[Federal Register Volume 63, Number 16 (Monday, January 26, 1998)]
[Rules and Regulations]
[Pages 3642-3650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1670]


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POSTAL SERVICE

39 CFR Part 20


International Surface Airlift

AGENCY: Postal Service.

ACTION: Final rule.

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[[Page 3643]]

SUMMARY: The Postal Service published for comment a proposed rule 
amending International Surface Air Lift Service in the Federal Register 
on September 9, 1997 (62 FR 47394). The Postal Service hereby gives 
notice that it is adopting the proposal with minor revision.

EFFECTIVE DATE: February 28, 1998.

FOR FURTHER INFORMATION CONTACT: [Robert Michelson], (202) 268-5731.

SUPPLEMENTARY INFORMATION: On September 9, 1997, the Postal Service 
published in the Federal Register (62 FR 47394) a notice of proposed 
changes in rates and conditions of service for International Surface 
Air Lift (ISAL) Service. ISAL is a bulk mailing service for 
international shipment of publications, advertising mail, catalogs, 
directories, books, other printed matter, and small packets. The 
service is available to approximately 125 countries. To use ISAL, a 
mailer must send at least 50 pounds of these items at one time, 
presorted by country of destination. Identical piece mailings are not 
required to qualify. Postage for ISAL is calculated according to a rate 
structure including both per-piece and per-pound elements with 
destination countries separated into four rate groups. A discount is 
given to ISAL mail tendered at the Dropship ISAL Service Centers 
(Dropship ISCs) (formerly, gateway airport mail facilities) at New York 
(JFK), San Francisco, Chicago, and Miami, or when direct shipment (750 
pounds or more to a single destination) can be arranged from one of the 
acceptance cities. An additional discount is available for M-bags 
(printed matter to a single addressee).
    The Postal Service reviewed the current ISAL service and is making 
changes to ISAL preparation requirements that will reduce operating 
costs. The Postal Service also proposed rate discounts based on the 
place of mailing, the availability of transportation, and the volume of 
mail. The Postal Service believes that these changes make the service 
available to more users at more convenient locations and still will 
cover the cost of providing the service with a reasonable contribution 
to institutional costs. The Postal Service proposed the change to ISAL 
as described below.
    The Postal Service requested comments by October 9, 1997, and by 
that date received seven comments: five from international mail 
consolidators, one from a printing/mailing company, and one from an 
international mail order consulting firm.

Minimum Weight

    Currently there is no required minimum amount of mail per sack 
prepared by the mailer. The mailer merely places the mail for a 
particular country in a mail sack and labels the sack to that country. 
This has resulted in an unacceptable number of sacks containing small 
amounts of mail. In some cases, the sack itself weighed more than the 
mail in the sack. This resulted in an excessive number of sacks, higher 
transportation costs, and complaints from other postal administrations. 
Therefore, the Postal Service proposed a minimum weight of 11 pounds 
for direct country sacks prepared by mailers. When there is less than 
11 pounds, but 10 or more pieces (a package), the mailer will prepare 
this mail in a mixed country package rate group sack. This mail will be 
entitled to the ISAL rate as if it had been placed in the direct 
country sack. When there are fewer than 10 pieces to a country, this 
mail will be prepared in ``residual'' sacks by rate group. Residual 
mail cannot exceed 10 percent, by weight, of the rest of the mailing.
    One commenter agreed with the need to establish a minimum weight 
for direct country sacks since it ``would keep cost in line and 
increase the availability of equipment.'' Another commenter agreed with 
the need for change, but recommended that the 11 pound requirement be 
lowered and that smaller sacks be used.
    The Postal Service does not believe that it is practical to procure 
and use smaller sacks for ISAL. The same sacks are used by the Postal 
Service for other types of mail. The expense of acquiring, stocking, 
and distributing another type of sack that would be used only for 
mailer-prepared ISAL is not economical or feasible. Therefore, the 
Postal Service will adopt the 11-pound minimum sack weight for direct 
country sacks.
    One commenter thought the 10 percent residual mail rule was too 
restrictive and suggested a special rate for residual mail without a 
limit on the amount contained in the mailing. The Postal Service 
reviewed this suggestion and has decided to retain the 10 percent 
residual at the ISAL rate. Mailers can use the single piece rates, 
either air or surface, or make use of other international business 
products.
    One commenter questioned the definition of a package and suggested 
that a package be considered either 10 or more pieces or 1 pound. This 
would allow mailers to place more mail in mixed country package sacks 
instead of in residual sacks. The Postal Service reviewed this and has 
decided to amend the definition of a package to be 10 or more pieces to 
the same country or separation or 1 pound or more regardless of the 
number of pieces. Accordingly, International Mail Manual (IMM) 246.2, 
246.941a, 946.941b, and 246.942c are amended.

Acceptance Cities

    Since the inception of ISAL, the Postal Service has limited the 
number of cities where ISAL mailings could be deposited. This was 
intended to reduce the cost of maintaining an extensive transportation 
network. Many customers not located near an acceptance point could not 
use ISAL. The Postal Service proposed a Full Service rate that will be 
available from all post offices where bulk mail is accepted and will 
make ISAL accessible to all customers. Mailers may still mail at the 
lower Dropship ISC rate by tendering their mail to a Dropship ISC.
    One commenter opposed deposit of ISAL at all post offices because 
it would ``overload the transportation system, adversely affect 
service, and create problems of recognizing the product and possible 
improper return.'' The Postal Service disagrees. The majority of ISAL 
volume is currently deposited at ISC facilities. The amounts mailed at 
post offices is so small compared with total mail volume that it could 
not possibly overload the Postal Service's transportation system. In 
addition, since all ISAL will be labeled to the ISC for handling, there 
is no reason to believe that this mail will be mishandled in the 
domestic network or that there will be any overall impact on service.

