[Federal Register Volume 65, Number 159 (Wednesday, August 16, 2000)]
[Rules and Regulations]
[Pages 50054-50089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20324]



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Part II





Postal Service





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39 CFR Part 111



Domestic Mail Manual Changes for Sacking and Palletizing Periodicals 
Nonletters and Standard Mail (A) Flats, for Traying First-Class Flats, 
and for Labeling Pallets; Final Rule

  Federal Register / Vol. 65, No. 159 / Wednesday, August 16, 2000 / 
Rules and Regulations  

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POSTAL SERVICE

39 CFR Part 111


Domestic Mail Manual Changes for Sacking and Palletizing 
Periodicals Nonletters and Standard Mail (A) Flats, for Traying First-
Class Flats, and for Labeling Pallets

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule sets forth revised Domestic Mail Manual (DMM) 
standards adopted by the Postal Service for First-Class Mail (flat-size 
only), Standard Mail (A), and Periodicals. This final rule: requires 
for Periodicals and Standard Mail (A) that is prepared as trays, sacks, 
or packages on pallets, that carrier route sorted mail be placed on 
separate 5-digit pallets from 5-digit packages of automation rate and 
Presorted rate mail except as provided in added DMM M920, M930, or 
M940; revises pallet label standards and clarifies pallet preparation 
standards in DMM M045 for Periodicals, Standard Mail (A), and Standard 
Mail (B); adds DMM M910 which allows mailers of flat-size First-Class 
Mail, nonletter-size Periodicals, and flat-size Standard Mail (A) to 
combine packages of automation rate mail and packages of Presorted rate 
mail in the same sack or tray under certain conditions; adds DMM M920 
that allows mailers of nonletter-size Periodicals and flat-size 
Standard Mail (A) to combine carrier route packages, 5-digit automation 
rate packages, and 5-digit Presorted rate packages in the same sack 
(merged 5-digit scheme sack or merged 5-digit sack) or on the same 
pallet (merged 5-digit scheme pallet or merged 5-digit pallet) under 
certain conditions using the Carrier Route Indicators field in the City 
State Product, and adds DMM M930 and M940 that allows mailers of 
nonletter-size Periodicals and flat-size Standard Mail (A) to combine 
carrier route packages, 5-digit automation rate packages, and 5-digit 
Presorted rate packages on the same pallet (merged 5-digit scheme 
pallet or merged 5-digit pallet) under certain conditions using either 
a 5% threshold for 5-digit sorted mail (M930) or a combination of a 5% 
threshold for 5-digit sorted mail and the Carrier Route Indicators 
field in the City State Product (M940).

DATES: Effective Date: December 15, 2000.
    Implementation Date: It is anticipated that implementation of the 
rates resulting from the R2000-1 rate case will be sometime in early 
January 2001. Compliance with this rule will be required on the date 
that coincides with implementation of the rates resulting from the 
R2000-1 rate case, and notice of that implementation date will be 
published in the Federal Register. Until such notice is published, 
compliance with this rule is optional beginning on December 15, 2000.

FOR FURTHER INFORMATION CONTACT: Lynn Martin, (202) 268-6351, or Linda 
Kingsley, (202) 268-2252.

SUPPLEMENTARY INFORMATION: On February 29, 2000, the Postal Service 
published in the Federal Register (65 FR 10735) a proposal to (1) 
Require for Periodicals and Standard Mail (A) that carrier route sorted 
mail be placed on separate 5-digit pallets from 5-digit automation rate 
and Presorted rate mail, except as provided in new DMM M720; (2) revise 
pallet label standards and clarify pallet preparation standards in DMM 
M045 for Periodicals, Standard Mail (A), and Standard Mail (B); (3) add 
DMM M710 to allow mailers of First-Class Mail, Periodicals, and 
Standard Mail (A) to combine packages of automation rate mail and 
packages of Presorted rate mail in the same sack or tray if mailers can 
provide appropriate presort and rate documentation; (4) add DMM M720 to 
allow mailers of nonletter-size Periodicals and flat-size Standard Mail 
(A) to combine carrier route, automation rate, and Presorted rate 
packages that are part of the same mailing job in the same 5-digit 
carrier routes sack (a ``merged 5-digit'' sack) or on the same 5-digit 
pallet (a ``merged 5-digit'' pallet) for those 5-digit ZIP Codes where 
the Postal Service has identified that it performs carrier route 
incoming secondary sortation at the delivery unit; and (5) add in DMM 
M720 a provision for mailers of nonletter-size Periodicals and flat-
size Standard Mail (A) to prepare 5-digit sacks and pallets using both 
the ``merged'' sortation and labeling list L001 for scheme sortation. 
This proposal was amended on March 30, 2000 (65 FR 16859) to add a 5-
digit scheme carrier routes sack and pallet sortation level to the 
initial proposal. The deadline for submitting comments on the original 
proposal and the amendment was April 14, 2000.
    Part A below summarizes the major revisions made to the proposal in 
this final rule. Part B sets forth the evaluation of the comments 
received.

A. Summary of Revisions to the Proposed Rule

    Based on comments received in response to the proposed rule, the 
Postal Service is adopting the standards set forth in the proposed rule 
and the amendment to the proposed rule with the following changes.
    (1) DMM sections M700, M710 and M720 contained in the proposed rule 
have been renumbered as M900, M910 and M920 in this final rule for 
administrative reasons.
    (2) The requirement to use Presort Accuracy Validation and 
Evaluation (PAVE)-certified software when sorting under DMM M910 
(formerly M710) is revised to allow mailers to use either PAVE-
certified software or standardized documentation under DMM P012. (DMM 
M910 allows, under certain conditions, mailers of First-Class Mail, 
Periodicals, and Standard Mail (A) to co-tray or co-sack packages from 
automation rate mailings with packages from Presorted rate mailings.)
    (3) The Line 1 sack label instructions for Periodicals mixed ADC 
sacks under DMM M910 (proposed as M710) have been corrected to show 
that the sack must be labeled using DMM L803, or if entered at an ASF 
or BMC must be labeled using DMM L802 (the proposed rule erroneously 
showed this sack was labeled to the origin SCF).
    (4) The pallet sortation standards in DMM M045 and DMM M920 
(formerly M720) have been revised to encompass the sortation and 
labeling list changes published as a final rule in the May 19, 2000 
Federal Register (65 FR 31815), ``Preparation Changes for Palletized 
Standard Mail (A) and Bound Printed Matter and for Standard Mail (A) 
and Standard Mail (B) claimed at DBMC Rates,'' and according to the 
amendment to that final rule published in the Federal Register on 
August 8, 2000.
    (5) The pallet sortation standards for Periodicals in DMM M045 and 
the sacking and pallet provisions for Periodicals in DMM M920 (formerly 
M720) are revised to show that scheme sort using L001 will be required 
for Periodicals as set forth in the Federal Register final rule ``Sack 
Preparation Changes for Periodicals Nonletter-Size Pieces and 
Periodicals Prepared on Pallets'' that was published July 28, 2000 (65 
FR 46361).
    (6) A new provision for copalletizing carrier route packages, 5-
digit automation rate packages, and 5-digit Presorted rate packages on 
the same merged 5-digit or merged 5-digit scheme pallet is added as DMM 
M930. This new option will allow mailers to merge such packages on the 
same pallet using a 5% threshold per 5-digit ZIP Code area instead of 
the Carrier Route Indicators field in the City State Product. DMM M930 
also reflects the sortation and labeling list changes published as a 
final rule on May 19, 2000 (65 FR 31815), ``Preparation Changes for 
Palletized

