**[Statement of Robert E. McLean, Executive
Director]{.smallcaps}**![](media/image1.png){width="0.9090277777777778in"
height="1.4145833333333333in"}

The Mailers Council is the largest group of mailers and mailing
associations in the nation. We are a coalition of corporations,
nonprofit organizations and major mailing associations that use the
United States Postal Service to deliver correspondence, publications,
parcels, greeting cards and payments. Collectively the Council accounts
for as much as 70 percent of the nation\'s mail volume.

To summarize the written testimony we submitted last week, our members
need a healthy Postal Service; however, its long-term finances are
decidedly unhealthy. We believe the Postal Service cannot survive
another decade as it is currently chartered because of mounting
long-term debts, competitive challenges it faces from the outside and
structural limitations that handicap management from within.

As the commission members consider ways of addressing the Postal
Service's problems, we believe the following six recommendations would
help revitalize this institution that we consider a vital business
partner:

1.  Continue universal service.

2.  Improve productivity.

3.  Enhance mailer options.

4.  Enhance postal compensation.

5.  Improve financial transparency.

6.  Invest in technology.

As for this panel's specific topic, the Postal Service's price-setting
process, let me note, first, that for business mailers, the groups that
pay the overwhelming majority of postage in this country, a postage
increase is never "just" a penny. Postage can be one of the largest, if
not the largest expense for a mailer, so postal increases can be the
single biggest cost increase in a given year. A one-penny increase in a
First-Class stamp costs most Americans only a few dollars more a year.
But for a business that mails invoices, magazines, newsletters,
newspapers or advertisements, a typical postage increase translates into
thousands or hundreds of millions of dollars in added expenses.

Postage is, for most mailers, a fixed expense. So with every postage
increase, mail volumes decline even further, creating the need for yet
another rate increase, and the cycle begins again. Declining volume is
always a source of concern, but is especially troublesome now because
annually the Postal Service is adding anywhere from 1.5 to 1.7 million
new addresses annually. Those additional deliveries---whether the
carrier has one letter or a dozen---require the construction of new
facilities, the hiring of more employees and the purchase of more
vehicles and fuel.

As for the rate process itself, mailers agree that the current process
is too long and too expensive. We understand that the Postal Service
must be allowed to respond more quickly to changing costs and changing
market conditions. But for mailers, the current regulatory process is
prohibitively expensive. Costs for hiring postal attorneys and
economists range from a quarter of a million dollars to over \$1
million.

To reduce those costs we believe the Postal Service should adopt the
General Accounting Office's recommendation to improve the transparency
of its financial reports. Better financial information could reduce the
time spent obtaining and reviewing essential information, and ensure
that the Postal Service has fairly determined how and where it will
increase the price of postage.

In conclusion, let me stress that this institution is a vital business
partner for all of our members---an irreplaceable one for many. The
Postal Service makes it possible for businesses to market their products
and services and to get them delivered. America\'s printed word depends
on a uniform nationwide delivery system. In many areas of the country
the Postal Service is our only delivery option and the only reasonable
means of marketing a product or service. Without a national postal
system, American commerce and government will be harmed irreparably.
Thank you for this opportunity to explain how important it is that there
be a future for the United States Postal Service.