[Federal Register Volume 64, Number 213 (Thursday, November 4, 1999)]
[Rules and Regulations]
[Pages 60106-60109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28650]


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POSTAL SERVICE

39 CFR Part 20


Priority Mail Global Guaranteed

AGENCY: Postal Service.

ACTION: Amendment to interim rule.

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SUMMARY: On April 19, 1999, the Postal Service announced in the Federal 
Register (62 FR 19039-19042) the introduction of Priority Mail Global 
Guaranteed on an interim basis and requested comment from the public. 
Comments were received until May 19, 1999. The Postal Service is 
amending the interim rule to increase the number of acceptance 
locations and destination countries and territories. All other 
conditions of service, including rates, remain the same. Additionally, 
the Postal Service is responding to the public comments.

EFFECTIVE DATE: November 1, 1999. Comments on the amendment to the 
interim rule must be received on or before December 6, 1999.

ADDRESSES: Written comments should be mailed or delivered to the 
Manager, International Finance, International Business, U.S. Postal 
Service, 475 L'Enfant Plaza SW, Room 370-IBU, Washington, DC 20260-
6500. Copies of all written comments will be available for public 
inspection between 9 a.m. and 4 p.m., Monday through Friday, in 
International Business, 10th Floor, 901 D Street SW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Walter J. Grandjean, (202) 314-7256.

SUPPLEMENTARY INFORMATION: On April 19, 1999, the Postal Service 
announced in the Federal Register (62 FR 19039-19042) the introduction 
of Priority Mail Global Guaranteed on an interim basis and requested 
comment from the public.
    The U.S. Postal Service, through an alliance with DHL Worldwide 
Express Inc., is offering an enhanced expedited service, Priority Mail 
Global Guaranteed, from selected locations in the United States to 
selected countries. This service offers day-certain delivery with 
postage refund guarantee and document reconstruction coverage of $100 
for allowable contents. Comments were requested by May 19, 1999.
    By that date the Postal Service received comments from one company, 
United Parcel Service (UPS), concerning the interim rule. UPS 
challenged the service in two areas. First, UPS argued that the Postal 
Service-DHL contract pursuant to which the service is provided appears 
to be an unauthorized transaction that is contrary to law. Second, UPS 
asserts that the rates for Priority Mail Global Guaranteed may be below 
cost, in violation of the Postal Reorganization Act.
    UPS states that the arrangement with DHL provides for the air 
transportation of mail. UPS asserts that this is a contract for air 
transportation services and that such a contract must comply with 39 
U.S.C. 5402, which requires that contracts be filed with the Secretary 
of Transportation, that contracts be for at least 750 pounds of mail 
per flight, and that mail transported under contract consist of not 
more than 5 percent letter mail by weight. UPS's premise for these 
comments, that there is a contract between the Postal Service and DHL 
for the transportation of PMGG, is not correct. No such contract has 
been made. PMGG items are tendered to DHL as an air carrier authorized 
to transport mail by its certificate of public convenience and 
necessity in the same manner as mail is tendered to other certificated 
air carriers. The rates of compensation for the international air 
transportation service performed by DHL are as prescribed by the 
Secretary of Transportation under section 41901(b). As there is no 
contract for air carriage, there is no basis for UPS's comments in this 
respect.
    UPS asserts that the rates for Priority Mail Global Guaranteed may 
be below

[[Page 60107]]

cost, in violation of the Postal Reorganization Act. The basis for this 
assertion is that the rates for Priority Mail Global Guaranteed are 
alleged to be as much as 65 percent lower than the published rates 
charged by courier companies for comparable services and lower than the 
rates charged by DHL for comparable service. UPS further asserts that 
the rates for other USPS delivery services are below cost, and that 
this also is grounds for suspecting that the rates for Priority Mail 
Global Guaranteed are below cost. UPS does not, however, provide any 
tangible evidence that the revenues from Priority Mail Global 
Guaranteed do not cover costs.
    In general, rates for postal services should cover costs over some 
relevant period of time. The rates for Priority Mail Global Guaranteed 
were designed to do that, based on the unique costs of that service. 
Nothing in UPS's comments provides any basis for changing the Postal 
Service's conclusion that the rates for Priority Mail Global Guaranteed 
cover its costs. The prices courier companies charge for their services 
are not probative evidence that rates for Priority Mail Global 
Guaranteed are non-compensatory, since courier prices are based on the 
costs incurred by those companies and on their perceptions of what 
their users are willing to pay for the service provided. Similarly, the 
prices charged by DHL for the services it provides by itself are not a 
reliable guide to what Priority Mail Global Guaranteed rates should be, 
nor do they provide any probative evidence that Priority Mail Global 
Guaranteed rates do not cover costs. The costs DHL incurs in its own 
services are not the same as the costs the Postal Service incurs in 
performing similar functions in providing Priority Mail Global 
Guaranteed. Finally, the allegation that the rates for some other 
Postal Service offerings do not produce revenues that cover costs does 
not provide any evidence that the rates for Priority Mail Global 
Guaranteed do not produce revenues that cover costs. The rates for each 
Postal Service offering are based on the costs incurred in providing 
that particular offering and that offering alone. In each case, Postal 
Service offerings are priced to produce revenues greater than costs, 
although in rare cases unforeseen circumstances or events can produce 
results that might not be as projected. In any event, UPS has provided 
no information that would cause the Postal Service to change its view 
that the rates developed for Priority Mail Global Guaranteed will 
produce revenues greater than costs.
    The Postal Service is not adopting a final rule at this time. The 
Postal Service is amending the interim rule to increase the number of 
metropolitan areas that can accept Priority Mail Global Guaranteed and 
the number of destinations to which it may be sent. This is an 
expansion of origins and destinations only, and all other conditions of 
service remain the same.
    Service will be available from the following ZIP Code areas:

