|
News Article
|
Higher postage hits mailing services
By Robert Gray
When the price of postage goes up May 11, companies that provide mailing services in El Paso say they’re concerned it will cost them business and increase their costs significantly.
“Almost every time postal rates increase, we see a decrease in business of about 10 percent,” said Ron Harris, president of H & H Mailing Services on El Paso’s Eastside.
And before the May price increase, business mailers will have to adapt to new U.S. Postal Service requirements in order to qualify for presorted mail rates.
Harris said the new regulations will force him to retrofit his equipment, a move he expects will cost about $85,000.
“It is an expensive proposition for mailers,” he said.
Mailing services companies save their customers money on postage by doing some of the things the U.S. Postal Service normally does, like sorting the mail. That in turn saves money for USPS, and some of those savings are passed along to customers as lower prices.
USPS now requires that business mailers match their address lists with official change-of-address orders. Soon it will also require mailers to use intelligent barcodes that expand the ability of customers to track their mail.
“We are doing more for the post office than we ever have, they are doing less, and they are charging everyone else more for postage,” said Frank Winslett, owner of AUS Services in East El Paso.
Rate increase
Postage rates for presorted mail vary widely and are dependent on many factors, including how many pieces are being mailed, the size of the pieces and their shape.
According to a USPS spokesperson, the presorted standard mail rate will increase by about 3.8 percent.
But multiply that increase by the tens of millions of pieces of mail sent every year by El Paso mailing services, and the increase becomes significant.
Harris said his company mails an average of 20 million pieces a year; Winslet said AUS mails about six to seven million pieces.
The rate increase will keep up with rising operational costs due to inflation, according to USPS.
“We do not receive tax dollars to cover the cost of operations and must adjust our prices to cover our costs,” a spokesperson for USPS wrote in an e-mail interview.
“The Postal Service is not immune to rising costs which are affecting homes and businesses across America today,” Postmaster General John Potter said in a release.
Harris said his volume typically drops after postal rates go up because businesses generally don’t anticipate rising costs when creating their yearly budgets. So they cut back on the number of mailings.
Harris said he saw a decrease in business when rates were raised last year, but built the business back up by attracting more clients. He is also working to expand his business by making rubber stamps.
“We are doing more work for less money,” he said.
Tough year
The rate increase comes after a tough year for the U.S. Postal Service.
In El Paso, 2008 mail volume totaled 260.9 million pieces, a decline of 6.5 percent compared to 2007, according to a USPS spokesperson.
USPS concluded its 2008 fiscal year with a net loss of $2.8 billion.
The national economic slowdown caused a decrease in mail volume, according to the Postal Service FY 2008 annual report.
Last year, mail volume nationwide totaled 202.7 billion pieces, a decline of 4.5 percent, compared to 2007.
The loss occurred despite more than $2 billion in cost-cutting measures that included the use of 50 million fewer work hours compared to the previous year, according to a USPS release.
“We expect the new fiscal year to be another difficult one for the Postal Service and the entire mailing industry, as economic factors will continue to reduce mail volume and increase expenses,” Potter said in a release.
|
|