USPS reminds publishers that they only pay 27 cents apiece to mail magazines

postal 3 Comments

magazinesThe US Postal Service apparently feels that the magazine industry needs a reality check. Last week an industry spokesperson complained about recent price increases and warned that new legislation would allow the USPS to charge “whatever it wants”- you know, the way magazine publishers do!

In response, the USPS claimed yesterday that pending legislation would still include restrictions on the USPS’s ability to raise prices. More importantly though, the agency reminded the publishers that they still get a much better deal than the average American- 27 cents postage to deliver a magazine. The USPS also points out that 27 cents doesn’t cover its costs- so the rest of us get to pay a little extra to mail our bills and cards in order to subsidize the magazine industry.

Here’s the USPS response, as published in USPS News Link:

Does legislation pending in the U.S. Senate designed to reform current laws governing USPS give the organization “unchecked, unprecedented power to charge Americans whatever it wants for its services?”

The answer is no, based on protections against theoretical monopoly abuses in current laws.

This assertion was made by Association of Magazine Media CEO Mary Berner in an opinion article that appeared in the publication, Roll Call. But, according to USPS officials, the underlying sentiment of Berner’s assertion is untrue.

“The bill provides reasonable authority and greater flexibility to develop and price products and services,” USPS said in response to Berner’s article. “This is a basic need for an organization that derives all of its income from the sale of postage.”

Also, the Postal Service and the Postal Regulatory Commission (PRC) are bound in current law to determine “just and reasonable” postage rates. This requirement won’t change under proposed legislation. “It will always be in our interests to preserve the affordability of mail,” USPS said in the response.

Magazine publishers only pay about 27 cents for delivery on average, a fee far lower than the rate at which the Postal Service can recover its costs to deliver their products.

  • @nonprofitpostal

    Does 27 cents include or exclude the “worksharing” portion of magazine distribution? Because if 27 cents is exclusive of worksharing, then publishers are paying others, rather than the USPS, for a significant portion of magazine mail preparation and transportation. The cost tend to close in on letter mail faster than the USP might wish to reveal as they fuss about magazine postage.
    “Worksharing” by magazine publishers andor their suppliers pays the USPS to do what it does best –deliver the last mile– and avoids the USPS for what it does not do well–long distance transporation. Instead, publishers pay for postal software and people to operate it, trucks that dropship magazines to far-flung USPS plants across the country, and the diesel that goes into those trucks, and so on. That is distribution cost magazines pay to their worksharing partners, not the USPS.
    And let’s consider this: Magazines are a very small percentage of overall volume handled by the USPS. The last time I looked it was about 5% of all volume and 3% of revenue. Magazine postage can quadruple and not a dent will be much in favor of the financial well-being of the USPS. Given the other solutions before Congress, squeezing more out of magazine postage is a limited solution.

    • postalnews

      I haven’t double checked the numbers, but I assume it’s simply magazine revenue divided by magazine piece volume from RPW, so it wouldn’t include the cost of presorting and dropping at plants, etc. I don’t see how that’s relevant though- the point is that it costs the USPS more to deliver magazines than the USPS gets paid. The money publishers pay for sorting and transportation doesn’t help the USPS bottom line.

      Non-periodical mailers also do a lot of presorting and drop shipping- but the postage THEY pay the USPS DOES cover the USPS cost of delivery and then some. Making magazines pay their fair share certainly won’t solve all of the USPS’s problems, but then neither will any other individual action the USPS might take. That doesn’t mean they shouldn’t do it.

  • http://markgold.wordpress.com/ MarkGold

    who do they think they are, red chinese?