Palletization debate stirs; bigger players favored, say small publishers - Update

It's remarkable how second-class mail-such a small portion of the mail stream-can stir up so many bitter arguments. The latest is over the U.S. Postal Service's proposal in September to offer a discount to publishers who palletize their magazines.

Executives at small-circulation periodicals are generally livid. Although past proposals have been rejected by the Postal Rate Commission, the current one stands a good chance of being approved sometime next summer, most experts predict.

Under this proposal, publishers who palletize would qualify for a slight discount on per-pound charges, ranging from 0.3 cents to 4.4 cents, and those who do not would face a nominal rate increase. "We're trying to save money for the American people by getting things done before they magazines) get into our system," says Postmaster General Anthony Frank.

One of the reasons this proposal is likely to win PRC endorsement is that it's what the assistant postmaster general for rates and classifications, Frank Heselton, calls "revenue neutral." That is, the discounts are aimed at saving the USPS money and not at either spending or gaining additional revenue.

Most small publishers, however, resent the idea of any increase on top of the massive rate hikes imposed on. them last February, and the American Business Press (ABP) has been particularly critical. The Postal Service, ABP says, succumbed to pressure from the Magazine Publishers of America, as well as from such mass-circulation magazines as Time, Newsweek, Reader's Digest and TV Guide-all of which have used pallets for years.

But the majority of magazines are the small-circulation trade and association journals, most of which lack the necessary volume to palletize. They'd be forced to co-palletize with other magazines in order to reach the Postal Service's 600-lb.-per-pallet weight limit. "The discount is certainly not something that will help us," says Cleveland-based Penton Publishing's postal liaison, Janet Hannan.

"We're not thrilled about it because we'll have to meet all kinds of deadlines in order to co-palletize our magazines. We're just trying to avoid the penalty. "

Adds Ann Haire, senior vice president at New York-based BPI Communications Inc., publishers of Billboard, The Hollywood Reporter and Musician, among others: There may be instances with a couple of our monthlies where we can co-palletize, but that's only two out of 20. In our case, we're talking about extremely time-sensitive weeklies, and we can't co-palletize them with other magazines within our company."

But both Heselton and Postmaster General Frank insist virtually any publisher can palletize, regardless of circulation. "There are opportunities for palletization-it can be done [by smaller publishers], " Frank says.

"Our position is that publishers stand to benefit from this," Heselton says.

Jim Funk, vice president of manufacturing for Tuisa-based PennWell Printing Co., says the minimum pallet weight of 600 lbs. keeps small-circulation magazines from taking advantage of the discount. "If the USPS were to drop that limit to 300 lbs., then we could do it," he adds.

COPYRIGHT 1991 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2004 Gale Group