Canada Post rate increase likely to be 3%

Canada Post has apparently heard what the magazine industry was saying and moderated its rate increase, which will come into effect in January. According to a letter sent to Canada Post president Moya Greene by Magazines Canada President Mark Jamison, the rate increase will be about 3%. It will be officially announced in July. Last year, in some categories, postage rates for magazines in some weight categories went up by as much as 9%. The Canadian Business Press reports on its website that industry talks with Canada Post have convinced the Crown corporation to hold increases to close to the rate of inflation.

Magazines Canada is not so happy about Greene's comparison of publications mail with the Canada Post business of delivering small packages.

"While we were hopeful that CPC would not increase Publications Mail rates again in 2007,we recognize that a 3% increase as you announced is less dramatic than the increases the sector sustained from 2002 – 2005," said Jamison. "We encourage Canada Post to continue to moderate rate increases in order to maintain and build Publications Mail volume.

"We do wish to take issue with the comparison made between postal rates for individual magazines and those available to small business parcels. There are significant differences between these products and the relationship of these business sectors with Canada Post. Magazines are shipped in great volume and provide volume commitments to Canada Post.As part of this relationship, the vast majority of magazines are pre-sorted, saving Canada Post considerable cost. Additionally, magazine delivery standards allow for slower deliverythan business parcels.

"In addition to the Publications Mail category, Canadian magazines contribute millions more in business to Canada Post through first class lettermail, parcel delivery, business reply cards and admail."

Meanwhile, the industry is keeping its powder dry. A select group of consumer industry heavyweights have been working on a feasibility study about creating an alternative delivery system. It is highly likely that Canada Post has heard about it.