Cut Proposed in Postal Rates Used by Junk Mailers

Get ready to receive more junk mail, if a Postal Rate Commission decision takes effect.

The independent commission approved a plan Friday that would reduce postal costs for direct mail advertisers and others who presort their materials. The move, which must be approved by the Postal Service board of governors, would encourage firms to automate their mailings.

“Any cuts in rates will increase [mail] usage,” said Jack Habif, plant manager for U.S. Mailers, a Los Angeles-based commercial mailing firm.

“Anyone who uses mail for advertising and marketing purposes” will benefit from the rate cut, said Gene Del Polito, president of the Advertising Mail Marketing Assn., a trade group for bulk mailers.

Firms such as Publishers Clearinghouse, Reader’s Digest and Columbia House Record & Tape Club should see lower costs, Del Polito said.

The biggest beneficiary of the move would probably be Advo Inc., the nation’s largest direct mailer, known for its Shared Mail, Mailbox Values and Marriage Mail circulars.

Friday’s decision “is a solid first step toward making the Postal Service more competitively fit,” said Robert Kamerschen, Advo chairman and chief executive.

Shares of the Connecticut-based company closed at $20.625, up 12.5 cents, on the New York Stock Exchange on Friday.

But the move could also increase competition for major newspapers, some of direct mailers’ closest competitors.

“The end result will be lower rates for bulk advertising mail that generally winds up in the wastebasket,” said John F. Sturm, president of the Newspaper Assn. of America, the newspaper industry’s chief trade group, which opposes the rate move.

Not surprisingly, consumer advocates said more junk mail would be a source of irritation. Beth Givens, project director for the Privacy Rights Clearinghouse in San Diego, said the chief complaint among the 10,000 callers a year to that public interest organization is the amount of junk mail received.

“Some of the angriest callers are calling about junk mail,” she said.

Under the commission’s proposal, first-class and second-class mail rates will not be affected. Second-class is typically used by magazines. The commission also rejected a bid to increase the 20-cent postcard rate by a penny. A plan to raise mail costs for weekly newspapers and shopping guides was also scrapped.

The proposal calls for the Postal Service to combine third- and fourth-class mail--the classes typically used by bulk mailers--into a new “standard” class. Presorted, automated mail would be put in a subcategory of the standard class, called “enhanced carrier route,” which would cost 3.7% less than current rates. For those who do not sort their mail completely, fees would rise 3.5%.

Presorted mail constitutes 89% of all third- and fourth-class deliveries.

The Postal Service carried 72 billion pieces of advertising mail in 1995. That accounted for 38% of total mail volume and 22%, or $11 billion, in postal revenues, according to trade groups.

The reorganization is not expected to change the total of Postal Service revenue.

Associated Press contributed to this report.