Volume Discount

    The Postal Service proposed to institute volume discounts for large 
users of ISAL. The size of the discount would be based on the amount of 
postage paid during the previous postal fiscal year. Mailers would 
receive a discount of five percent if they paid $2 million in ISAL 
postage in a year, a discount of 10 percent if they paid $5 million in 
ISAL postage, and a discount of 15 percent if they paid $10 million or 
more in ISAL postage. Three comments expressed complete support for the 
discounts. One comment criticized the larger discounts as excessive, 
and suggested that the maximum discount be seven percent. One comment 
criticized the discounts because they were based on ISAL postage alone. 
This comment suggested that ISAL, International Priority Airmail (IPA), 
and Valuepost Canada services were alternative services that met 
similar, although different service needs and that postage paid for 
both should be

[[Page 3644]]

considered in qualifying for ISAL discounts. One comment criticized the 
discounts as violating the rate setting provisions of the Postal 
Reorganization Act. This comment argued that the discounts were rate 
reductions for large mailers which, in the case of consolidators, would 
make it difficult for smaller companies to compete. This comment also 
argued that there is no reason to give discounts on the basis of the 
previous year's volume. There was no reason to reward customers on the 
basis of how much ISAL postage was paid last fiscal year when the terms 
and conditions for mailing were different. There is no clear 
relationship between the amount of postage paid and the amount of 
contribution to institutional costs. That there is no reason to reward 
large customers who use both ISAL and remail, and that the rate 
differential between customers which qualify for no discounts and which 
choose not to take advantage of the International Service Center drop 
shipment rates is appropriate.
    After considering all of the comments, the Postal Service has 
concluded that the discounts should be adopted as proposed considering 
ISAL and IPA mail to be included in the qualifying volume mail for ISAL 
discounts. International mail delivery is a competitive market. The 
Private Express Statutes, which generally limit competition with the 
Postal Service for the carriage of letters, have been suspended to 
allow international remail (39 CFR 320.8). The Postal Service, the 
postal administrations of other countries (e.g. the Netherlands and the 
United Kingdom), and private sector concerns all compete for the 
carriage of letters and other mailable matter. The international mail 
market is also one in which consolidators, which take international 
mail from many smaller mailers and merge it so as to take advantage of 
lower rates, are a significant factor in which delivery agent will 
handle the mail. Competitors of the Postal Service offer discounts to 
consolidators and large mailers; if the Postal Service does not act 
competitively, it will lose business to them.
    The Postal Service is required to charge rates that apportion costs 
on a fair and equitable basis (39 U.S.C. Sec. 101(d)), that are fair 
and reasonable, 39 U.S.C. Sec. 403(a), and that do not make any undue 
or unreasonable discrimination or grant any undue or unreasonable 
preference, 39 U.S.C. Sec. 403(c). What is fair, reasonable, and not 
unduly discriminatory or preferential is largely a question of fact in 
which all circumstances must be taken into account, including the 
reality of a competitive marketplace. At a minimum, similarly situated 
mailers must receive the same or comparable treatment and pay the same 
rates. However, as stated by the Court of Appeals in upholding the 
Postal Service's authority to negotiate rates and services with large 
mailers, ``the reasons that may compel a uniform rate of postage in the 
United States no longer apply to large-volume international mailers'' 
(UPS Worldwide Forwarding, Inc. v. U.S. Postal Service, 66 F.3d 621, 
637-38 (3d Cir. 1995). Published volume discounts are another way to 
compete for large-volume international mailers, and a way to compete 
that involves greater certainty and less administrative effort than 
negotiating rates and services with them. Moreover, published volume 
discounts ensure that similarly situated mailers (i.e., mailers of like 
quantities of similar mail) pay the same rates.
    Increasing discounts based on increased usage does not make rates 
unfair, unreasonable, unduly discriminatory, or preferential. In 
general, the more a mailer mails the greater the number of full direct 
sacks that will be prepared, thereby reducing Postal Service handling 
costs. Moreover, the larger a mailer, the more aggressively competitors 
such as the postal services of the Netherlands and the United Kingdom 
will bid for their business. Although the Postal Service does not have 
definite knowledge of what rates these competitors offer at any given 
time since they are under no legal obligation to disclose rates or the 
customers to which those rates are offered, it is known that they offer 
significant discounts to large mailers. Unless the Postal Service 
prices its services competitively by offering discounts, it will lose 
the business of large mailers.
    Basing discounts on the amount of postage paid in the previous year 
is not unfair, unreasonable, unduly discriminatory, or preferential. 
Experience shows that while mail volumes may fluctuate from year to 
year, past usage is generally a good indicator of present and future 
usage. Moreover, mailers need certainty to plan their budgets, set 
their prices, and otherwise conduct their businesses. Basing rates on 
past usage gives mailers that certainty, since they know how much they 
are mailing and can reasonably foresee which level of discount they 
will qualify for the next year. It is fair, reasonable, and not unduly 
discriminatory to base discounts on volumes that are highly likely to 
predict usage and which also make sense to customers in conducting 
their own businesses.
    Differences in rates between what a smaller mailer pays to mail 
ISAL at any bulk mail acceptance unit and what a large mailer pays to 
mail at an International Service Center (ISC) with the maximum 
discounts are not unduly discriminatory because the large and small 
mailers are not situated similarly. The mail posted by the smaller 
mailer requires more handling and domestic transportation than the mail 
posted by the larger mailer, thereby increasing the Postal Service's 
cost. Moreover, there is more intense competition for the larger 
mailer's business. This is a competitive market, if the smaller mailers 
believe that rates are too high, then they have the option of using 
another service provider or a consolidator who can qualify for rate 
discounts. Ultimately, the market will determine which rates both the 
large and the small mailer will pay, whether it is to the Postal 
Service or to a competitor.
    The Postal Service does not believe that volume discounts will 
affect competition between large and small consolidators. This is a 
competitive market in which significant discounts are already being 
offered to large consolidators by other providers. They already have, 
or can have, an advantage in the rates they pay for the mail they send. 
Whether discounts are offered, or not offered, by the Postal Service 
will not change that.
    The Postal Service has concluded that the size of the discounts 
should not be reduced. As stated above, the Postal Service does not 
have definite knowledge of the rates being offered by the competitors. 
It appears, however, that the proposed discounts as proposed are 
necessary to hold the business it now has.
    Several commenters requested clarification for the basis of the 
discount or requested that revenue for other products be included for 
determining the discounts. The Postal Service will count ISAL and IPA 
revenue to qualify for the volume discounts. If a permit holder has 
more than one account and/or in several cities, these revenues may be 
combined. Agents who prepare mail for the owner of the mail and tender 
it under the owner's permit during postal fiscal year 1997 will only be 
counted for a discount during postal fiscal year 1998. Agents must be 
prepared to submit postage statements that reflect their representation 
of the owners of the mail between September 14, 1996 through and 
September 12, 1997 to be included for discounts in postal fiscal year 
1998 (September 13, 1997 through September 11, 1998). Each year after,