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Standard Mail (A) and Bound Printed Matter and for Standard Mail (A) 
and Standard Mail (B) claimed at DBMC Rates,'' and according to the 
amendment to that final rule published in the Federal Register on 
August 8, 2000. DMM M930 also reflects the final rule ``Sack 
Preparation Changes for Periodicals Nonletter-Size Pieces and 
Periodicals Prepared on Pallets'' that was published July 28, 2000 (65 
FR 46361) that requires use of scheme sort (L001) for Periodicals.
    (7) A new provision for copalletizing carrier route packages, 5-
digit automation rate packages, and 5-digit Presorted rate packages on 
the same merged 5-digit or merged 5-digit scheme pallet is added as DMM 
M940. This new option will allow mailers to merge 5-digit packages with 
carrier route packages on the same merged 5-digit or merged 5-digit 
scheme pallet with no limit on the number of pieces in 5-digit packages 
for those 5-digit ZIP Codes that have an ``A'' or ``C'' indicator in 
the Carrier Route Indicators field in the City State Product. It will 
also allow mailers to merge 5-digit packages with carrier route 
packages on those two levels of pallet under the 5% threshold for 
pieces in 5-digit packages for those 5-digit ZIP Codes that have a 
``B'' or ``D'' indicator in the Carrier Route Indicators field in the 
City State Product. DMM M940 also reflects the sortation and labeling 
list changes published as a final rule on May 19, 2000 (65 FR 31815), 
``Preparation Changes for Palletized Standard Mail (A) and Bound 
Printed Matter and for Standard Mail (A) and Standard Mail (B) claimed 
at DBMC Rates,'' and according to the amendment to that final rule 
published in the Federal Register on August 8, 2000. DMM M940 also 
reflects the final rule ``Sack Preparation Changes for Periodicals 
Nonletter-Size Pieces and Periodicals Prepared on Pallets'' that was 
published July 28, 2000 (65 FR 46361) that requires use of scheme sort 
(L001) for Periodicals.
    (8) The requirement to show on 3-digit and SCF pallet labels the 
destination entry rate levels contained on those pallets is removed.
    (9) DMM E140.1.4 and E640.2.3 are amended to show the new location 
in the City State Product where information on the 5-digit ZIP Codes 
that are eligible for preparation at letter-size automation carrier 
route rates resides.
    (10) The first sentence of M041.5.2 is amended to clarify that the 
pallet sortation requirements apply to all palletized Standard Mail (B) 
and not only to Parcel Post mail.
    (11) The implementation date is revised. Based on mailer comments, 
the Postal Service has determined to implement both the required and 
optional provisions of this final rule on the same date that rates 
resulting from the R2000-1 rate case will be implemented. It is 
anticipated this will be a day in early January 2001. In order to 
provide a brief transition period for mailings prepared using these new 
preparation standards, mailers may prepare and enter mailings under the 
provisions of this final rule on an optional basis beginning December 
15, 2000. Mailers will not need to obtain an exception to the 
implementation date from the Rates and Classification Service Centers 
to enter mail prepared under the provisions of this final rule when 
entered into the mail on or after December 15, 2000.

B. Evaluation of Comments Received

a. General

    Fifteen comments were received. Five commenters indicated that they 
supported the proposed option to co-sack automation rate and Presorted 
rate packages. Two commenters indicated support for all of the changes 
in the proposed rule.

b. Required vs. Optional Use of Proposed DMM M910 and M920 Preparation

    Three commenters requested that the rules in DMM M910 permitting 
co-sacking of automation and Presorted rate packages be made mandatory 
and that the provisions in DMM M920 for preparing merged 5-digit sacks 
and pallets that contain carrier route, automation, and Presorted rate 
mail also be made mandatory.
    One commenter indicated that some software vendors will not support 
optional sortation methods. This commenter further stated that, if the 
software did incorporate the preparation methods as an option, there 
would be too many optional parameter settings for the software and it 
would become confusing and difficult to predict optimal mailing job 
parameters. Another commenter indicated that he believes major vendors 
eventually will provide the options, but will do so in a manner that 
requires the user to ``opt in'' to get the benefits.
    Two commenters requested that if it is not feasible to require 
these proposed preparation methods for all mailers, then mailers using 
PAVE-certified software should be required to use these options. One of 
these commenters requested that if the Postal Service cannot require 
users of PAVE-certified software to prepare mail under these new 
sortation methods now, that they be required to do so in the future.
    One commenter stated that at a minimum, PAVE-certified software 
vendors should make the use of these presort options the default method 
of preparation for its users.
    One commenter applauded the Postal Service for the concept of 
keeping the provisions of proposed DMM M910 and M920 optional for all 
mailers.
    This final rule provides that co-sacking or co-traying automation 
rate and Presorted rate packages under DMM M910 will become an optional 
sortation method on the date the rates resulting from the R2000-1 rate 
case are implemented (anticipated to be early January 2001). However, 
in view of the comments, the Postal Service plans to issue a separate 
Federal Register notice to propose that this method of sortation become 
required, rather than optional, for only Periodicals mail, on the date 
that the rates resulting from the R2000 rate case are implemented. The 
commenters proposing required use of these options were primarily from 
the Periodicals mailing industry. Furthermore, Periodicals mailers 
currently have available to them a similar option of co-sacking 
automation rate and Presorted rate packages within 3-digit, SCF, ADC, 
and mixed ADC sacks (DMM M820.1.9). The M910 option set forth in this 
final rule will replace the current provision in DMM M820.1.9 and is 
different from the current option for Periodicals in that the final 
rule allows co-sacking of automation rate and Presorted rate packages 
in 5-digit sacks as well as in 3-digit, SCF, ADC, and mixed ADC sacks. 
If the anticipated future proposal to require sortation under DMM M910 
for Periodicals nonletter-size mail is adopted, the Postal Service 
plans to study the impact of doing so. After such study, the Postal 
Service may in the future also propose to require use of the DMM M910 
preparation method with First-Class and Standard Mail (A) mailings.
    Because the standards for preparation of merged containers at the 
5-digit level set forth in DMM M920 are complex, use of PAVE-certified 
software will continue to be required for use of this option under this 
final rule. Because not all of our customers use PAVE-certified 
software, this method of preparation will remain optional for both 
Periodicals and Standard Mail (A).
    The Postal Service has determined, however, to require that the 
preparation options in DMM M910 and M920 be set as the default 
preparation methods for PAVE-certified software that supports

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these options. The next PAVE testing cycle will test whether software 
that supports the preparation options set forth in this final rule in 
DMM M910 and M920 are the default preparation settings for preparation 
of flat-size First-Class Mail (DMM M910 preparation only), nonletter-
size Periodicals mail, and flat-size Standard Mail (A).

c. Require Scheme Sortation Using DMM L001

    Three commenters believed that mailers should be required to use 
scheme sortation using DMM labeling list L001 because it makes 
operational sense. Two of these commenters believed that all mailers 
should be required to use this sortation option. One commenter stated 
that this is not an onerous requirement and that smaller or local 
mailers could perform this sort manually. One commenter stated that 
software should be used by all mailers.
    One commenter indicated that scheme sortation using DMM L001 should 
initially be required as a default setting for PAVE-certified software, 
and subsequently be required for all mailers that use PAVE-certified 
software.
    All of the commenters on this issue were from the Periodicals 
industry. The Postal Service published a separate proposed rule on May 
16, 2000 (65 FR 31118) to require scheme sortation using labeling list 
DMM L001 for all applicable Periodicals mailings. On July 28, 2000 the 
final rule ``Sack Preparation Changes for Periodicals Nonletter-Size 
Pieces and Periodicals Prepared on Pallets'' (65 FR 46361) was 
published in the Federal Register which requires using scheme sortation 
for nonletter-size Periodicals on the date the rates resulting from the 
R2000-1 rate case will be implemented. In addition, for Standard Mail 
(A) the Postal Service has determined that it will require scheme 
sortation (using DMM L001) to be a default setting for PAVE-certified 
software that supports the L001 scheme sortation option. The next PAVE 
testing cycle, will test to determine whether DMM L001 scheme sortation 
is a default preparation setting, where applicable, for preparation of 
Standard Mail (A) flats and, will test for Periodicals flats and 
irregular parcels that scheme sortation is a required preparation 
level.

d. Remove Requirement for PAVE-Certified Software for Proposed DMM M910 
and M920 Preparation

    Three commenters indicated they would like the requirement for 
PAVE-certified software removed from proposed DMM M910, which allows 
mailers to co-sack automation and Presort rate packages. These 
commenters pointed out that PAVE-certified software is not required for 
Periodicals mailers who currently may co-sack automation and Presorted 
rate packages at the 3-digit, SCF, ADC, and mixed ADC levels under 
current DMM M820.1.9. Only use of standardized documentation is 
required for use of this current option for Periodicals. Two commenters 
indicated that they believe use of standardized documentation should be 
sufficient. One commenter requested that, at a minimum, those preparing 
mail under current DMM M820.1.9 be allowed to add the ability to co-
sack automation and Presorted rate packages at the 5-digit sack level 
without using PAVE-certified software. Two commenters indicated that 
the Postal Service's plans to retrofit FSM 1000s with optical character 
readers (OCRs) make this change very feasible without a need for 
mandatory PAVE. One commenter pointed out that PAVE-certified software 
is not required for co-palletized mailings in which carrier route, 
automation, and Presorted rate packages may be placed on the same 
pallet. This commenter requested that sacks prepared under new DMM M910 
that are part of a co-palletized mailing job should not be required to 
be prepared with PAVE-certified software. One commenter was concerned 
that there will not be enough time for mailer-produced software to 
obtain PAVE-certification prior to the proposed implementation date for 
these rules, which means that some customers won't be able to use this 
option when it is implemented.
    One commenter requested that use of PAVE-certified software be 
removed as a requirement for both proposed DMM M910 and DMM M920. 
Another commenter believed the PAVE-certified software requirement 
should be removed for DMM M910 preparation, but should be retained for 
the ``merged'' sortation methods set forth in DMM M920.
    The Postal Service has determined to allow mailers the choice of 
using either PAVE-certified software or standardized documentation 
under DMM P012 to meet the requirements for sorting under the DMM M910 
co-traying or co-sacking options. However, because the standards for 
preparation of merged containers at the 5-digit level set forth in DMM 
M920 are complex, use of PAVE-certified software will continue to be 
required for use of this option, as well as for the two new options for 
this type of sorting in DMM M930 and M940, under this final rule.

