Answered by Dick Gorelick

Question:
I understand that postal rates will be increasing later this year. Is there anything I can do to offset those costs?

Answer:
You are correct. Not only is postage increasing but, as this is written, it appears probable that rates will increase on or about June 30, not at the end of 2002, as originally planned…. And those increases will be substantial, particularly in the case of catalogs, publications, and other bound products. In the past several years, marketers were able to compensate for the increase in distribution costs through more effective use of databases. However, that will become a greater challenge due to the size and frequency of postal rate increases over the next decade. Increases that are two or three times the rate of inflation may become the norm.

There is no basis for projecting a change in U.S. Postal Service operations that provides hope for stable rates through the rest of this decade. You will need to continue to make more sophisticated use of mailing lists and databases. You may also wish to consider use of high-bulk paper. Some mills are developing sheets that are 3% to 15% lighter in weight than comparable sheets with the same or similar characteristics. High-bulk paper may also help you to compensate for rate increases.