Printing, Mailing Industry Voice Concerns Over Crippling Rate Hikes to Combat U.S. Postal Service Dire Financial Condition (piworld.com)

The U.S. House of Representatives House Committee of Oversight and Reform conducted a hearing about the financial condition of the U.S. Postal Service (USPS) on April 30. One thing was clear: despite testimony from various constituents proposing ways to solve the problem, all sides agreed that the USPS’ financial condition remains dire. Even Postmaster General Megan Brennan sounded the alarm for meaningful postal reform while reporting that the Postal Service posted a net loss of $3.9 billion in 2018 — marking the 12th consecutive annual net loss it has incurred. The USPS’ predicament should also sound the alarm for printers.

Why? Because, historically, every postal price increase results in a corresponding decrease in print volumes for direct mail, periodicals, catalogs, retail inserts and the like.

That was one of the key points Joel Quadracci, chairman, president and CEO of Quad, stressed during his testimony at the hearing on behalf of the Coalition for a 21st Century Postal Service. The group represents the mailing industry supply chain, including paper companies, equipment suppliers, printers, packagers, retail and other postal customers.

“With postage now accounting for up to two-thirds or more of the cost of a mail piece (up from about one-third in the mid-2000s), there is only one way for print customers to manage their budgets if the price goes up — and that will be to reduce the volume moving through the mail,” Quadracci pointed out.

“Our customers demand predictability and affordability and, if prices increase, they react by reducing their volume to cover the extra postage or move away from print altogether,” he added. “Of course, this hurts the revenue of the printer but also reduces the volume going to the Postal Service, which further exacerbates the problem.”
more at source: https://www.piworld.com/post/printing-mailing-industry-voice-concerns-crippling-rate-hikes-combat-us-postal-service-dire-financial-condition/#ne=d7f0e6e16b0d037f71fc050491da5623&utm_source=today-on-piworld&utm_medium=newsletter&utm_campaign=2019-05-20

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