e. Provide a ``Threshold'' Alternative To DMM M920 To Allow a Small 
Portion of 5-Digit Sorted Mail on Merged 5-Digit Pallets for All 5-
Digit ZIP Codes Without Regard to the Carrier Route Indicators Field

    Three commenters requested that the Postal Service allow a small 
portion of 5-digit automation rate and 5-digit Presorted rate packages 
to be combined with carrier route sorted mail on the same 5-digit 
pallet regardless of whether the Carrier Route Indicators field permits 
merging of such packages. All three commenters indicated that currently 
they suppress printing barcodes or otherwise do not claim automation 
rates for 5-digit packages that would otherwise be eligible for 
automation rates in order to be able to combine those 5-digit packages 
on the same 5-digit pallet as carrier route packages. (Currently, 
automation rate 5-digit packages must be placed on separate 5-digit 
pallets than carrier route rate and Presorted rate 5-digit packages.) 
These commenters indicated that there must be some point where it is 
more economical to allow some non-carrier route sorted mail on 5-digit 
pallets for manual distribution at delivery units as opposed to having 
those 5-digit packages processed on Small Parcel and Bundle Sorters 
(SPBSs) and FSMs at the plants.
    One commenter pointed out that by requiring 5-digit packages to be 
placed on 5-digit pallets that are separate from 5-digit pallets 
containing carrier route packages most likely will result in the 5-
digit packages being placed on a 3-digit or higher level pallet or in 
sacks. This commenter also questioned whether any cost savings realized 
by the Postal Service were adequate to override the risk to service for 
those 5-digit packages. When this commenter compared the 5-digit pallet 
destinations of his company's mailings against the preliminary 
information available for the new Carrier Route Indicators field in the 
City State Product, he determined that only a very small percentage of 
the 5-digit pallets currently prepared would be able to be prepared 
using merged sortation under DMM M920 (for six mailings that he 
analyzed, only 45 of 844 5-digit pallet destinations would have been 
eligible for the merged pallet sortation). This commenter suggested 
that the Postal Service establish a policy that would allow 5-digit 
packages to be combined with carrier route packages on 5-digit pallets 
whenever carrier route packages constitute 75% or more of a mailing 
job. An analysis performed by this commenter on his mailings showed 
that such a 75% carrier route per

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mailing threshold would in most cases result in 5-digit pallets that 
contain from 97% to 99.5% carrier route packages. This commenter 
indicates that a per-mailing threshold will be easier to administer 
than a per-pallet threshold.
    This commenter further indicated that most FSM 1000-size mail is 
not sorted to carrier route on the FSM 1000. Therefore, it would make 
sense for the Postal Service to always allow carrier route and 5-digit 
packages to be merged on 5-digit pallets when the pieces are FSM 1000-
sized.
    The Postal Service has determined to allow copalletization of 
carrier route packages and 5-digit packages on the same merged 5-digit 
or merged 5-digit scheme pallet using a threshold for the number of 
pieces in 5-digit packages that may be placed on such pallets. Two new 
sections have been added to the DMM to provide for such preparation.
    New DMM M930 has been added to the final rule to allow mailers to 
place 5-digit packages with carrier route packages on the same merged 
5-digit pallet or on the same merged 5-digit scheme pallet provided the 
number of pieces in 5-digit packages for any single 5-digit ZIP Code on 
any of the aforementioned pallets does not exceed 5% of the total 
number of pieces for the 5-digit ZIP Code on the pallet(s) for the 
presort destination. For example, if 3,500 pieces weighing 2,800 pounds 
are on two 5-digit pallets for ZIP Code 22033, up to 175 pieces (5% of 
3,500 pieces) prepared in 5-digit packages may be placed on either of 
the pallets. There are additional rules concerning the 5% threshold 
that are set forth in DMM M930.1.4 and M930.2.3, and additional 
documentation requirements in M930.1.1j and M930.2.1l. In a meeting of 
the Mailer's Technical Advisory Committee (MTAC) Presort Optimization 
subgroup, software vendors and mailers indicated that a threshold based 
upon individual 5-digit ZIP Codes was preferable to implementing a 
threshold based on the total number of pieces in a mailing job. This is 
because smaller mailers or newer publications may be able to qualify 
some pallets under a threshold based upon total mail to individual 5-
digit ZIP Codes, whereas they may not be able to qualify any pallets 
for such preparation under a threshold based on the total number of 
pieces in a mailing job.
    New DMM M940 also has been added to allow mailers to prepare merged 
5-digit and merged 5-digit scheme pallets using both the City State 
Product and the 5% threshold provisions. Under this new preparation 
method, mailers will be permitted to merge an unlimited number of 
pieces prepared in 5-digit packages with carrier route packages on 
merged 5-digit and merged 5-digit scheme pallets for those 5-digit ZIP 
Codes that have an ``A'' or ``C'' indicator in the Carrier Route 
Indicators field in the City State Product. For 5-digit ZIP Codes with 
``B'' or ``D'' indicators in the City State Product, mailers may place 
5-digit packages with carrier route packages on the same merged 5-digit 
pallet or on the same merged 5-digit scheme pallet when the number of 
pieces in 5-digit packages for any single 5-digit ZIP Code on any of 
the aforementioned pallets does not exceed 5% of the total number of 
pieces for the 5-digit ZIP Code on the pallet(s) for the presort 
destination (referred to as a ``logical'' pallet). There are additional 
rules concerning the 5% threshold in M940.1.4 and M940.2.3. There are 
also additional documentation requirements in M940.1.1k and M940.2.1k.
    FSM 1000 mail will be subject to the requirements of either 
proposed DMM M920 or of the new threshold options described above in 
DMM M930 or M940. At this time the Postal Service will not allow 
carrier route sorted packages and an unlimited number of pieces in 5-
digit sorted packages of FSM 1000-size mail to be placed on the same 
merged 5-digit or merged 5-digit scheme pallet. The Postal Service does 
not know at this time what the final machinability requirements will be 
for the new AFSM 100s. The Postal Service wants to reserve the decision 
as to where to process what is currently identified as FSM 1000-size 
mail. The AFSM 100 is expected to be able to process a portion of 
current FSM 1000-compatible pieces. An Engineering study is planned 
with results expected some time in early 2001. There are also concerns 
that mailers may be encouraged to prepare heavier pieces or pieces that 
otherwise require FSM 1000 processing if a rule allowing unlimited 
copalletization of carrier route and 5-digit sorted pieces were allowed 
for FSM 1000-sized pieces. The Postal Service plans to re-evaluate this 
decision concerning FSM 1000-sized pieces after the AFSM 100s are 
further deployed and their machinability requirements are determined.

f. The List of ZIP Codes Eligible for Merged Sortation Should Be a 
Separate Table in Electronic Form Rather Than Part of the City State 
Product

    One commenter indicated that all geographic information used for 
sortation should be in one place--in an electronic list. This commenter 
indicated that the National Customer Support Center (NCSC) in Memphis 
already distributes labeling list changes to customers and therefore 
keeping the labeling list information up-to-date in this manner should 
not be a problem. This commenter also indicated that there are quite a 
few mailing-related software programs that do not require use of the 
City State Product and that requiring mailers to use the City State 
Product for sortation is unnecessarily burdensome.
    Many PAVE-certified software vendors do incorporate a link to the 
City State Product in their presort software. Such a link is currently 
required to perform 5-digit scheme sorts for automation rate letters 
and to perform automation carrier route sortation for automation rate 
letters. Use of PAVE-certified software is a requirement for use of the 
options permitting merged sortation of carrier route and 5-digit sorted 
mail on 5-digit pallet levels. Also, in order to be able to use the 
options for merged sortation, mailers must present mailings using the 
information in the City State Product within 90 days of the release 
date of the City State Product they used for the presort. This is 
necessary to ensure use of up-to-date preparation information. Although 
DMM L module labeling lists are revised and distributed electronically 
on a bimonthly basis that corresponds roughly to the bimonthly release 
of the City State Product and other Address Information Products, they 
do not have a ``release date''. Rather, they are distributed with a 
mandatory effective date. The Postal Service has limited resources for 
developing such new products and none of the vendors that are currently 
PAVE-certified submitted any comments to request that this information 
be provided in the format of a separate electronic list. Therefore, the 
Postal Service will not pursue creation of a separate electronic file 
containing the Carrier Route Indicators field information in the City 
State File at this time. Mailers wishing to sort using the new options 
in M920 and M940 that require use of the City State Product will be 
required to use PAVE-certified presort software that incorporates a 
link to the City State Product.

g. Revise Requirements for Scheme Sortation Used in Conjunction With 
Merged Sortation Under DMM M920

