POSTAL SERVICE SEEKS DISCOUNT PERMIT

POSTAL SERVICE SEEKS DISCOUNT PERMIT

The U.S. Postal Service again wants to offer Express Mail users a volume discount.

It seeks to offer a 12 percent price break on domestic shipments, except for letters weighing 8 ounces or less. The discount would apply once a shipper accrues more than $5,000 in Express Mail bills within a month.The Postal Rate Commission will decide the discount's fate by January. The Postal Service requested the price cut in a rate filing submitted on March 6.

Should the commission back the Postal Service's request, the discount would take effect in February. In the same filing, the post office sought permission to raise the price of shipping overnight Express Mail letters of up to 8 ounces by $1, to $9.75.

The Postal Service failed two years ago to convince the commission to back a somewhat similar Express Mail volume discount. The commission said then that the Postal Service failed to justify the price cut in terms of lower handling costs.

It's likely, however, that the volume discount will apply to international Express Mail shipments, regardless of the Postal Rate Commission's decision on the domestic discount, Postal Service officials said. That's because the

commission doesn't review rate setting for international mail.

Officially, the Postal Service still hasn't decided whether to apply the volume discount to international shipments, said Don Allen, director of the rates office. Some Postal Service marketing personnel, however, already are touting the benefits of those incentives.

The Postal Service seeks the discount to increase the appeal of its Express Mail service and make it more competitive with similar product lines offered by commercial operations such as Airborne Express, DHL Worldwide Express, Federal Express Corp. and United Parcel Service Inc.

Such discounts are the "industry norm in order to attract volume sales," Mr. Allen said.

They're a way of life, added Kent Freudenberger, Airborne's executive vice president, marketing.