------------------------------------------------------------------------
           Metropolitan area                         ZIP code
------------------------------------------------------------------------
Arizona: Phoenix.......................  850, 852-853.
California:
    Los Angeles, Oakland, San Francisco/ 900, 902-908, 910-918, 926-928,
     San Jose.                            937, 939-941, 943-944, 946,
                                          949-951, 954.
Colorado: Denver.......................  802.
Connecticut: Stamford..................  060-069.
Delaware: Wilmington...................  197-199.
District of Columbia...................  200, 202-203, 205.
Florida:
    Fort Lauderdale, Jacksonville,       320, 322, 327-338, 342, 346-
     Miami, Orlando, Tampa.               347.
Georgia: Atlanta.......................  300-303, 305-306, 311.
Illinois: Chicago......................  600-608, 610-611, 620, 622,
                                          629.
Indiana: Indianapolis..................  460-470, 472-475, 478-479.
Kentucky: Newport......................  410, 452.
Maine: Portland........................  039-041.
Maryland: Baltimore....................  206-212, 214, 217, 219.
Massachusetts: Boston..................  010-027.
Michigan:
    Detroit, Grand Rapids..............  481-482, 486-491, 493-497, 530-
                                          531.
Minnesota:
    Minneapolis, Saint Paul............  550-551, 553-554, 558-559.
Missouri: St. Louis....................  630-631, 633.
New Hampshire: Manchester..............  030-034, 038.
New Jersey:
    Jersey City, Newark................  070-085, 087-089.
New York:
    Flushing, New York City............  100-101, 103-105, 107, 109-119,
                                          124-127.
North Carolina:
    Charlotte, Greensboro, Raleigh.....  270-278, 280-282, 286.
Ohio:
    Akron, Cincinnati, Cleveland,        430-438, 440-458.
     Columbus, Dayton, Toledo,
     Youngstown.
Pennsylvania: Philadelphia.............  189-191, 193-196.
Rhode Island: Providence...............  028-029.
Tennessee: Nashville...................  372.
Texas:
    Dallas, Fort Worth, Houston,         750-752, 760-764, 769-770, 772-
     Lubbock, San Antonio.                778, 780-782, 784, 791, 794.
Virginia: Richmond.....................  201, 220-225, 230-232, 238-239.
Vermont: Burlington....................  054, 056.
Washington: Seattle....................  980-982.
Wisconsin: Milwaukee...................  530-532, 534.
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[[Page 60108]]

    Service will be available to the following countries and 
territories:

    Anguilla, Antigua and Barbuda, Aruba, Australia, Austria, 
Bahamas, Barbados, Belgium, Bermuda, British Virgin Islands, Canada, 
Cayman Islands, Denmark, Dominica, Dominican Republic, Finland, 
France (includes Monaco), Germany, Gibraltar, Great Britain and 
Northern Ireland (includes Guernsey and Jersey), Greece, Grenada, 
Guadeloupe (includes St. Barthelemey), Haiti, Hong Kong, Indonesia, 
Ireland, Italy, Jamaica, Korea, Republic of (South Korea), 
Liechtenstein, Luxembourg, Macao, Malaysia, Malta, Martinique, 
Mexico, Montserrat, Netherlands, Netherlands Antilles (includes 
Bonaire, Curacao, St. Eustatius, and St. Maarten), New Zealand, 
Norway, Philippines, Portugal, Saint Christopher (St. Kitts) and 
Nevis, Saint Lucia, Saint Vincent and the Grenadines, Singapore, 
Spain (includes Canary Islands), Sweden, Switzerland, Taiwan, 
Thailand, Trinidad and Tobago, Turks and Caicos Islands, and 
Vietnam.