    One commenter indicated that the overlay of merged sortation using 
the ``Yes'' and ``No'' indicators in the City State Product with scheme 
sortation using DMM labeling list L001 is difficult to use. This 
commenter questioned the need for such complexity in view of his belief 
that this is a transitional requirement dependent on installation of 
new hardware (AFSM 100s). He

[[Page 50058]]

suggested that we simplify the proposed rules by using a single ZIP 
Code for the L001 scheme (the ``label to'' ZIP Code for the scheme) to 
look up the ``Yes'' or ``No'' indicator in the City State Product, and 
apply this indicator to all ZIP Codes for the scheme. Alternatively, 
this commenter suggested that we modify the scheme sortation L001 lists 
so that each scheme has either all ``Yes'' indicators or all ``No'' 
indicators.
    The Postal Service has reviewed the preliminary information in the 
Carrier Route Indicators field in the City State Product and matched it 
against the DMM L001 scheme sortation labeling list. Over one-half of 
the schemes on the L001 list consist of 5-digit ZIP Codes that are a 
mix of ``A'' or ``C'' indicators and ``B'' or ``D'' indicators. 
Therefore, use of the indicator listed for the ``label to'' ZIP Code of 
the scheme for all of the ZIP Codes in the scheme would result in 
sortation that does not mirror Postal Service processing in about one-
half of the scheme sorts. Furthermore, the one commenter on this issue 
does not currently use PAVE-certified software, the use of which will 
be required for the merged sortation option in M920 (and also for the 
new M940 option). Also, separating an existing scheme sort into two 
schemes so that all ZIP Codes in a scheme will have either an ``A'' or 
``C'' indicator or a ``B'' or ``D'' indicator will dilute the value of 
scheme sortation in terms of the number of 5-digit ZIP Codes that can 
be combined to create a scheme pallet. Accordingly, the Postal Service 
has determined not to pursue implementing this suggested revision to 
the proposed rule.

h. For All Types of Sortation (Current and New) a Minimum 24-Piece 
Carrier Route Sack Should Be Implemented

    One commenter indicated that the minimum 24-piece carrier route 
sack requirement that was proposed when sacking mail under the 
``merged'' sortation options in DMM M920 should be applied to all 
methods of sortation for Periodicals carrier route sacks. This 
commenter indicated that this requirement should have no impact on 
service since carrier route packages that could not be placed in a 
direct carrier route sack would still be placed in 5-digit carrier 
routes or 5-digit scheme carrier routes sacks that would be cross-
docked to the delivery unit for distribution to the appropriate 
carrier.
    The Postal Service published a separate Federal Register notice on 
May 16, 2000 (65 FR 3118) proposing that all Periodicals carrier route 
sacks contain a minimum of 24 pieces. This proposal was adopted as a 
final rule on July 28, 2000 (65 FR 46361) and will also be effective on 
the date that coincides with implementation of the rates resulting from 
the R2000-1 rate case.

i. Allow Commingling of Automation Rate and Presorted Rate Pieces in 
the Same Package

    One commenter indicated that the proposal to allow mailers to co-
sack or co-tray packages of automation rate and Presorted rate mail 
does not go far enough. This commenter indicated that allowing mail to 
be merged within the same package would result in more finely presorted 
mail, fewer packages, and heavier packages.
    FSM 881s and AFSM 100s have OCRs. Accordingly, it would be feasible 
to allow merging at the package level for mail that is FSM 881- or FSM 
100-compatible. There are also plans to retrofit FSM 1000s with OCRs. 
The Postal Service will pursue this suggestion at a later date. The 
Postal Service wants to first evaluate what mail is machinable on AFSM 
100s, have a deployment schedule for retrofitting FSM 1000s with OCRs, 
and determine a method to distinguish between pieces that are non-
barcoded because mailers made no attempt to barcode the pieces versus 
pieces that do not bear a barcode because mailer attempts to barcode 
were unsuccessful, before making a decision on this suggestion.

j. Implementation Date

    Eight commenters indicated that the proposed early September 
implementation date does not give the software industry or mailers 
enough time to implement these changes. These commenters suggested that 
the implementation date be set as the same date that the rates 
resulting from the R2000-1 rate case will be implemented. This would 
reduce the number of software installations that mailers must make this 
year. One commenter pointed out that the September implementation date 
would result in three software updates this year. The majority of these 
commenters indicated concern that the September date is not feasible 
because software vendors must build the software, test it, document it, 
PAVE-certify it, Beta test it, revise it, and cut and ship the software 
by July in order to give their customers time to implement and test the 
software by September. One commenter stated that such aggressive 
implementation schedules are a formula for disaster in terms of the 
quality of the presort products. Another commenter indicated that 
processing of their mail begins 6 to 8 weeks prior to mailing and that 
they will be in the midst of production at the same time they must test 
new software releases.
    One commenter pointed out that, because there are some required 
changes in the proposed rule, mailers would be required to update 
software even if they opt not to perform the other options provided in 
the notice. Another commenter suggested that if the Postal Service does 
not find it feasible to delay implementation until the date that the 
rates resulting from the R2000-1 rate case will be implemented, these 
rule changes should be delayed until at least October 7, 2000. Another 
commenter suggested that there should be a phased-in implementation 
where the rule changes would be optional on ``Day X'' and required on 
``Day X plus 90 or 120 days.''
    One commenter was concerned about the feasibility of training 
acceptance clerks on these new presort options and asked whether Quick 
Service Guides and ``new books'' would be published prior to the 
proposed September implementation date. This commenter also pointed out 
that the rule would already be in effect prior to the next National 
Postal Forum, which would prevent some mailers from obtaining more 
information on the changes before having to implement them.
    Based on the comments received, the Postal Service has determined 
to place all the provisions of this final rule (both required and 
optional sortation changes) into effect on the date the rates resulting 
from the R2000-1 rate case are implemented. It is anticipated that this 
date will be some time in early January 2001. Notice of this exact date 
will be published in a later issue of the Federal Register. In order to 
provide a brief transition period for mailings prepared using these new 
preparation standards, mailers may prepare and enter mailings under the 
provisions of this final rule on an optional basis beginning December 
15, 2000. Mailers will not need to obtain an exception to the 
implementation date from the Rates and Classification Service Centers 
to enter mail prepared under the provisions of this final rule when 
entered into the mail on or after December 15, 2000.

k. Issues Outside the Scope of the Federal Register

    Two commenters indicated that they could not support a redefinition 
of widely used ``skin sacks'' as fewer than 24 pieces rather than 6 
pieces, or the prohibition of sacks containing fewer than 6 pieces 
where it is necessary for service. One commenter indicated that the 
Postal Service needs to develop accurate cost data by package and 
container level to aid in developing

[[Page 50059]]

similar regulations that will drive costs out of the mail stream. One 
commenter indicated that the Postal Service needs to develop a new 
container or ``mini-pallet'' that would address issues with sacks.
    These comments are outside the scope of this rulemaking.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

    For the reasons discussed above, the Postal Service hereby adopts 
the following amendments to the Domestic Mail Manual, which is 
incorporated by reference in the Code of Federal Regulations (see 39 
CFR Part 111).

PART 111--[AMENDED]

    1. The authority citation for 39 CFR part 111 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 
3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Revise the following sections of the Domestic Mail Manual (DMM) 
as set forth below:

Domestic Mail Manual (DMM)

E  Eligibility

* * * * *

E100  First-Class Mail

* * * * *

E130  Nonautomation Rates

* * * * *
3.0 PRESORTED RATE
    [Revise the heading of 3.1 to read as follows:]

3.1  All Pieces

    [Amend 3.1d to provide for preparation under M910 to read as 
follows:]
    In addition to the standards in 1.0, all pieces in a Presorted 
First-Class rate mailing must:
* * * * *
    d. Be marked, sorted, and documented as specified in M130 or, 
alternatively for flat-size mail, under M910.
* * * * *

E140  Automation Rates

1.0  BASIC STANDARDS

1.1  All Pieces

    [Amend 1.1g to provide for preparation under M910 to read as 
follows:]
    All pieces in a First-Class Mail automation rate mailing must:
* * * * *
    g. Be marked, sorted, and documented as specified in M810 for 
letters and cards, or as specified in M820 or M910 for flats.
* * * * *
    [Amend the first sentence of 1.4 to show new location of 
information pertaining to ZIP Codes eligible for automation carrier 
route rates to read as follows:]

1.4  Carrier Route Presort

    Carrier route rates are available only for letter-size mail and 
only for those 5-digit ZIP Code areas identified with an ``A'' or ``B'' 
in the Carrier Route Indicators field of the USPS City State Product 
used for address coding. * * *
* * * * *
2.0  RATE APPLICATION
* * * * *

