Advertisement

Archive for Tuesday, January 8, 1991

LOCAL BUSINESSES BRACING FOR POSTAGE RATE INCREASE

January 8, 1991

Advertisement

Local businesses that use the mails as a major part of their operations are keeping a close eye on how high the U.S. Postal Service will set its new rates this month.

However, some businesses already have made plans to absorb the anticipated rate increase, which could increase their mailing costs as much as 25 percent.

The U.S. Postal Service is expected to decide by Jan. 16 on new rates for different classes of mail, said Lawrence Postmaster Bill Reynolds.

Last week, the independent Postal Rate Commission recommended raising the rate for a first-class letter by 4 cents, to 29 cents. The PRC recommended that the rate for third-class "junk mail" be increased by 25 percent.

Reynolds said the Lawrence post office's top two business customers are the Student Loan Marketing Assn. (Sallie Mae), 2000 Bluffs Dr., and Allen Press, 1041 N.H.

PHIL NOWAK, manager of Sallie Mae's local loan processing center, said he didn't have figures available on the amount of mail the company generates. But he said the first-class mail generated by the local office includes individual letter correspondence, billing notices and responses to loan inquiries, he said.

"There are a wide gamut of letters associated with loan transactions," he said.

Although the new postal rate will affect the company's mailing costs, Sallie Mae has budgeted for the expected cost increase, Nowak said. "We've worked to absorb that. We knew it was coming."

John Breithaupt, director general of marketing and association management services at Allen Press said the company, which publishes about 250 scientific and scholarly journals, mails more than 1.5 million journals per year.

"We're primarily a second-class status mailer and also do some third-class bulk mail as well," he said.

BREITHAUPT said the company was anticipating a rate increase for second-class mail, a non-profit category, ranging from 23 percent to 28 percent.

"On third-class it could be anywhere from 25 percent to 40 percent increase, depending on the weight of the piece," he said. "It could even be closer to 50 percent on some pieces of bulk mail."

Although the costs are passed on to the consumer, he said the U.S. Postal Service is promoting discounts for bulk mail processed through automation. He said the company's computer software programs have been set up to allow it to benefit as much as possible from automation.

The Kansas University Alumni Association also is likely to be affected by a postage increase. Fred Williams, its director, said the alumni association sends "hundreds of thousands of pieces of mail" per year to about 180,000 people on its mailing list.

He said the association's mailing list includes 45,000 dues-paying members of the organization, 115,000 graduates of KU and 65,000 people who include former students, donors and friends of KU.

WILLIAMS said he has not yet figured what a postage increase would mean to the association's budget. But he said any increases in mailing costs would mean cuts in other overhead.

"Any increases that we see are pretty much not within our resources," he said. "This simply means we will have to skim back a little bit on the efforts we make in behalf of the university to perpetuate our membership."

He said the alumni association already has taken some steps to reduce its postage costs by changing its publication schedule from eight to six times a year.

Local utility companies also would be affected by a postage increase. For example, Steve Johnson, manager of KPL Gas Service, Lawrence's electric utility, said the company mails 1.2 million billing notices each month to its customers in Kansas, Missouri and Oklahoma.

Johnson said he was uncertain how the utility would be affected by a postage increase but said the company would have to obtain regulators' approval to pass any postage increase on to its customers.

Commenting has been disabled for this item.