Proposed postal rate hikes, cuts in mail delivery of most concern to greeting card companies, newspapers, magazines as U.S. Congress works to keep USPS afloat; post office wants go-ahead to start shipping beer, wine

Sandy Yang

Sandy Yang

Mar 28, 2012 – Industry Intelligence

LOS ANGELES , March 26, 2012 () –

As the U.S. Congress begins this week to work on keeping the U.S. Postal Service afloat, proposed postal rate hikes and cuts in mail service are raising the most opposition from greeting card companies, newspapers and magazines, reported The New York Times on March 25.

The post office also wants permission to expand into shipping beer and wine, which is prohibited under current postal regulations. This would allow it to compete with FedEx Corp. and United Parcel Service Inc.

Allowing wine and beer to ship through the mail would lower shipping costs for wholesalers of those products, said Pete Johnson, a program manager for the Brewers Association, the Times reported.

Raising the postal rates worries greeting card companies as it “would cause people to turn more to electronic mail and away from physical cards,” said Rafe Morrissey, VP for postal affairs at the Greeting Card Association.

Electronic communication is of less concern than it is for some other industries, though, he said, noting that about 60% of greeting cards are still mailed, reported the Times.

Many companies are concerned about cuts in service. Medco Health Solutions Inc., a drug delivery company based in Franklin Lakes, New Jersey, said that eliminating Saturday delivery could cause problems for those who need their medications on time.

Lawmakers also are afraid that the proposed cuts will have an adverse effect on businesses, including the Postal Service, the Times reported.

U.S. Sen. Susan Collins, a Republican from Maine, said that businesses have told her they would move more of their communications to the Internet if the mail service deteriorates. This would eventually cause the Postal Service to be “sucked into a death spiral,” she said.

A lot of businesses depend on the Postal Service, said Benjamin Y. Cooper, a Washington lobbyist and a coordinator for the Coalition for a 21st Century Postal Service, a group that represents companies such as FedEx, which sometimes hands off its shipments to local post offices.

The Postal Service is losing US$36 million daily due increased use of the Internet for correspondence, news and bill paying, as well as the financial burden of having to pay $5.5 billion a year into a fund for its future retirees, reported the Times.

The primary source of this article is The New York Times, New York, New York, on March 25, 2012.

 

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