2.2  Flats

    [Amend the first sentence of 2.2 to provide for sortation under 
M910 to read as follows:]
    First-Class Mail automation rates apply to each piece that is 
sorted under M820 or under M910 into the corresponding qualifying 
groups: * * *
* * * * *

E200  Periodicals

* * * * *

E230  Nonautomation Rates

1.0  BASIC INFORMATION

1.1  Standards

    [Amend 1.1 to provide for preparation under M045, M910, M920, M930, 
and M940 to read as follows:]
    The standards for Presorted rates are in addition to the basic 
standards for Periodicals in E210, the standards for other rates or 
discounts claimed, and the applicable preparation standards in M045, 
M200, M910, M920, M930, or M940.
    Not all combinations of presort level, automation, and destination 
entry discounts are permitted.
* * * * *
2.0  CARRIER ROUTE RATES
* * * * *

2.2  Sequencing

    [Amend 2.2a to provide for preparation under M045, M920, M930, and 
M940 to read as follows:]
    Preparation to qualify eligible pieces for carrier route rates is 
optional and is subject to M045, M200, or (nonletter-size mail only) 
M920, M930, or M940. Carrier route sort need not be done for all 
carrier routes in a 5-digit area. Specific rate eligibility is subject 
to these standards:
    a. The carrier route rates for letter-size mail apply to copies 
that are prepared in carrier route packages of six or more pieces each 
that are sorted to carrier route, 5-digit carrier routes, or 3-digit 
carrier routes trays. The carrier route rates for flat-size mail apply 
to copies of flat-size or irregular parcel-size pieces prepared in 
carrier route packages of six or more pieces each and that are sorted 
to pallets under M045 or M920, M930, or M940, or sorted to carrier 
route, 5-digit scheme carrier routes, 5-digit carrier routes, or, under 
M920, merged 5-digit scheme or merged 5-digit sacks. Preparation of 5-
digit scheme carrier routes sacks or pallets is required and must be 
done for all 5-digit scheme destinations. Preparation of merged 5-digit 
sacks and merged 5-digit scheme sacks is optional but if performed must 
be done for all 5-digit ZIP Codes for which there is an ``A'' or ``C'' 
indicator in the City State Product that permits co-containerization of 
carrier route and 5-digit packages. Preparation of merged 5-digit 
pallets and merged 5-digit scheme pallets is optional but if performed 
must be done for all 5-digit ZIP Codes or 5-digit schemes for which 
those pallet levels are possible (under M920 if there is an ``A'' or 
``C'' indicator in the City State Product, under M930 if the 5% 
threshold standard is met, and under M940 if ZIP Codes have an ``A'' or 
``C'' indicator in the City State Product and if ZIP Codes with a ``B'' 
or ``D'' indicator in the City State Product meet the 5% threshold 
standards). For merged 5-digit scheme sacks or pallets, preparation 
also must be done for all 5-digit scheme destinations. The applicable 
sequencing requirements in M050 and in 2.2b or 2.2c also must be met.
    b. Basic carrier route rate mail must be prepared either in carrier 
walk sequence or in line-of-travel (LOT) sequence according to LOT 
schemes prescribed by the USPS (M050).
    c. The high density and saturation rates apply to pieces that are 
eligible for the carrier route rates under 2.2a, are prepared in 
carrier walk sequence, and meet the applicable density standards in 6.0 
for the rate claimed.
3.0  5-DIGIT RATES
    [Amend the first sentence of 3.0 and 3.0b to provide for 
preparation of mail under M045, M910, M920, M930, or M940 as follows:]
    Subject to M045, M200, or (nonletter-size mail only) M910, M920, 
M930, or M940, 5-digit rates apply to: * * *
* * * * *

[[Page 50060]]

    b. Flat-size pieces in 5-digit packages of six or more pieces each, 
placed in 5-digit sacks, merged 5-digit sacks, or merged 5-digit scheme 
sacks or palletized under M045 or M920, M930, or M940.
4.0  3-DIGIT RATES
    [Amend the first sentence of 4.0 and 4.0b to provide for 
preparation under M045, M910, M920, M930, or M940 to read as follows:]
    Subject to M045, M200, or (nonletter-size mail only) M910 or M920, 
M930, or M940, 3-digit rates apply to:
* * * * *
    b. Flat-size pieces in 5-digit and 3-digit packages of six or more 
pieces each, placed in 3-digit sacks or palletized under M045 or M920, 
M930, or M940.
5.0  BASIC RATES
    [Amend 5.0 to provide for preparation of mail under M045, M910, 
M920, M930, or M940 to read as follows:]
    Basic rates apply to pieces prepared under M045, M200, or 
(nonletter-size mail only) M910, M920, M930, or M940, that are not 
eligible for and claimed at carrier route, 5-digit, or 3-digit rates.
6.0  WALK-SEQUENCE DISCOUNTS

6.1  Eligibility

    [Amend 6.1 to provide for preparation under M045, M920, M930, or 
M940 as follows:]
    The high density or saturation rates apply to each walk-sequenced 
piece in a carrier route mailing, eligible under 2.2 and prepared under 
M045, M200, or (nonletter-size mail only) M920, M930, or M940, that 
also meets the corresponding addressing and density standards in 6.4. 
High density and saturation rate mailings must be prepared in carrier 
walk sequence according to schemes prescribed by the USPS (see M050).
* * * * *

E240  Automation Rates

1.0  BASIC STANDARDS

1.1 All Pieces

    [Amend 1.1f to provide for preparation under M045, M910, M920, 
M930, or M940 as follows:]
    All pieces in an automation Periodicals mailing must:
* * * * *
    f. Be marked, sorted, and documented as specified in M045, or M810 
(letters) or M820 (flats) or, for nonletter-size mail, M910, M920, M930 
or M940.
* * * * *
2.0  RATE APPLICATION

2.1 5-Digit Rates

    [Amend the first sentence of 2.1 and 2.1b to provide for 
preparation of flats under M910, M920, M930, or M940 to read as 
follows:]
    Subject to M045, M810, M820, M910, M920, M930, or M940, 5-digit 
automation rates apply to:
* * * * *
    b. Flats. 5-digit rates apply to pieces in 5-digit packages of six 
or more pieces each, prepared under M045, M820, M910, M920, M930, or 
M940.

2.2  3-Digit Rates

    [Amend the first sentence of 2.2 and 2.2b to provide for 
preparation of flats under M910, M920, M930, or M940 to read as 
follows:]
    Subject to M045, M810, M820, M910, M920, M930, or M940 3-digit 
automation rates apply to:
* * * * *
    b. Flats. 3-digit rates apply to pieces in 3-digit packages of six 
or more pieces each, prepared under M045, M820, M910, M920, M930, M940.

2.3  Basic Rates

    [Amend the first sentence of 2.3 and 2.3b to provide for 
preparation of flats under M910, M920, M930, or M940, and to delete the 
reference to M200 to read as follows:]
    Subject to M045, M810, M820, M910, M920, M930, or M940, basic 
automation rates apply to:
* * * * *
    b. Flats. Basic rates apply to pieces prepared under M045, M820, 
M910, M920, M930, or M940 that are not claimed at 5-digit or 3-digit 
rates.

E250  Destination Entry

* * * * *
2.0  DDU RATE

2.1 Eligibility

    [Amend 2.1 to provide for preparation under M920, M930, or M940 to 
read as follows:]
    The destination delivery unit (DDU) rate applies to pieces entered 
at the facility where the carrier cases mail for the carrier route 
serving the delivery address on the mailpiece. Letter-size copies 
claimed at DDU rates must be part of a carrier route package placed in 
a carrier route tray or a 5-digit carrier routes tray, prepared under 
M200, and otherwise eligible for and claimed at a carrier route rate. 
Flat-size or irregular parcel-size copies claimed at DDU rates must be 
part of a carrier route package placed in a carrier route sack; a 5-
digit carrier routes sack, a 5-digit scheme carrier routes sack, a 
merged 5-digit sack, or a merged 5-digit scheme sack prepared under 
M200 or M920, or palletized under M045, M920, M930, or M940, and 
otherwise eligible for and claimed at a carrier route rate. Except for 
the standards for preparing basic carrier route or walk-sequence 
carrier route rate mail, there is no additional minimum volume required 
for a DDU rate mailing.
* * * * *

E600  Standard Mail

* * * * *

E620  Nonautomation Standard Mail (A) Rates

1.0  PRESORTED REGULAR AND NONPROFIT RATES

1.1  Basic Standards

    [Amend 1.1d to provide for preparation of flat-size mail under 
M045, M910, M920, M930, or M940 as follows:]
    All pieces in a Presorted Regular or Presorted Nonprofit Standard 
Mail (A) mailing must:
* * * * *
    d. Be marked, sorted, and documented as specified in M045, M610, 
or, (flat-size mail only) under M910, M920, M930, or M940.
* * * * *