[[Page 3645]]

the level of discount will be determined only by the postage paid by 
the permit holder.
    To qualify for volume discounts, mailers must apply to the Manager, 
Mail-order, International Business Unit, 475 L'Enfant Plaza, SW, Room 
370-IBU, Washington, DC 20260-6500. The Manager will evaluate all 
requests and inform the mailer and the post office(s) of mailing 
whether discounts are approved and the level of discount. The Manager, 
Mail-order will inform all applicants of the total qualifying revenue 
and the size of their discount within 30 days of receiving the 
application. Mailers may appeal this determination of the Manager of 
Mail-order by providing the necessary documentation supporting the 
discount for the initial postal fiscal year 1998. The Manager of Mail-
order will make a final determination on the appeal of the discount 
level within 5 business days from receipt of the appeal letter. IMM 
246.715, is added to describe how mailers can qualify for volume 
discounts.

Direct Shipment Rates

    The Postal Service proposed that direct shipment rates continue to 
be available for mailers tendering 750 pounds or more to one country at 
any office from which the Postal Service can obtain direct 
transportation to the destination country. A new rate schedule has been 
developed for this service to reflect current costs.
    One commenter agreed with having separate direct shipment but 
stated that the $0.25 per pound rate difference might be too low. 
Another commenter favored the current rate structure of having the same 
rates for Gateway (Dropship ISC) and Direct Shipment, at least in major 
markets, arguing that by having to pay a higher rate, the value of drop 
shipment option would be greatly decreased.
    The cost of providing Direct Shipment service is higher than the 
cost of providing service from ISCs. The mailer also avoids having to 
transport mail to an ISC. The price difference of $0.25 per pound 
reflects the Postal Service's additional cost for providing Direct 
Shipment service.

Price Adjustments

    Five commenters noted the general size of the rate increase. 
Depending on the method of analysis, the destination rate group, and 
the origin of the mail, commenters found that the rates applicable to 
these mailings might increase substantially (anywhere from 10 to 50 
percent). One of the commenters stated that the Dropship ISC and volume 
rates were very good, but that the increase for the Western Hemisphere 
was excessive and suggested a separate rate group for Mexico. Several 
commenters suggested that some of the proposed rates would not be 
competitive with other alternatives.
    The Postal Service has carefully reviewed the proposed rate 
structure to ensure that the proposed not only meets the requirements 
of postal rate making, but also offers the most competitive and 
economical rates possible. Changes in the rates reflect the need to 
cover costs, make a contribution to the institutional costs of the 
Postal Service, and exhibit the effects of customer worksharing and 
competitiveness. Based on these comments and criteria, the Postal 
Service has decided to reduce the proposed rates of Rate Group 2, South 
America, by 10 cents a pound. IMM 246.71 is revised to reflect this 
change. The comment suggesting a specific country rate to Mexico raises 
an interesting idea. However, the Postal Service needs sufficient time 
to evaluate the impact of this concept on ISAL mailers. It also needs 
sufficient time to conduct such a review without delaying 
implementation of the new ISAL rates in which all ISAL mailers benefit. 
The Postal Service will continue to study this concept. The analysis 
period will be at least 6 months.

Labeling Requirements

    One commenter questioned the need for the mailer to use two sack 
labels (one label and Tag 155). The commenter stated that such 
preparation is cost prohibitive and suggested using palletized mail 
preparation. The commenter also suggested that mail for rate groups 1 
and 4 be combined because both groups are labeled to the same dispatch 
point.
    One of the main benefits of ISAL is that it allows the mailer to 
prepare mail to the finest point possible and avoid the cost of the 
Postal Service handling the mail. It is therefore necessary for the 
mailer to prepare sack labels and tags. In addition, under certain 
circumstances, the Postal Service accepts ISAL on pallets. This 
significantly reduces preparing large mailings to a single country 
destination.

