Bean, Collins back plan for postal rates

Tuesday, November 15, 2005

PULSE: Edward D. Murphy

To say that L.L. Bean relies on the Postal Service is a pretty dramatic understatement.

"It goes back to our roots," said John Oliver, the company's public affairs director. "L.L. started the company the same year that parcel post was established, which made the business work."

There's that history, plus the fact that millions of Bean catalogs end up in mailboxes. Its shipping still depends partly on the Postal Service, although most packages are sent via FedEx.

So Bean has more than a passing interest in pending legislation in Congress to reform the way postal officials set rates.

The current system is long and arduous: A commission reviews rate requests, then considers any challenges, before coming up with a new rate that takes months to implement. Lawyers who specialize in postal-rate changes love this system.

Sen. Susan Collins, R-Maine, wants to change that process by allowing the Postal Service to independently set rates up to a limit that would be based on the rise in consumer prices. Any challenges would be dealt with after the fact, allowing postal officials to move more nimbly in response to rising costs.

Sen. Kit Bond, R-Mo., however, has a hold in place on the legislation, meaning it's unlikely to go anywhere this year.

Missouri, by the way, is home to Hallmark, the greeting card company that is adamantly opposed to postal reform for fear that future rate increases would fall disproportionately on first-class postage. That would be bad news for Hallmark, since it would make it more expensive for customers to send out cards.

There are billions of dollars at stake and, according to Bean, the future of mail service itself.

Oliver noted that postal volume has been falling for years, largely due to the advent of e-mail.

But mail remains an efficient way to send out bulky catalogs. It is still a little more comforting, too, to leaf through a catalog - for, say, outdoor gear and casual clothes - in a comfortable chair in front of a roaring fire than hunched over in front of a computer screen.

First-class, household-to-household mail now accounts for just 6 percent of the Postal Service's volume. Bulk mail makes up 85 percent. So naturally, postal officials want to keep the bulk mailers happy.

And bulk mailers are companies that like some certainty about costs. Most bulk mailers, including Bean, back the reform proposal.

Oliver said the company is worried that without a rate process that provides the Postal Service with some financial stability, six-days-a-week home delivery and universal delivery - taking the mail to every address - are both in jeopardy.

For her part, Collins said changes are vital and thinks the reforms would give the Postal Service the flexibility to adapt to changing markets while also forcing it to live under some restraints, as represented by the cap on increases.

Otherwise, she said, the Postal Service might find itself "in a death spiral where they'll keep raising rates to make up for lost volume and keep losing volume because they're raising rates."

The process has taught her one lesson, Collins said.

"I now understand why postal reform passes only once every 30 years," Collins lamented last week after talks with Bond failed to move things along.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at: emurphy@pressherald.com

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