1.5  Presorted Rates

    [Amend the first sentence of 1.5 to provide for preparation of 
flat-size mail under M910, M920, M930, or M940. Redesignate 1.5g as 
1.5e through 1.5h, respectively. Add new 1.5d and revise redesignated 
1.5e to read as follows:]
    Presorted Regular or Nonprofit Standard Mail (A) rates apply to 
Regular or Nonprofit Standard Mail letters, flats, and machinable and 
irregular parcels weighing less than 16 ounces that are prepared under 
M045, M610, or (flat-size mail only) under M910, M920, M930, or M940. 
Basic Presorted rates apply to pieces that do not meet the standards 
for the \3/5\ Presorted rates described below. Basic rate and \3/5\ 
rate pieces prepared as part of the same mailing are subject to a 
single minimum volume standard. Pieces that do not qualify for the \3/
5\ rate must be paid at the basic rate and prepared accordingly. Pieces 
may qualify for the 3/5 rate if they are presented:
* * * * *
    d. In a 5-digit package of 10 or more flat-size pieces that is part 
of a group of packages sorted to a merged 5-digit sack(s) or merged 5-
digit scheme sack(s) destination that contains either at least one 
qualifying carrier route package of

[[Page 50061]]

10 or more pieces, or contains at least 125 pieces or 15 pounds of 
pieces prepared in 5-digit packages (both automation and Presorted rate 
5-digit packages count toward the 125-piece or 15-pound sack minimum).
    e. In a 5-digit or 3-digit package of 10 or more flat-size pieces 
palletized under M045, M920, M930, or M940.
* * * * *

2.0  ENHANCED CARRIER ROUTE RATES

2.1  General

    [Amend 2.1c to provide for preparation of carrier route packages 
under M920, M930, or M940 to read as follows:]
    All pieces in an Enhanced Carrier Route Standard Mail mailing 
(letters, flats, or, if merchandise samples distributed with detached 
address labels, irregular parcels) must:
* * * * *
    c. Be sorted to carrier routes, marked, and documented under M045 
(if palletized), M620 or, for flats only, M920, M930, or M940.
* * * * *

2.8  Basic Rates

    [Amend the first sentence of 2.8 and 2.8b to provide for 
preparation of flat-size mail under M045, M920, M930 or M940 to read as 
follows:]
    Basic (nonautomation) carrier route rates apply to each piece that 
is sorted under M045 (pallets), M620 or, for flats only, M920, M930, or 
M940 into the corresponding qualifying groups:
* * * * *
    b. Flat-size pieces in a carrier route package of 10 or more pieces 
palletized under M045, M920, M930, or M940, or placed in a carrier 
route sack containing at least 125 pieces or 15 pounds of pieces, or 
placed in a 5-digit carrier routes, 5-digit scheme carrier routes, 
merged 5-digit, or merged 5-digit scheme sack. Preparation of 5-digit 
scheme carrier routes sacks or pallets is optional but if performed 
must be done for all 5-digit scheme destinations. Preparation of merged 
5-digit sacks and merged 5-digit scheme sacks is optional but if 
performed must be done for all 5-digit ZIP Codes for which there is an 
``A'' or ``C'' indicator in the City State Product that permits co-
sacking of carrier route and 5-digit packages. Preparation of merged 5-
digit pallets and merged 5-digit scheme pallets is optional, but if 
performed must be done for all 5-digit ZIP Codes or 5-digit schemes for 
which those pallet levels are possible (under M920 if there is an ``A'' 
or ``C'' indicator in the City State Product, under M930 if the 5% 
threshold standard is met, and under M940 if ZIP Codes have an ``A'' or 
``C'' indicator in the City State Product and if ZIP Codes with a ``B'' 
or ``D'' indicator in the City State Product meet the 5% threshold 
standards). For merged 5-digit scheme sacks or pallets, preparation 
also must be done for all 5-digit scheme destinations.
* * * * *

E640  Automation Standard Mail (A) Rates

1.0  REGULAR AND NONPROFIT RATES

1.1  All Pieces

    [Amend 1.1g to provide for preparation under M045, M910, M920, 
M930, or M940 to read as follows:]
    All pieces in an automation rate Regular or Nonprofit Standard Mail 
(A) mailing must:
* * * * *
    g. Be marked, sorted, and documented as specified in M045, M810 
(letter-size), M820 (flat-size), or (flat-size only) M910, M920, M930, 
or M940.
* * * * *

1.4  Rate Application--Flats

    [Amend the first sentence of 1.4 to provide for preparation under 
M045, M910, M920, M930, and M940 to read as follows:]
    Automation rates apply to each piece that is sorted under M045, 
M820, M910, M920, M930, or M940, into the corresponding qualifying 
groups: * * *
* * * * *
2.0  ENHANCED CARRIER ROUTE RATES
* * * * *
    [Amend the first sentence of 2.3 to show new location of 
information pertaining to ZIP Codes eligible for letter-size automation 
basic carrier route rates to read as follows:]

2.3  Carrier Route Information

    The automation basic carrier route rate is available only for 
letter-size mail and only or those 5-digit ZIP Code areas identified 
with an ``A'' or ``B'' in the Carrier Route Indicators field in the 
USPS City State Product used for address coding. * * *
* * * * *

E650  Destination Entry

E651  Regular, Nonprofit, and Enhanced Carrier Route Standard Mail

* * * * *
6.0  DSCF DISCOUNT
* * * * *

6.2  Eligibility

    [Amend 6.2 by adding the following as the second sentence of 6.2 to 
allow DSCF rates for 5-digit packages in merged 5-digit or merged 5-
digit scheme sacks or pallets that are deposited at the destination 
delivery unit to read as follows:]
    * * * Pieces prepared under 1.0 through 4.0 and 6.0 and that are 
prepared in 5-digit packages placed in a merged 5-digit sack or pallet 
or in a merged 5-digit scheme sack or pallet that is deposited at the 
destination delivery unit as defined in 7.1, are eligible for the DSCF 
rate. * * *
7.0  DDU DISCOUNT
* * * * *

7.2  Eligibility

    [Amend the first sentence of 7.2 to provide for preparation under 
M910, M920, M930, or M940 to read as follows:]
    Pieces in a mailing that meet the standards in 1.0 through 4.0 and 
7.0 are eligible for the DDU rate when deposited at a DDU, addressed 
for delivery within that facility's service area (carrier routes), and 
placed in properly prepared and labeled carrier route packages sorted 
to carrier route trays (letters) or sacks (flats and irregular 
parcels), 5-digit carrier routes trays (letters) or sacks (flats and 
irregular parcels), 5-digit scheme carrier routes sacks (flats) under 
M600 or M920, merged 5-digit sacks (flats), merged 5-digit scheme sacks 
(flats) under M920, or palletized under M045 or M920, M930, or M940 and 
otherwise eligible for and claimed at a carrier route rate. * * *
* * * * *

L  Labeling Lists

L000  General Use

L001  5-Digit Scheme--Periodicals Flats and Irregular Parcels and 
Standard Mail (A) Flats

    [Amend the first sentence of L001 to read as follows:]
    When 5-digit scheme sort is used for Periodicals flats and 
irregular parcels packages and Standard Mail (A) flats packages, the 
applicable mail for the ZIP Codes shown in Column A must be combined on 
merged 5-digit scheme, 5-digit scheme carrier routes, or 5-digit scheme 
pallets, or in merged 5-digit scheme or 5-digit scheme carrier routes 
sacks labeled to the corresponding destination shown in Column B.
* * * * *

[[Page 50062]]