    Although the Postal Service is exempted by 39 U.S.C. 410(a) from 
the advance notice requirements of the Administrative Procedure Act 
regarding proposed rulemaking (5 U.S.C. 553), the Postal Service 
invites public comment on the amendment to the interim rule at the 
above address.
    The Postal Service is amending International Mail Manual Chapter 2, 
Conditions for Mailing, which is incorporated by reference in the Code 
of Federal Regulations. See 39 CFR 20.1.
    A transmittal letter changing the relevant pages in the 
International Mail Manual will be published and automatically 
transmitted to all subscribers. Notice of issuance of the transmittal 
will be published in the Federal Register as provided by 39 CFR 20.3.

List of Subjects in 39 CFR Part 20

    Foreign relations, International postal service.

    The Postal Service adopts the following amendments to the 
International Mail Manual.

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, 404, 407, 408.

    2. Chapter 2 of the International Mail Manual is amended as 
follows:

2  Conditions for Mailing

* * * * *


210  Express Mail International Service

* * * * *


215  Priority Mail Global Guaranteed

* * * * *


215.3  Service Areas


215.31  Origins

    Priority Mail Global Guaranteed service is available only from the 
following ZIP Code areas:

------------------------------------------------------------------------
           Metropolitan area                         ZIP code
------------------------------------------------------------------------
Arizona: Phoenix.......................  850, 852-853.
California:
    Los Angeles, Oakland, San Francisco/ 900, 902-908, 910-918, 926-928,
     San Jose.                            937, 939-941, 943-944, 946,
                                          949-951, 954.
Colorado: Denver.......................  802.
Connecticut: Stamford..................  060-069.
Delaware: Wilmington...................  197-199.
District of Columbia...................  200, 202-203, 205.
Florida:
    Fort Lauderdale, Jacksonville,       320, 322, 327-338, 342, 346-
     Miami, Orlando, Tampa.               347.
Georgia: Atlanta.......................  300-303, 305-306, 311.
Illinois: Chicago......................  600-608, 610-611, 620, 622,
                                          629.
Indiana: Indianapolis..................  460-470, 472-475, 478-479.
Kentucky: Newport......................  410, 452.
Maine: Portland........................  039-041.
Maryland: Baltimore....................  206-212, 214, 217, 219.
Massachusetts: Boston..................  010-027.
Michigan: Detroit, Grand Rapids........  481-482, 486-491, 493-497, 530-
                                          531.
Minnesota:
    Minneapolis, Saint Paul............  550-551, 553-554, 558-559.
Missouri: St. Louis....................  630-631, 633.
New Hampshire: Manchester..............  030-034, 038.
New Jersey: Jersey City Newark           070-085, 087-089.
    Newark.............................
New York: Flushing, New York City......  100-101, 103-105, 107, 109-119,
                                          124-127.
North Carolina: Charlotte, Greensboro,   270-278, 280-282, 286.
 Raleigh.........................
Ohio:
    Akron, Cincinnati, Cleveland,        430-438, 440-458.
     Columbus, Dayton, Toledo,
     Youngstown.
Pennsylvania: Philadelphia.............  189-191, 193-196.
Rhode Island: Providence...............  028-029.
Tennessee: Nashville...................  372.
Texas:
    Dallas, Fort Worth, Houston,         750-752, 760-764, 769-770, 772-
     Lubbock, San Antonio.                778, 780-782, 784, 791, 794.
Virginia:                                201, 220-225, 230-232, 238-239.
 Richmond..............................
 ..........
Vermont: Burlington....................  054, 056.
Washington:                              980-982.
 Seattle...............................
 ........
Wisconsin:                               530-532, 534.
 Milwaukee.............................
 ...........
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[[Page 60109]]

215.32  Destinations

    Priority Mail Global Guaranteed service is available only to the 
following countries and territories:

Anguilla, Antigua and Barbuda, Aruba, Australia, Austria, Bahamas, 
Barbados, Belgium, Bermuda, British Virgin Islands, Canada, Cayman 
Islands, Denmark, Dominica, Dominican Republic, Finland, France 
(includes Monaco), Germany, Gibraltar, Great Britain and Northern 
Ireland (includes Guernsey and Jersey), Greece, Grenada, Guadeloupe 
(includes St. Barthelemey), Haiti, Hong Kong, Indonesia, Ireland, 
Italy, Jamaica, Korea, Republic of (South Korea), Liechtenstein, 
Luxembourg, Macao, Malaysia, Malta, Martinique, Mexico, Montserrat, 
Netherlands, Netherlands Antilles (includes Bonaire, Curacao, St. 
Eustatius, and St. Maarten), New Zealand, Norway, Philippines, 
Portugal, Saint Christopher (St. Kitts) and Nevis, Saint Lucia, 
Saint Vincent and the Grenadines, Singapore, Spain (includes Canary 
Islands), Sweden, Switzerland, Taiwan, Thailand, Trinidad and 
Tobago, Turks and Caicos Islands, and Vietnam.
* * * * *
Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 99-28650 Filed 11-3-99; 8:45 am]
BILLING CODE 7710-12-P