase in the first place, ” Hutcheson said, “but the higher rates happened and we have adjusted. Now we think a rollback is going to lead to worse pain in the future. We think the Postal Service now goes back to bleeding red ink. We had urged Congress to act quickly to prevent this pain point. I have to say, to my great regret, that Congress has failed the mailing world by not letting USPS truly reform its costs rather than just slashing service.”

“The problem we have now,” said Max Heath, NNA Postal Committee chair, “is that newspapers have already seen a loss of more than a day in handling at mail processing plants. In the national networks, the service reduction was supposed to be from one to two days to two to three days within the SCF and at least a day longer for each zone. But the reality is that the service can take a week or 10 days. Now the Postal Service is going to be pushed by the very Congress that cannot enact postal reform to start cutting costs again. More mail processing plants will be on the cutting list. Newspaper mail will get slower and our readers are the ones taking the losses.”