M  Mail Preparation and Sortation

M000  General Preparation Standards

M010  Mailpieces

M011  Basic Standards

1.0  TERMS AND CONDITIONS
* * * * *

1.2  Presort Levels

    [Amend 1.2 by redesignating 1.2g through 1.2p as 1.2k through 1.2t, 
respectively, and adding new 1.2g through 1.2j to read as follows:]
    Terms used for presort levels are defined as follows:
* * * * *
    g. Merged 5-digit sacks: the carrier route packages and/or 
automation rate 5-digit packages and/or Presorted rate 5-digit packages 
in a sack are all for a 5-digit ZIP Code that has an ``A'' or ``C'' 
indicator in the Carrier Route Indicators field in the City State 
Product that allows combining carrier route rate packages with 
automation rate 5-digit packages and Presorted rate 5-digit packages in 
the same 5-digit container.
    h. Merged 5-digit pallets: the carrier route packages and/or 
automation rate 5-digit packages and/or Presorted rate 5-digit packages 
on a pallet are: (1) Prepared under M920, and are all for a 5-digit ZIP 
Code that has an ``A'' or ``C'' indicator in the Carrier Route 
Indicators field in the City State Product, or (2) prepared under M930, 
and pieces in 5-digit packages meet the 5% threshold requirement, or 
(3) prepared under M940, and pieces are either all for a 5-digit ZIP 
Code that has an ``A'' or ``C'' indicator in the Carrier Route 
Indicators field in the City State Product, or are all for a ZIP Code 
with a ``B'' or ``D'' indicator in the City State Product and the 
pieces in 5-digit packages meet the 5% threshold requirement.
    i. Merged 5-digit scheme sack: the 5-digit ZIP Codes on pieces in 
carrier route packages and/or automation rate 5-digit packages and/or 
Presorted rate 5-digit packages in a sack are all for 5-digit ZIP Codes 
that are part of a single scheme as shown in L001, and the automation 
rate 5-digit packages and/or the Presorted rate 5-digit packages are 
also for 5-digit ZIP Codes that have an ``A'' or ``C'' indicator in the 
Carrier Route Indicators field in the City State Product that allows 
combining carrier route packages with automation rate 5-digit packages 
and Presorted rate 5-digit packages within the same 5-digit container.
    j. Merged 5-digit scheme pallet: the 5-digit ZIP Codes on pieces in 
carrier route packages and/or automation rate 5-digit packages and/or 
Presorted rate 5-digit packages on a pallet are all for 5-digit ZIP 
Codes that are part of a single scheme as shown in L001, and the pieces 
in automation rate 5-digit packages and/or the Presorted rate 5-digit 
packages are: (1) All for 5-digit ZIP Codes that have an ``A'' or ``C'' 
indicator in the Carrier Route Indicators field in the City State 
Product when prepared under M920, or (2) within the 5% threshold 
requirement for each 5-digit in the scheme when prepared under M930, or 
(3) are all either for 5-digit ZIP Codes that have an ``A'' or ``C'' 
indicator in the Carrier Route Indicators field in the City State 
Product, or are for ZIP Codes with a ``B'' or ``D'' indicator in the 
City State Product and the pieces in 5-digit packages meet the 5% 
threshold requirement for such a 5-digit ZIP Code in the scheme when 
prepared under M940.
* * * * *

1.3  Preparation Instructions

    [Amend 1.3h to reflect the requirement for 5-digit scheme pallets 
to be prepared as either pure 5-digit scheme carrier routes pallets or 
as 5-digit scheme pallets that do not contain carrier route mail; amend 
1.3i to show that 5-digit and 5-digit scheme sorts may contain only 5-
digit packages; redesignate 1.3j through 1.3v as 1.3n through 1.3z, 
respectively; add new 1.3j and 1.3k to contain information on new 
merged 5-digit sortations; and add new 1.3l and 1.3m to contain 
information on new merged 5-digit scheme sortations to read as 
follows:]
    For purposes of preparing mail:
* * * * *
    h. A 5-digit/scheme carrier routes sort for carrier route rate 
Periodicals flats and irregular parcels and Enhanced Carrier Route rate 
Standard Mail (A) flats prepared in sacks or as packages on pallets 
yields a 5-digit scheme carrier routes sack or pallet for those 5-digit 
ZIP Codes listed in L001 and 5-digit carrier routes sacks or pallets 
for other areas. The 5-digit ZIP Codes in each scheme are treated as a 
single presort destination subject to a single minimum sack or pallet 
volume, with no further separation by 5-digit ZIP Code required. Sacks 
or pallets prepared for a 5-digit scheme carrier routes destination 
that contain carrier route packages for only one of the schemed 5-digit 
areas are still considered 5-digit scheme carrier routes sorted and are 
labeled accordingly. The 5-digit/scheme sort is required for carrier 
route packages of flat-size and irregular parcel Periodicals and 
optional for carrier route packages of flat-size Enhanced Carrier Route 
rate Standard Mail (A) prepared in sacks or as packages on pallets. 
When preparation of 5-digit scheme carrier routes sacks or pallets is 
performed, it must be done for all 5-digit scheme destinations. A 5-
digit/scheme carrier routes sort may contain only carrier route 
packages prepared in sacks or as packages on pallets.
    i. A 5-digit/scheme sort for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared as packages on pallets 
yields 5-digit scheme pallets containing automation rate and Presorted 
rate 5-digit packages for those 5-digit ZIP Codes listed in L001 and 5-
digit pallets containing automation rate and Presorted rate 5-digit 
packages for other areas. The 5-digit ZIP Codes in each scheme are 
treated as a single presort destination subject to a single minimum 
pallet volume, with no further separation by 5-digit ZIP Code required. 
Pallets prepared for a 5-digit scheme destination that contain 5-digit 
packages for only one of the schemed 5-digit areas are still considered 
5-digit scheme sorted and are labeled accordingly. The 5-digit/scheme 
sort is required for flat-size and irregular parcel-size Periodicals 
and optional for flat-size Standard Mail (A) prepared as packages on 
pallets and may not be used for other mail prepared on pallets, except 
for 5-digit packages of Standard Mail (A) irregular parcels that are 
part of a mailing job that is prepared in part as palletized flats at 
automation rates. If preparation of 5-digit scheme pallets is 
performed, it must be done for all 5-digit scheme destinations.
    j. A merged 5-digit sort for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared in sacks yields merged 5-
digit sacks that contain carrier route packages and/or automation rate 
5-digit packages, and/or Presorted rate 5-digit packages that are all 
for a 5-digit ZIP Code that has an ``A'' or ``C'' indicator in the 
Carrier Route Indicators field in the City State Product that allows 
combining carrier route packages, automation rate 5-digit packages, and 
Presorted rate 5-digit packages in the same 5-digit sack or pallet. The 
merged 5-digit sort is optional for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared in sacks. Sacks prepared 
for a merged 5-digit destination that contain only a single rate level 
of package(s) (only carrier route packages(s) or only automation rate 
5-digit package(s) or only Presorted rate 5-digit packages) or that 
contain only two rate levels of package(s) are still considered to be 
merged 5-digit sorted and are labeled accordingly. If preparation of 
merged 5-digit sacks is performed, it must be done for all 5-

[[Page 50063]]

digit ZIP Code destinations with an ``A'' or ``C'' indicator in the 
Carrier Route Indicators field in the City State Product that allows 
combining carrier route packages, automation rate 5-digit packages, and 
Presorted rate 5-digit packages in the same 5-digit container.
    k. A merged 5-digit sort for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared as packages on pallets 
yields merged 5-digit pallets that contain carrier route packages and/
or automation rate 5-digit packages, and/or Presorted rate 5-digit 
packages that are: (1) Prepared under M920 and are all for a 5-digit 
ZIP Code that has an ``A'' or ``C'' indicator in the Carrier Route 
Indicators field in the City State Product that allows combining 
carrier route packages, automation rate 5-digit packages, and Presorted 
rate 5-digit packages in the same 5-digit sack or pallet, or (2) 
prepared under M930, and pieces in 5-digit packages meet the 5% 
threshold requirement, or (3) prepared under M940, and pieces are 
either all for a 5-digit ZIP Code that has an ``A'' or ``C'' indicator 
in the Carrier Route Indicators field in the City State Product, or are 
all for a ZIP Code with a ``B'' or ``D'' indicator in the City State 
Product and the pieces in 5-digit packages for such ZIP Codes meet the 
5% threshold requirement. The merged 5-digit sort is optional for 
Periodicals flats and irregular parcels and Standard Mail (A) flats 
prepared in sacks or as packages on pallets. Sacks or pallets prepared 
for a merged 5-digit destination that contain only a single rate level 
of package(s) (only carrier route packages(s) or only automation rate 
5-digit package(s) or only Presorted rate 5-digit packages) or that 
contain only two rate levels of package(s) are still considered to be 
merged 5-digit sorted and are labeled accordingly. If preparation of 
merged 5-digit pallets is performed, it must be done for all 5-digit 
ZIP Code destinations for which it is possible under M920, M930, or 
M940.

