Washington, February 8, 2016 – On Friday, the American Catalog Mailers Association (ACMA) submitted a letter to Sen. Ron Johnson (R-WI), Chairman of U.S. Senate Committee on Homeland Security and Governmental Affairs, Senate Minority Leader Tom Carper (D-DE), and the entire Committee, alerting them that they missed the mark on several important points during a recent hearing on the state of the US Postal Service.
Most notably, more than one witness who testified during the Jan. 21 hearing indicated there was widespread mailing industry support for “baking in” the 4.3% exigent surcharge. “This is not the case. Even within ACMA members, support is split on this,” the ACMA letter reads.
“Realizing that some issues remain highly polarizing, ACMA favors limited postal reform,” the letter added. “We would hope that those items generally acceptable to the majority of stakeholders can be expeditiously passed into legislation, while more controversial items remain on the table for further debate and discussion. However, we are firmly opposed to extraneous postage increases with little cost improvement and overhead reduction in sight and felt some inaccurate messages were expressed during the hearing.”
The text of the ACMA letter can be found here…
February 5, 2016
The Honorable Ron Johnson
Chairman
U.S. Senate Committee on Homeland Security and Governmental Affairs
340 Dirksen Senate Office Building
Washington, DC 20510
Dear Senator Johnson:
On behalf of the members of the American Catalog Mailers Association (ACMA), I would like to thank you, Senator Carper, and Members of the Committee for holding the January 21st hearing on the US Postal Service and the reforms necessary to restore this great institution to financial solvency. It is clear that legislative measures are required if the Postal Service is to remain a valued service to all Americans without imposing a financial burden on the US taxpayer.
ACMA is the association representing catalog marketers and their key suppliers. The catalog industry represents $400 billion in annual commerce and is part of the larger mailing industry that represents $1.4 trillion of GDP and employs 7.5 million Americans, all of whom depend on the Postal Service. ACMA members need an efficient, reliable and predictable Postal Service to conduct our business. Catalogs are some of the largest USPS customers, are interested in expanding their use of mail, and mail across a variety of postal products.
Realizing that some issues remain highly polarizing, ACMA favors limited postal reform. We would hope that those items generally acceptable to the majority of stakeholders can be expeditiously passed into legislation, while more controversial items remain on the table for further debate and discussion. However, we are firmly opposed to extraneous postage increases with little cost improvement and overhead reduction in sight and felt some inaccurate messages were expressed during the hearing.
Specifically, some of the witnesses suggested a broad mailing industry consensus around “baking in” the 4.3% exigency surcharge. This is not the case. Even within ACMA members, support is split on this. Moreover, for nearly fifty years, Congress, in its wisdom, has decided not to directly set postal rates. Given that rate setting is rife with the potential for unintended consequences, we believe this is best left to expert bodies instead.
We do not favor revenue-based solutions to addressing Postal Service losses. In 2006, mail volume was 213 billion pieces and total expense was $71.7 billion. This past fiscal year, mail volume was 154 billion pieces and total expense was $73.8 billion. Mail volume has fallen nearly a third while total expenses are up slightly. While we applaud cost improvement initiatives, despite a significant reduction in mail volume, total expense has really not changed. Expense side solutions are clearly required before prices of mail services are increased. The numbers suggest significant excess capacity and cost still remains in the system. These must be addressed or no amount of volume-sapping price increases will close the gap. Just as in private businesses, hard choices must be made.
If the economics of mailing become even less favorable, mail will leave the system at a faster rate, leaving the taxpayer on the hook for the liabilities. This need not happen. While reducing the fixed costs of the USPS is critical given the continuing volume declines, there is no reason we cannot have a smaller but still profitable and efficient postal service supported by ratepayers not taxpayers. Either expense side controls are required or the Postal Service revenues must be capped to impose the required financial discipline.
