In a word chaos! And chaos is good for postal customers. With rejection of the exigent rate case, the USPS and Congress have been denied the easy way out of their financial crisis. If this rate case had been approved major structural changes would have been put off until the next rate case and then the next. The PRC, postal brass, postal unions (employees), and some in Congress believe that the status quo can still work (for them) if customers are only charged higher postage costs.

These Washington "stake holders" don't understand that they no longer retain a monopoly on message delivery and that postal customers are free to leave the mail stream at any time. Our industry needs chaos within this USPS community to force a change in the entrenched Washington mentality that rate payers will pay whatever rates are imposed. The direct mail industry needs structural changes at the Postal Service starting with a mandate to grow mail volume, deliver customer service at every postal touch point, and lower postage costs. Congress must be involved to make these changes happen!

The problem for the mailing community is that these Washington "stake holders" aren't stake holders; they're the groups tasked with providing message delivery services for the nation. Unfortunately they're not prepared or equipped to compete for customers and revenues in the current marketplace. Their simplistic view of this market, where higher postage rates lead to higher revenues, only works if customers don't have options and are forced to use the USPS no matter the financial cost. In the competitive market the Postal Service now finds itself, higher postage rates will generate fewer customers and a continuing loss of mail volume.

The only groups with a real say in the future of the USPS is the rate payer and congress. The future of the USPS depends entirely on how the Washington political class structures postal costs and the resulting affect on postal rates. Politicians, labor leaders, and regulators must understand that the days of forcing rate payers to cover the cost of keeping their constituents happy is over. It's crystal clear that rate payers, past, present and future customers, are unwilling to absorb higher costs for use of this government owned delivery system.

The constitution specifically requires congress to provide two things, the defense of our nation and the establishment of the post. The Postal Service isn't a luxury item like highway tunnels for endangered species. And it is of greater national importance, with a larger impact on employment, than trying to save GM. Politicians act as if the USPS is an undue burden on the federal budget and any money they might appropriate for it will only bail out big business (that might not support their reelection).

Let's be clear, congress does not now fund the Postal Service and hasn't since the mid seventies. This mess we are in started ten years ago when the USPS significantly raised prices three times from 1999 to 2002. If congress had stepped in then to cover their fair share of postal costs rates would have remained much lower, with mail volume and the service's customer base being significantly larger today.

With lower rates many small and medium sized businesses would not have been forced out of the mail stream. Larger companies would not have been forced to invest so heavily in their Internet offerings. The USPS would not have been instrumental in pushing messages out of the physical mail stream to the Internet. Many direct mail customers would not have made the budgetary decision to eliminate postage as an expense!

The Postal Service started hemorrhaging small and medium sized customers in 2002. With the frequency and size of rate increases coming from the USPS, there was an implicit promise from this governmental incarnation that rate increases were going to continue until no one could afford to do business with the Postal Service. Small and medium sized businesses were forced to turn to the Internet in a search for an alternate, affordable means of communicating with customers.

This trend continued through another rate increase in 2006 and was accentuated with flat redesign in 2007. During these economic boom years the real estate and financial services sector increased their mail volumes significantly, masking the loss of the Postal Service's key base of customers. When the economy turned down and these two sectors tanked, there were no base customers left to prevent a free fall in mail volumes leading us to postal insolvency.

So congress, you're about to discover the cost of having your hand in the postal cookie jar these many years. You set up the system demanding captive customers pay the total costs for delivering mail (including your free mail and discounted non-profit mail), force over payments for government employee benefit costs, fund the cost associated with postal locations (Post Offices) that mailers didn't need or use, eat the costs associated with uncontrolled union negotiations and pay the costs of pet projects and various requirements you placed on the Postal Service as if it was your money being spent.
The question is do you (congress) want to cover the entire $70 billion it takes to keep the USPS delivering Aunt Minnie's post card and your union constituency employed, or would you like some help with these costs. We as postal customers are no longer going to pay the entire cost generated by a postal system that is constitutionally mandated to be a congressional responsibility. We have options, you do not!

If you would like help keeping the USPS vibrant and alive, with as little negative impact on the federal budget as possible, direct mail customers need postage rates that are affordable and able to entice new customers into the mail stream. We need a board of governors that have significant business experiences and are capable institutionalizing a pro-growth pro-customer agenda. We need a management team capable of delivering, not only the mail, but the least combined cost of delivery for postal products and a tolerable experience for customers when they interact with postal employees.

Rate payers need an atmosphere at the USPS that says we want your mail and as much of your mail as you can generate and then ask how they can help us generate even more mail. We are at a point where we will no longer accept restrictive hours, restrictive rules, and obstructionist employees. The direct mail industry is willing to cover the reasonable costs of delivering our products. We will not cover any additional costs of the Postal Service, which are a congressional responsibility!

It's OK if you don't want our help. The milking of this cow until she's dry won't take much longer. Most companies involved with direct mail have heavily invested in Internet technologies and will gladly transition all of their customers and operations on-line. New customers are nonexistent due to the high (and rising) cost of postage and oppressive regulations are reducing the marketing viability of mail pieces. Mail piece designs are becoming so homogenized through regulations that only an envelope manufacturer could love the lack of creativity.

Congress, the direct mail industry is at a tipping point; do you want to spend money on earmarks or fund the United States Postal Service alone. It's your choice, but it's going to take substantially lower postage rates and a reduction in regulations to keep your current customers in the mail stream helping you cover some of your Postal Service's operating costs!

Todd Butler, Butler Mailing Services, eKEY Technologies can be reached at 513-870-5060, or