Corrections

    There were several errors in the original text of IMM part 246, 
published in 62 FR 47394-47399.
    1. Exhibit 246.71, Footnote 3, is corrected to show the delivery 
zones for Osaka, Japan as 52-93.
    2. In IMM 246.941, the maximum weight of a package is changed from 
20 pounds to 11 pounds.
    3. In section 246.943.a.1, Exhibit A is changed to Exhibit 246.71 
and the information for Osaka is corrected to read: Osaka OSA (for 
postal codes 52-93).
    4. Section 246.2 is changed to reflect that residual mail cannot 
exceed 10 percent of the combined weight of qualifying mail (consisting 
of Direct Country Sacks, M-Bags, Direct Country Package Sacks).

Conclusion

    Accordingly, the Postal Service adopts the following amendments to 
the International Mail Manual, which is incorporated by reference in 
the Code of Federal Regulations. See 39 CFR 20.1.

List of Subjects in 39 CFR Part 20

    Foreign relations, Incorporation by reference, International postal 
services.

PART 20--[AMENDED]

    1. The authority citation for 39 CFR part 20 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 407, 408.

    2. The IMM is amended to incorporate part 246, International 
Surface Air Lift Service, as follows:

246  International Surface Air Lift (ISAL) Service 246.1 Definition

    International Surface Air Lift (ISAL) is a bulk mailing system that 
provides fast, economical international delivery of publications, 
advertising mail, catalogs, directories, books, other printed matter, 
and small packets. The cost is lower than airmail and the service is 
much faster than surface mail. ISAL shipments are flown to the foreign 
destinations and entered into that country's surface or non-priority 
mail system for delivery.

246.2  Qualifying Mail and Minimum Quantity Requirements

    Only printed matter as defined in 241 and small packets as defined 
in 260 that meet all applicable mailing standards may be sent in this 
service. There is a minimum volume requirement of 50 pounds per mailing 
except for the Direct Shipment option, which requires a minimum 750 
pounds to a single country destination. Small packets may not be 
enclosed in M-bags and do not qualify for the Full Service, Direct 
Shipment, or Dropship ISC M-bag rates. Mail is prepared as (1) direct 
country sacks when there are 11 pounds or more to a single country or 
required country separation; (2) mixed country package sacks when there 
are 10 or more pieces

[[Page 3646]]

or at least 1 pound of mail to a single country, but less than 11 
pounds; and (3) residual mail when there are fewer than 10 pieces or 
less than 1 pound of mail to a single country. Residual mail may not 
exceed 10 percent, by weight, of the mail presented in direct country 
sacks, M-Bags, and mixed country package sacks. Qualifying residual 
mail is subject to the appropriate ISAL rate (Full Service, Direct 
Shipment, M-Bag, or Dropship ISC).

    Note: A package is defined as 10 or more pieces of mail to the 
same country separation or 1 pound or more regardless of the number 
of pieces. Packages of letter-size pieces of mail should be no 
thicker than approximately a handful of mail (4 to 6 inches). 
Packages of flat size mail may be thicker than 6 inches but must not 
weigh more than 11 pounds.

246.3  Service Options 246.31 Availability

    ISAL service is available to the foreign countries listed in 
exhibit 246.71 from all post offices where bulk mail is accepted and 
from the Dropship ISCs listed in 246.32.

246.32  Dropship ISAL International Service Centers

    ISAL deposited at the following Dropship ISAL ISCs qualify for the 
Dropship ISC rates shown in 246.71:

AMC JFK BLDG 250, JFK International Airport, Jamaica, NY 11430-9998
San Francisco P&DC, 1300 Evans Ave, San Francisco, CA 94188
AMC San Francisco,* BLDG 660 Rd 6, San Francisco CA 94158-9998
Miami P&DC, 2200 NW 72 Ave, Miami FL 33152
AMC Miami,* Miami International Airport, Miami FL 33159-9998
Chicago O'Hare Dropship ISAL Service Center, International Processing 
Center Annex, 3333 N. Mount Prospect RD, Franklin Park IL 60131

246.4  Special Services

    The special services described in Chapter 3 are not available for 
items sent by ISAL.

246.5  Customs Documentation

    See 244.6 and 264.5 for the requirements for customs forms.

246.6  Permits

    Mailers depositing mail at a Dropship ISC must maintain an advance 
deposit account at that city if postage is paid by advance deposit 
account.

246.7  Postage

246.71  Rates

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                                                               Full service per lb.           Direct shipment per lb.          Dropship ISC per lb.     
               Rate group                    Per piece   -----------------------------------------------------------------------------------------------
                                                              Regular         M-bag*          Regular         M-bag*          Regular         M-bag*    
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.......................................            $.25           $3.10           $2.50           $2.35           $1.75           $2.10           $1.50
2.......................................             .10            4.00            2.60            3.25            1.85            3.00            1.60
3.......................................             .10            3.95            3.00            3.20            2.25            2.95            2.00
4.......................................             .10            6.25            4.25            5.50            3.50            5.25            3.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
See exhibit 246.71 for network countries and individual rates.                                                                                          
                                                                                                                                                        
* Small packets may not be mailed at these rates.                                                                                                       

246.711  Full Service Rates

    ISAL mailings presented at any post office that accepts bulk mail, 
other than a Dropship ISC listed in 246.32, and not eligible for the 
direct shipment rate and are paid at the full-service rates. Postage 
for regular ISAL is paid on a per-piece and a per-pound basis. M-bags 
are subject to the M-bag pound rate only. Small packets are not 
eligible for the M-bag rates and may not be included in M-bags.