Rate increases destroy postal volumes in a high fixed cost system that needs mail volume to cover these prodigious fixed costs. In 2007, catalog rates went up over 20% only to have catalog volume decline more than 30%. The exigent surcharge of 4.3% removed more than 6% from demand. These are facts. Just as competitive market pressures to improve efficiency and prevent businesses from unrestrained price increases, the USPS needs a countervailing force encouraging cost leadership and efficiency.
Addressing the legacy costs is also of great value. Only Congress can do some of these. Therefore, we urge you to pass legislation that 1.) reduces retiree healthcare costs using full Medicare integration; 2.) requires realistic and attainable prefunding requirements; 3.) specifies that postal-specific actuarial inputs be used in all calculations; 4.) enables the investment of existing pension and healthcare funds in more competitive vehicles than requiring sole use of lower yielding treasuries; and 5.) permits the Postal Service to engage in additional business activities that are aligned with its core competencies while not competing directly with the private sector.
We appreciate the opportunity to comment and respectfully request this letter be entered into the official hearing transcript as some of the issues discussed during the hearing and positions ascribed to mailers do not align with the interests of a majority of our membership.
In conclusion, we cannot support imposing additional price increases for mailers without a clear plan of continued cost improvement and overhead reduction. However, we do support moving forward on those provisions that enjoy broad support.
Thank you very much for considering our views.
Sincerely,
Hamilton Davison
President & Executive Director
American Catalog Mailers Association
cc: Members of Senate Homeland Security and Government Affairs Committee
Hon. Thomas R. Carper, Ranking Member
Hon. Kelly Ayotte
Hon. Tammy Baldwin
Hon. Cory A. Booker
Hon. Michael B. Enzi
Hon. Joni Ernst
Hon. Heidi Heitkamp
Hon. James Lankford
Hon. John McCain
Hon. Claire McCaskill
Hon. Rand Paul
Hon. Gary C. Peters
Hon. Rob Portman
Hon. Ben Sasse
Hon. Jon Tester
.
###
Price range: $100.00 through $250.00
You can assist with specific areas of ACMA’s program of work by providing much-needed resources dedicated to a particular issue. Our Industry Action Funds are segregated accounts held by ACMA, made available as a “war chest” to deploy on specific issues that impact direct and remote marketers and their suppliers — eliminating the time and effort needed to raise funds in the heat of battle.
Please note that your contributions to ACMA Action Funds will not be used for any general ACMA “corporate purposes” other than a 5% service fee on funds raised and administered. Non-ACMA members are always eligible to make one-off donations. Such contributions support our network of consultants on whom we depend to advocate for the interests of direct and remote marketers and their suppliers. These funds are only used to pay for out-of-pocket expenses of the specific issues outlined below. Large volume donors may be considered for Steering Committees of each Fund. Click here for more information on how the funds are distributed and used.
Restricted Status: Each Fund will be separately administered as restricted under the direction of the ACMA Board of Directors by the ACMA Treasurer and our association accountant. An elected Officer from the Executive Committee or the ACMA Board will authorize disbursements. Details on expenditures will be made available to any material contributor on request. Restricted funds may be released only upon authorization of the benefactor or in the event the contributing entity is defunct, by vote of the ACMA Board.
Use of Funds: Moneys from each fund may be used for hiring lobbyists, economists, attorneys, consultants, public relations or government relations personnel, conducting research or other surveys highlighting positions favorable to cataloging, supporting coalitions or other groups allied to our positions, paying for advertising aimed at influencing elected officials or other stakeholders, organizing grass roots outreach, education or advocacy in support of public policy positions or for other tactics favorable to ACMA policy positions. Money raised will not be used to support any political candidate or political party; these moneys must come from a Political Action Committee.
Lynn Noble is ACMA’s Vice President, Industry Relations, having joined the ACMA in May 2015, following an extensive direct marketing career in private industry as well as the US Postal Service. He is responsible for leading the membership development efforts for the ACMA through new member acquisitions and providing enhanced member value.
