AN OPEN LETTER TO THE MEMBERS

OF THE PRESIDENT’S COMMISSION ON THE

UNITED STATES POSTAL SERVICE FROM:

CONTINUITY SHIPPERS ASSOCIATION

MAILING & FULFILLMENT SERVICE ASSOCIATION

MAIL ORDER ASSOCIATION OF AMERICA

POSTCOM

SATURATION MAILERS COALITION

May 19, 2003

Dear Commissioner:

The Commission website reports that several private meetings have taken place between individual Commissioners and businesses, and their association representatives, that compete with the Postal Service. The headline summary for one of these meetings describes the association’s concern as “the subsidy for third class advertising mail by first class mail revenue” —a factually untrue statement.”

For decades, advertising mailers have repudiated factual misstatements like this when they appeared in editorials or in testimony before the Postal Rate Commission—usually promoted by the Newspaper Association of America (NAA) to preserve their members’ virtual monopoly position for the delivery of preprinted inserts.

Today’s postal rates are the result of protracted, fully litigated on-the-record proceedings that, by law, prohibit any cross-subsidy among classes. The suggestion of a cross-subsidy accuses the Postal Rate Commission of dereliction of duty and is an attempt to advance a notion that has been repeatedly rejected.

Please take a few minutes to review the following charts that separate fact from fiction.

FIRST CLASS RATES HAVE NOT GROWN AT A RATE

THAT EXCEEDS INFLATION

An 8 cent first class stamp in 1971 would cost 36.88 cents in today’s dollars. Additionally, in 1971, the Postal Service still received taxpayer subsidies.

From the perspective of the taxpaying/stamp buying public, the 37 cent stamp is a better deal today than the 8 cent stamp in 1971.

FIRST CLASS POSTAGE RATES

HAVE NOT INCREASED AT A HIGHER PERCENTAGE

THAN STANDARD MAIL RATES

For individual categories or subclasses of standard mail, postal rate increases have been less due to additional mailer worksharing (that cost the mailer more) and have saved the Postal Service billions of dollars.

THE LOCAL ADVERTISING MAIL DELIVERED BY

THE POSTAL SERVICE THAT COMPETES WITH

INSERT DELIVERY OF RETAIL CIRCULARS IN

DAILY PAPERS (ECR MAIL) IS SUBJECT TO THE

HIGHEST PERCENTAGE MARK-UP TO POSTAL SERVICE

INSTITUTIONAL COSTS OF ANY SUBCLASS

IN THE POSTAL SYSTEM – OVER 200%

The postal rate paid by first class mailers would be higher without the contribution from retail advertising mail.

THE POSTAL SERVICE HAS BECOME MORE DEPENDENT

ON STANDARD MAIL GROWTH TO SUPPORT

THE INSTITUTION AND THE CONTINUING EXPANSION

OF ITS DELIVERY NETWORK

First class mailers, and first class volumes, will not benefit if higher rates or inflexible preparation requirements drive standard mail out of the system. Standard mail is critical to the survival of the Postal Service as it is a major contributor to the high fixed cost of providing universal service without consumer access fees.

ADVERTISING MAIL IS NOT JUNK

To consumers. 81% of consumers rank retail circular flyers as somewhat to extremely useful; 77% rank catalogs as somewhat to extremely useful; and 8 in 10 consumers use coupons at least some of the time. Source – NFO World Group Research, March, 2002 and February, 2003.

To the more than 3.5 million employees whose jobs depend on the advertising mail industry. Approximately one out of every 29 full-time jobs in the United States is related to advertising mail. Source – AMMA, 1993 Image and Advertising Mail.

To the American economy. In 2002, direct mail generated $636.7 billion in sales to business and consumers. Source – Wharton Econometric Forecasting Association.

To America’s small businesses that depend more on the mail to reach customers than other media. Source – NFIB (National Federation of Independent Business) Submission to President’s Commission on the United States Postal Service of February 12, 2003.