246.712  Direct Shipment Rates

    Mailers are eligible for the direct shipment rates from the 
acceptance post office (except Dropship ISCs) when the Postal Service 
is able to arrange direct transportation from the origin office to the 
destination country. To qualify, mailers must present a minimum of 750 
pounds to each destination country. Mailers must contact the post 
office of mailing at least 14 days before the first desired mailing 
date. A postal employee must complete PS Form 3655, International 
Surface Airlift (ISAL) Direct Shipment Option Advisement and 
Confirmation of Transactions, and fax it to the distribution network 
office (DNO) to obtain a contract for transportation. If the DNO cannot 
arrange direct transportation, the direct shipment rate does not apply. 
The Postal Service may cancel direct shipment rates and service when 
direct transportation is no longer available.
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    *Plant verified mail is transported to these facilities by the 
mailer.
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246.713  Dropship ISC Rates

    ISAL mailings transported by the mailer to the Dropship ISCs listed 
in 246.32 are eligible for the Dropship ISC rate.

246.714  Volume Discount

    Mailers who spend $2 million or more combined on ISAL and IPA in 
the preceding postal fiscal year may receive discounts off the rates 
shown in 246.71:

    a. over $2 million to $5 million: 5 percent discount
    b. over $5 million to $10 million: 10 percent discount
    c. over $10 million: 15 percent discount

    Mailers entitled to these discounts must place the full per-piece 
rate on each piece of mail if payment is by postage meter or mailer-
precanceled stamps. The discount is calculated on the postage 
statement.

246.715  Qualifying for Volume Discounts

    To qualify for volume discounts, mailers must apply in writing to 
the Manager, Mail-order, International Business Unit, 475 L'Enfant 
Plaza, SW, Room 370-IBU, Washington, DC 20260-6500. The Manager 
evaluates all requests and informs the mailer and the post office(s) of 
mailing whether discounts are approved and the level of discount. 
Mailers must supply the following information:

    The postal fiscal year for the qualifying mail.
    The permit number(s) and post office(s) where the permits are held.
    The total revenue for the postal fiscal year.
    The post office(s) where the discount is to be claimed.

    The combined ISAL and IPA revenue is counted toward the discounts. 
The Postal Service will count as revenue to qualify for the volume 
discounts postage paid by only a permit holder. If a permit holder has 
more than one account, or accounts in several cities, then these 
revenues may be combined to qualify for discounts. Agents who prepare 
mail for the owner of the mail and mail paid by the owner's permit may 
not include

[[Page 3647]]

in the revenue to qualify for the discounts, except for the initial 
year (Postal Fiscal Year 1997, which is September 14, 1996 through 
September 12, 1997).
    Customers may be required to substantiate their request by 
providing copies of all mailing statements for the appropriate postal 
fiscal year. All decisions of the Manager, Mail-order are final. A new 
section (246.715) is added to describe how mailers can qualify for 
volume discounts.

246.72  Payment Methods

246.721  Postage Meter, Permit Imprint, or Precanceled Stamps

    Postage must be paid by postage meter, permit imprint, or mailer-
precanceled stamps. Postage is computed on Form 3650, Postage 
Statement--International Surface Air Lift. Form 3650 is required for 
all ISAL mailings.

246.722  Piece Rate

    The applicable per piece postage must be affixed to each piece 
(except M-bags. See 246.723) by meter or mailer-precanceled stamps, 
unless postage is paid by permit imprint. Mailers may use a permit 
imprint only with identical weight pieces unless authorized under the 
postage mailing systems in DMM P710, P720, or P730. All of the permit 
imprints for printed matter shown in exhibit 152.3 are acceptable.

246.723  Pound Rate

    Postage for the pound rate portion must be paid either by meter 
stamp(s) attached to the finance copy of the postage statement or from 
the mailer's advance deposit account.

246.8  Weight and Size Limits

    Any item sent by ISAL must conform to the weight and size limits 
for the types of printed matter described in 243 or for small packets 
in 263.

246.9  Preparation Requirements

246.91  Addressing

    See 122.

246.92  Marking

    Items must be endorsed with the appropriate markings as shown in 
244.2 for printed matter and in 264.2 for small packets. For 
publishers' periodicals (Periodicals Mail), the imprint authorized 
under 244.211c(2) or 244.211c(3) may be used in place of the ``PRINTED 
MATTER--PERIODICALS'' endorsement. Individual items paid by meter 
postage or mailer-precanceled stamps must be endorsed ``International 
Surface Air Lift'' or ``ISAL.''

246.93  Sealing and Packaging

    Printed matter must be prepared to protect the contents and permit 
easy inspection. If not contained in envelopes or wrappers, folded 
items must have the open edges secured by tape, tabs, or wafer seals of 
sufficient quantity and strength to keep the items from opening during 
postal handling.