Throughout his career, Lynn has held key marketing & sales positions with several leading direct marketers, as well as several high-level management positions with the US Postal Service.
In 2009, at the request of the ACMA, the US Postal Service initiated a new position of Catalog Manager to lead the Service’s efforts to stabilize and grow the catalog industry. Lynn returned to the USPS to lead those efforts and was instrumental to developing a stronger industry partnership between the Postal Service and the catalog industry. Serving as the product manager for catalogs, Lynn helped to raise the awareness of catalog-specific business challenges within the executive ranks of the USPS. During his tenure, the ACMA and catalog companies enjoyed a collaborative and progressive environment that produced more stabilized rates and inclusion in key USPS promotional opportunities.
Just prior to joining the ACMA Lynn was the USPS’s Manager, Strategic Account Operations, leading a team of senior sales professionals who focused exclusively in the Catalog, Mail Order, and E-commerce arena. In addition to his Postal positions, Lynn previously held key positions with leading direct marketing companies, including Cox Target Media, Market Logic, Catalina Marketing, Freesamples.com, and Advantage Direct.
Named Vice President & Deputy Director in January 2010, Miller came to the ACMA following a lengthy career of more than two decades following the catalog/multichannel/e-commerce/retail businesses. Reporting to ACMA president & executive director Hamilton Davison, Miller oversees marketing and communications, membership development, and organizes and oversees ACMA’s National Catalog Forum, while working with Davison on most of ACMA’s postal-related efforts.
Miller started his career as a reporter with Catalog Showroom Business, following a form of retailing that was led by the likes of the Service Merchandise and Best Products retail chains.
After several years of editor/reporter roles with business magazines that followed the toy and gift industries, Miller was named associate editor of Catalog Age magazine (now Multichannel Merchant) in 1986. He rose up the ranks at Catalog Age over the next 18 years to be the magazine’s senior news editor.
Beginning in the late ’80s, Miller became Catalog Age’s postal beat reporter, where he’d follow key postal events and pull out the key catalog mail-related issues for readers. During that time, he attended many Mailers Technical Advisory Committee (MTAC) meetings and National Postal forums.
After leaving Catalog Age in 2004, Miller consulted with several catalogers and multichannel suppliers for a time, he was named news/website editor at Commercial Property News. Less than a year later, he was asked to take the reigns at Catalog Success (now All About ROI) where he served as editor-in- chief from 2006 till the end of 2009.
ACMA appointed Michael K. Plunkett as its President and Executive Director in January 2024, succeeding founder Hamilton Davison. Mr. Davison moved on to own and run a company. Mr. Plunkett brings years of executive leadership experience having been the President and CEO of the Association for Postal Commerce (PostCom) since 2017. In the newly-formed dual role, he will continue his current role with PostCom and the two organizations will operate separately.
During his tenure, PostCom has continued to lead the mailing and shipping industry on policy and regulatory matters and to work with Government agency partners to advance issues of importance to members. Mr. Plunkett is also President of the Delivery Technology Advocacy Council, a nonprofit launched in 2020 to concentrate on delivery and logistics technologies.
Prior to PostCom, Mr. Plunkett accumulated more than 25 years Postal experience with the United States Postal Service in numerous executive roles in operations, marketing, product development and pricing. As a leader within the Postal Service’s management team, Mr. Plunkett developed a well-earned reputation for innovation by leading efforts to develop pricing agreements for domestic services and in the development of the forever stamp and the priority mail flat rate box.
Mr. Plunkett has testified on pricing and policy issues before the Postal Regulatory Commission and Congressional subcommittees. He has authored and presented papers on postal policies, economics, and operations for National and International conferences.
Mr. Plunkett holds Masters Degrees in Business from the Wharton School at the University of Pennsylvania and the Massachusetts Institute of Technology, where he was a Sloan Fellow. He earned a Bachelor Degrees in Economics and Finance from the Pennsylvania State University.