246.94  Makeup Requirements for ISAL

246.941  Packaging the Following Guidelines Apply

    a. General: All ISAL mail must be prepared in packages within sacks 
as appropriate. A package is defined as 10 or more pieces of mail to 
the same country or separation or 1 pound or more regardless of the 
number of pieces. Packages of letter-size mail pieces should be no 
thicker than approximately a handful of mail (4-6 inches). Packages of 
flat size mail may be thicker than 6 inches but must not weigh more 
than 11 pounds. Packages and sacks must be prepared and labeled as 
described below. All mail pieces in a package must be ``faced'' in the 
same direction (i.e., arranged so that the addresses read in the same 
direction, with an address visible on the top piece). Pieces that 
cannot be bundled because of their physical characteristics may be 
placed loose in the sack.
    b. Thickness Packages of letter-size mail should be no thicker than 
approximately a handful of mail (4 to 6 inches). Packages of flat-size 
mail may be thicker than 6 inches but must not weigh more than 11 
pounds. Each package must be securely tied. Placing rubber bands around 
the length and then the girth is the preferred method of securing 
packages of letter-size mail. Plastic strapping placed around the 
length and then the girth is the preferred method of securing packages 
of flat-size mail.
    a. Direct Country Packages. When there are 10 or more pieces or 1 
pound or more to the same country, then such pieces must be prepared as 
a direct country package. If there is less than 11 pounds of mail to 
the same country, then the direct country package must be labeled with 
a facing slip showing the destination country or country separation. 
The facing slip must be placed on the address side of the top piece of 
each package in such a manner that it will not become separated from 
the package. The pressure-sensitive labels and optional endorsement 
lines used domestically for presort mail are prohibited for 
International Surface Airlift Mail.
    b. Residual Packages. If there is not enough mail to prepare a 
direct country package (fewer than 10 pieces or less than 1 pound), the 
mail is considered residual mail. When there are fewer than 10 pieces 
to the same country, then such pieces should be combined in packages 
with other mail for countries within the same rate group that similarly 
have fewer than 10 pieces. Such mixed country packages must be labeled 
with a facing slip marked ``Residual, Rate Group ____. The designated 
rate group (#1, #2, #3, or #4) must be inserted as appropriate. The 
facing slip must be placed on the address side of the top piece of each 
package in such a manner that it will not become separated from the 
package. The pressure-sensitive labels and optional endorsement lines 
used domestically for presort mail are prohibited for International 
Surface Airlift Mail.

(Exception: The 10 piece criterion is when there are fewer than 10 
pieces to the same country which weigh more than 11 pounds. Such mail 
pieces should be packaged together as a direct country package and 
placed in a direct country sack. Pieces that cannot be packaged because 
of their physical characteristics may be placed loose in the sack.)

946.942  Sacking

    Once packages of ISAL mail are prepared, the packages are then 
placed into one of three types of designated sacks:
    a. Direct Country Sack. Prepare a direct country sack if there are 
at least 11 pounds of mail to the same country. The mail must be 
packaged and enclosed in a gray plastic ISAL sack and labeled to the 
country with Tag 155, Surface Airlift Mail. The maximum weight of a 
direct country sack must not exceed 66 pounds.
    b. Mixed Country Package Sack. Prepare a mixed country package sack 
for those direct country packages where there is less than 11 pounds of 
mail to the same country. The mail must be packaged as direct country 
packages, identified with a facing slip showing the destination country 
or country separation, and enclosed in a green pouch labeled to the 
dropship ISAL service center. Tag 155, also must be attached to the 
sack. Prepare a mixed country package sack for each of the respective 
rate groups for which there is a direct country package and label as 
follows:

Rate group 1--AMC Kennedy--JFK 003
Rate group 2--AMC Miami 33159
Rate group 3--AMC San Francisco 941

[[Page 3648]]

Rate group 4--AMC Kennedy--JFK 003

    c. Residual Sack. Prepare a residual sack for those packages of 
mail that contain fewer than 10 pieces or less than 1 pound of mail to 
any one country (residual packages). The mail must be packaged as 
residual packages, appropriately identified with a facing slip, and 
enclosed in a green pouch labeled to the dropship ISAL service center. 
Tag 155 also must be attached to the sack. The mailer must prepare a 
residual sack for each of the respective rate groups for which there is 
a residual package and label it as follows:

Rate group 1--AMC Kennedy--JFK 003
Rate group 2--AMC Miami 33159
Rate group 3--AMC San Francisco 941
Rate group 4--AMC Kennedy--JFK 003

246.943  Sack Labeling

    Depending on the type of sack, labels are prepared as follows:
    a. Direct Country Sack. For a direct country sack, use a gray 
plastic ISAL sack. Use Tag 155 to label each sack with the destination 
country's name. Mailers must complete four blocks on Tag 155:
    1. To (Pour) Block: enter the name of the ISAL country foreign 
exchange office, its three-letter exchange office code, and the 
country's name. See Exhibit 246.71 for the name of the foreign exchange 
office and its three-letter exchange office code. As an example, for 
Ireland, this block will be as follows:

    Dublin      DUB      Ireland

    2. Customer Permit No. Block: Enter permit number.
    3. Kg. Block: Enter the combined weight of the sack and its 
contents in kilograms (1 pound = 0.4536 kilogram).
    4. Date Block: Enter date as shown on PS Form 3650, Postage 
Statement--International Surface Air Lift.
    After completing the above items on Tag 155, attach it to the neck 
of the sack.
    b. Mixed Country Package Sack. For a mixed country package sack, 
use a domestic green nylon pouch and label it to the appropriate 
dropship ISAL service center as follows:
    Rate group 1--AMC Kennedy--JFK 003
    Rate group 2--AMC Miami 33159
    Rate group 3--AMC San Francisco 941
    Rate group 4--AMC Kennedy--JFK 003
    Labels are prepared as follows:
    Content:

    Line 1: Dropship ISAL
    Service Center
    Line 2: ISAL DRX
    Line 3: Mailer, Mailer
    Location

  Example:

AMC KENNEDY--JFK
003
ISAL DRX
ABC COMPANY, NEW YORK, NY

    For the mixed country package sack label, use Content 
Identification Number (CIN) 753.
    In addition, use Tag 155 to label each sack with the appropriate 
drop ship ISAL service center. Mailers must complete four blocks on Tag 
155:
    1. To (Pour) Block: enter the name of the dropship ISAL service 
center and rate group:

AMC Kennedy--JFK 003
Rate Group 1

AMC Miami 33159
Rate Group 2

AMC San Francisco 941
Rate Group 3

AMC Kennedy--JFK 003
Rate Group 4

    2. Customer Permit No. Block: Enter your permit.
    3. Kg. Block: Enter the combined weight of the sack and its 
contents in kilograms. (1 pound = 0.4536 kilogram).
    4. Date Block: Enter date as shown on Form 3650.
    After completing the above items on Tag 155, attach it to the sack.
    c. Residual Sack. For a residual sack, use a domestic green nylon 
pouch and label it to the appropriate dropship ISAL service center as 
follows:

Rate group 1--AMC Kennedy--JFK 003
Rate group 2--AMC Miami 33159
Rate group 3--AMC San Francisco 941
Rate group 4--AMC Kennedy--JFK 003
    Labels are prepared as follows:
    Content:

    Line 1: Drop ship ISAL
    Service Center
    Line 2: ISAL WKG
    Line 3: Mailer, Mailer
    Location

  Example:

AMC KENNEDY--JFK
003
ISAL WKG
ABC COMPANY, NEW YORK, NY

    For the residual sack label, use CIN 754.
    In addition, use Tag 155 to label each sack with the appropriate 
dropship ISAL service center. Mailers must complete three blocks on Tag 
155:
    1. To (Pour) Block: Enter the name of the drop ship ISAL service 
center and rate group:

AMC Kennedy--JFK 003
Rate Group 1

AMC Miami 33159
Rate Group 2

AMC San Francisco 941
Rate Group 3

AMC Kennedy--JFK 003
Rate Group 4

    2. Customer Permit No. Block: Enter your 10-digit ISAL permit or 
customer identification number.
    3. Kg. Block: Enter the combined weight of the sack and its 
contents in kilograms. (1 pound = 0.4536 kilogram).
    4. Date Block: Enter date as shown on Form 3650.
    After completing the above items on Tag 155, attach it to the sack.

246.944  Sack Separation

    When presenting an ISAL shipment to the Postal Service, the mailer 
must physically separate the sacks of mail by type (direct, mixed, 
residual) and rate group (1, 2, 3, 4) at time of mailing.

246.945  Direct Sacks to One Addressee (M-bags) for ISAL

    M-bags may be sent in the ISAL service to all ISAL destination 
countries. Weight, makeup, sacking, and sorting requirements must 
conform to part 245. Tag 158 must show the complete address of the 
addressee and the sender. Tags 155 and 158 must be attached securely to 
the neck of each sack. M-bags may not contain small packets.

246.95 Mailer Notification

    Mailers who wish to mail shipments that weigh over 750 pounds but 
who are not eligible for direct shipment rates must notify the ISAL 
coordinator at the office of mailing at least 14 days before the 
planned date of mailing. Specific country information and weight per 
country must be provided. No prior notification is required for mailers 
with 750 pounds or less.

               Exhibit 246.71.--International Surface Air Lift Service Network Countries and Rates              
----------------------------------------------------------------------------------------------------------------
                Country                             City                         Code               Rate group  
----------------------------------------------------------------------------------------------------------------
Albania................................  Tirana....................  TIA                                       1
Algeria................................  Algiers...................  ALG                                       4
Angola.................................  Luanda....................  LAD                                       4

[[Page 3649]]

                                                                                                                
Argentina..............................  Buenos Aires..............  BUE                                       2
Aruba..................................  Oranjestad................  AUA                                       2
Australia..............................  Sydney....................  SYD                                       3
Austria................................  Vienna....................  VIE                                       1
Bahrain................................  Bahrain...................  BAH                                       4
Bangladesh.............................  Dhaka.....................  DAC                                       4
Belgium................................  Brussels..................  BRU                                       1
Belize.................................  Belize City...............  BZE                                       2
Benin..................................  Cotonou...................  COO                                       4
Bolivia................................  La Paz....................  LPB                                       2
Brazil.................................  Rio de Janeiro............  RIO                                       2
Bulgaria...............................  Sofia.....................  SOF                                       1
Burkina Faso...........................  Ouagadougou...............  OUA                                       4
Cameroon...............................  Douala....................  DLA                                       4
Central African Republic...............  Bangui....................  BGF                                       4
Chile..................................  Santiago..................  SCL                                       2
China..................................  Beijing (Peking)..........  PEK                                       3
Colombia...............................  Bogota....................  BOG                                       2
Congo, Dem. Rep. of (Zaire)............  Kinshasa..................  FIH                                       4
Costa Rica.............................  San Jose..................  SJO                                       2
Cote d'Ivoire (Ivory Coast)............  Abidjan...................  ABJ                                       4
Cuba...................................  Havana....................  HAV                                       2
Czech Republic.........................  Prague....................  PRG                                       1
Denmark................................  Copenhagen................  CPH                                       1
Dominican Republic.....................  Santo Domingo.............  SDQ                                       2
Ecuador................................  Guayaquil.................  GYE                                       2
Egypt..................................  Cairo.....................  CAI                                       4
El Salvador............................  San Salvador..............  SAL                                       2
Ethiopia...............................  Addis Ababa...............  ADD                                       4
Fiji...................................  Nadi......................  NAN                                       3
Finland................................  Helsinki..................  HEL                                       1
France.................................  Paris.....................  PAR                                       1
French Guiana..........................  Cayenne...................  CAY                                       2
Gabon..................................  Libreville................  LBV                                       4
Germany................................  Frankfurt.................  FRA                                       1
Ghana..................................  Accra.....................  ACC                                       4
Great Britain..........................  London....................  LON                                       1
Greece.................................  Athens....................  ATH                                       1
Guatemala..............................  Guatemala City............  GUA                                       2
Guyana.................................  Georgetown................  GEO                                       2
Haiti..................................  Port-au-Prince............  PAP                                       2
Honduras...............................  Tegucigalpa...............  TGU                                       2
Hong Kong..............................  Hong Kong.................  HKG                                       3
Hungary................................  Budapest..................  BUD                                       1
Iceland................................  Reykjavik.................  REK                                       1
India..................................  Mumbai....................  BOM                                       4
Indonesia..............................  Jakarta...................  JKT                                       3
Iran...................................  Tehran....................  THR                                       4
Ireland................................  Dublin....................  DUB                                       1
Israel.................................  Tel Aviv..................  TLV                                       4
Italy..................................  Rome......................  ROM                                       1
Jamaica................................  Kingston..................  KIN                                       2
Japan \1\..............................  Tokyo.....................  TYO                                       3
Japan \1\..............................  Osaka.....................  OSA                                       3
Jordan.................................  Amman.....................  AMM                                       4
Kenya..................................  Nairobi...................  NBO                                       4
Korea, Rep. of (South).................  Seoul.....................  SEL                                       3
Kuwait.................................  Kuwait City...............  KWI                                       4
Lebanon................................  Beirut....................  BEY                                       4
Liechtenstein..........................  Basel.....................  BSL                                       1
Luxembourg.............................  Luxembourg................  LUX                                       1
Madagascar.............................  Antananariva..............  TNR                                       4
Malaysia...............................  Kuala Lumpur..............  KUL                                       3
Mali...................................  Bamako....................  BKO                                       4
Mauritania.............................  Nouakchott................  NKC                                       4
Mauritius..............................  Port Louis................  MRU                                       4
Mexico.................................  Mexico City...............  MEX                                       2
Morocco................................  Casablanca................  CAS                                       4
Mozambique.............................  Maputo....................  MPM                                       4
Netherlands............................  Amsterdam.................  AMS                                       1
Netherlands Antilles...................  Curacao...................  CUR                                       2
New Zealand............................  Auckland..................  AKL                                       3

[[Page 3650]]

                                                                                                                
Nicaragua..............................  Managua...................  MGA                                       2
Niger..................................  Niamey....................  NIM                                       4
Nigeria................................  Lagos.....................  LOS                                       4
Norway.................................  Oslo......................  OSL                                       1
Oman...................................  Muscat....................  MCT                                       4
Pakistan...............................  Karachi...................  KHI                                       4
Panama.................................  Panama City...............  PTY                                       2
Papua New Guinea.......................  Port Moresby..............  POM                                       3
Paraguay...............................  Asuncion..................  ASU                                       2
Peru...................................  Lima......................  LIM                                       2
Philippines............................  Manila....................  MNL                                       3
Poland.................................  Warsaw....................  WAW                                       1
Portugal...............................  Lisbon....................  LIS                                       1
Qatar..................................  Doha......................  DOH                                       4
Reunion Island.........................  St Denis..................  RUN                                       4
Romania................................  Bucharest.................  BUH                                       1
Russia.................................  Moscow....................  MOW                                       1
San Marino.............................  Rome......................  ROM                                       1
Saudi Arabia...........................  Dhahran...................  DHA                                       4
Senegal................................  Dakar.....................  DKR                                       4
Singapore..............................  Singapore.................  SIN                                       3
South Africa...........................  Johannesburg..............  JNB                                       4
Spain \3\..............................  Madrid....................  MAD                                       1
Sri Lanka..............................  Colombo...................  CMB                                       4
Sudan..................................  Khartoum..................  KRT                                       4
Suriname...............................  Paramaribo................  PBM                                       2
Sweden.................................  Stockholm.................  STO                                       1
Switzerland............................  Basel.....................  BSL                                       1
Syria..................................  Damascus..................  DAM                                       4
Taiwan.................................  Taipei....................  TPE                                       3
Tanzania...............................  Dar es Salaam.............  DAR                                       4
Thailand...............................  Bangkok...................  BKK                                       3
Togo...................................  Lome......................  LFW                                       4
Trinidad and Tobago....................  Port of Spain.............  POS                                       2
Tunisia................................  Tunis.....................  TUN                                       4
Turkey.................................  Istanbul..................  IST                                       1
Uganda.................................  Kampala...................  KLA                                       4
United Arab Emirates...................  Dubai.....................  DXB                                       4
Uruguay................................  Montevideo................  MVD                                       2
Venezuela..............................  Caracas...................  CCS                                       2
Yemen..................................  Sanaa.....................  SAH                                       4
Zambia.................................  Ndola.....................  NLA                                       4
Zimbabwe...............................  Harare....................  HRE                                       4
----------------------------------------------------------------------------------------------------------------
Footnotes:                                                                                                      
\1\ To expedite service, Japan Post has requested that ISAL shipments to Japan be separated by two destinations 
  delivery zones as follows: Osaka (OSA) for postal codes 52-79, 91, and Tokyo (TYO) for all other postal codes.
\2\ Including the Canary Islands.                                                                               

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 98-1670 Filed 1-23-98; 8:45 am]
BILLING CODE 7710-12-P