    l. A merged 5-digit scheme sort for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared in sacks yields merged 5-
digit scheme sacks that contain carrier route packages for those 5-
digit ZIP Codes that are part of a single scheme as shown in L001, and/
or automation rate 5-digit packages and/or Presorted rate 5-digit 
packages for 5-digit ZIP Codes in the scheme that have an ``A'' or 
``C'' indicator in the Carrier Route Indicators field in the City State 
Product that allows combining carrier route packages, automation rate 
5-digit packages, and Presorted rate 5-digit packages in the same 5-
digit container under M920. Sacks prepared for a merged 5-digit scheme 
destination that contain only a single rate level of package(s) (only 
carrier route packages(s) or only automation rate 5-digit package(s) or 
only Presorted rate 5-digit packages) or that contain only two rate 
levels of package(s), or that contain packages for only one of the 
schemed 5-digit areas are still considered to be merged 5-digit scheme 
sorted and are labeled accordingly. If preparation of merged 5-digit 
scheme sacks is performed, it must be done for all 5-digit scheme 
destinations in L001, and it must be done for all 5-digit destinations 
with an ``A'' or ``C'' indicator in the Carrier Route Indicators field 
in the City State Product, under the provisions of M920.
    m. A merged 5-digit scheme sort for Periodicals flats and irregular 
parcels and Standard Mail (A) flats prepared as packages on pallets 
yields merged 5-digit scheme pallets that contain carrier route 
packages for those 5-digit ZIP Codes that are part of a single scheme 
as shown in L001, and/or automation rate 5-digit packages and/or 
Presorted rate 5-digit packages for 5-digit ZIP Codes in the scheme 
that: (1) Have an ``A'' or ``C'' indicator in the Carrier Route 
Indicators field in the City State Product, when prepared under M920, 
that allows combining carrier route packages, automation rate 5-digit 
packages, and Presorted rate 5-digit packages in the same 5-digit 
container, or (2) are within the 5% threshold requirement for each 5-
digit in the scheme when prepared under M930, or (3) are all either for 
5-digit ZIP Codes that have an ``A'' or ``C'' indicator in the Carrier 
Route Indicators field in the City State Product, or are for ZIP Codes 
with a ``B'' or ``D'' indicator in the City State Product and the 
pieces in 5-digit packages meet the 5% threshold requirement for such a 
5-digit ZIP Code in the scheme when prepared under M940. Pallets 
prepared for a merged 5-digit scheme destination that contain only a 
single rate level of package(s) (only carrier route packages(s) or only 
automation rate 5-digit package(s) or only Presorted rate 5-digit 
packages) or that contain only two rate levels of package(s), or that 
contain packages for only one of the schemed 5-digit areas are still 
considered to be merged 5-digit scheme sorted and are labeled 
accordingly. If preparation of merged 5-digit scheme pallets is 
performed, it must be done for all 5-digit scheme destinations in L001, 
and it must be done for all 5-digit destinations possible under M920, 
M930, or M940.
* * * * *

M031  Labels

* * * * *
4.0  PALLET LABELS
* * * * *
    [Revise the heading and amend the contents of 4.4 to remove the 
requirement for pallet labels to contain the information required by 
the sack labeling standard for the class and rate claimed to read as 
follows:]

4.4  Required Information

    Labels must contain the information required under 4.0 and under 
M045, M920, M930 or M940 for the preparation method and class and rate 
claimed.
* * * * *
    [Amend the heading and contents of 4.7 to permit and require a 
``CARRIER ROUTES'' or ``CR-RTS'' designation only on 5-digit carrier 
routes or 5-digit carrier routes scheme pallets to read as follows:]

4.7  5-Digit, 5-Digit Carrier Routes, and 5-Digit Scheme Carrier 
Routes Pallets

    All 5-digit carrier routes or 5-digit scheme carrier routes pallets 
must show the words ``CARRIER ROUTES'' (or ``CR-RTS'') after the 
processing category description on the content line under M045, M920, 
M930, and M940. Five-digit pallets of Bound Printed Matter that contain 
only carrier route rate mail must also show the words ``CARRIER 
ROUTES'' (or ``CR-RTS'') after the processing category description on 
the content line under M045.
    [Remove 4.8. Designations pertaining to destination entry levels on 
pallets will no longer be required. Redesignate 4.9 through 4.13 as 4.8 
through 4.12.]
    [Revise the heading of and contents of redesignated 4.8 to read as 
follows:]

4.8  Automation Status

    All Periodicals and Standard Mail (A) 5-digit, 5-digit scheme, 3-
digit, SCF, ADC, ASF, and BMC pallets must show ``BARCODED'' or ``BC'' 
on the contents line if the pallet contains automation rate mail as 
provided in M045, M920, M930, and M940. Except for machinable parcels, 
all Periodicals and Standard Mail (A) 5-digit, 5-digit scheme, 3-digit, 
SCF, ADC, ASF, and BMC pallets must show ``NONBARCODED'' or ``NBC'' on 
the contents line if the pallet contains Presorted rate mail under 
M045, M920, M930, and M940. If a pallet contains copalletized 
automation rate and Presorted rate mail, the separate ``BARCODED'' and 
``NONBARCODED'' designations may be abbreviated ``BC/NBC.''
* * * * *

[[Page 50064]]

    [Add 4.13 to provide for additional pallet label information to 
read as follows:]

4.13  Pallet Package or Bundle Information

    It is recommended that mailers preparing packages on pallets add to 
the pallet label, below the office of mailing or mailer information 
line and according to the provisions of M032.4.11, additional 
information listing the number of packages for each package sortation 
and rate level on the pallet (i.e., the number of carrier route 
packages, the number of 5-digit, 3-digit, and ADC automation rate 
packages, and the number of 5-digit, 3-digit, and ADC Presorted rate 
packages on each pallet).
* * * * *
5.0  SECOND LINE CODES
    [Amend 5.0 to add the pallet abbreviation for CARRIER ROUTES and to 
add the abbreviation for NONBARCODED to read as follows:]
    The codes shown below must be used as appropriate on Line 2 of 
sack, tray, and pallet labels.

------------------------------------------------------------------------
               Content type                             Code
------------------------------------------------------------------------
 
                          *    *    *    *    *
Barcoded and Nonbarcoded..................  BC/NBC
Carrier Route.............................  C (type of route)
Carrier Routes............................  CR-RTS (5-digit sack and
                                             pallet designation)
                          *    *    *    *    *
Nonbarcoded...............................  Non BC (sacks)
                                            NBC (pallets, and co-trayed
                                             or co-sacked mail under
                                             M910)
                          *    *    *    *    *
------------------------------------------------------------------------

M032  Barcoded Labels

1.0  BASIC STANDARDS--TRAY AND SACK LABELS

1.1  Use

    [Amend the second and third sentences of 1.1 to require use of 
barcoded tray and sack labels for mailings prepared under M910 and M920 
to read as follows:]
* * * * *
    * * * Barcoded tray labels are required for all mailings of 
automation rate First-Class Mail flat-size pieces, for co-trayed 
automation rate and Presorted rate First-Class Mail flat-size pieces 
under M910, and for automation rate First-Class Mail, Periodicals, and 
Standard Mail (A) letter-size pieces. Barcoded sack labels are required 
for all mailings of automation rate Periodicals and Standard Mail (A) 
flat-size pieces prepared in sacks and, under M910 and M920, for co-
sacked automation rate and Presorted rate mailings and co-sacked 
carrier route, automation rate, and Presorted rate mailings. * * *

1.2  Destination Line (Line 1)

    [Amend 1.2b and 1.2c to include information on ``merged 5-digit'' 
sack labels to read as follows:]
    The destination line must meet these standards:
* * * * *
    b. Information. The destination line must contain only the 
information required by the applicable standards for the class, 
processing category, sortation level of the tray or sack, and the rates 
claimed. This information is contained in module L labeling lists for 
all sortation and rate levels except trays and sacks to carrier route, 
5-digit carrier routes, merged 5-digit, and 5-digit destinations, and 
except for automation letter trays to 5-digit scheme destinations. For 
the destination line of carrier route, 5-digit carrier routes, merged 
5-digit, and 5-digit trays and sacks, the city, two-letter state 
abbreviation, and 5-digit ZIP Code of the destination 5-digit ZIP Code 
area must be shown. For 5-digit scheme trays, the city, two-letter 
state abbreviation, and ZIP Code for the destination scheme must be 
obtained from the City State Product. The destination line may contain 
abbreviated city and state information if such abbreviations are those 
in the City State Product or in Publication 65, National Five-Digit ZIP 
Code and Post Office Directory.
    c. Military Destinations: On carrier route, 5-digit carrier routes, 
and 5-digit trays and sacks and on merged 5-digit sacks, the 
destination 5-digit ZIP Code of the mail contained in the tray or sack 
must be preceded by ``APO'' or ``FPO,'' as applicable, and ``AE'' (for 
090-098 ZIP Codes), ``AA'' (for 340 ZIP Codes), or ``AP'' (for 962-966 
ZIP Codes), as applicable.

1.3  Content Line (Line 2)

* * * * *

Exhibit 1.3a  3-Digit Content Identifier Numbers

* * * * *

------------------------------------------------------------------------
        Class and mailing           CIN     Human-readable  content line
------------------------------------------------------------------------
 
*                  *                  *                  *
                  *                  *                  *
FIRST-CLASS MAIL
 
*                  *                  *                  *
                  *                  *                  *
     [Amend Exhibit 1.3a by adding the following after ``FCM Flats--
                    Presorted'' to read as follows:]
 
FCM Flats--Co-Trayed Automation
 and Presorted
5-digit trays...................      221  FCM FLTS 5D BC/NBC
3-digit trays...................      222  FCM FLTS 3D BC/NBC
ADC trays.......................      231  FCM FLTS ADC BC/NBC
Mixed ADC trays.................      232  FCM FLTS BC/NBC WKG
 
*                  *                  *                  *
                  *                  *                  *
PERIODICALS (PER)
 
*                  *                  *                  *
                  *                  *                  *
 [Amend Exhibit 1.3a by adding the following after ``PER Flats--5-Digit,
                3-Digit, and Basic'' to read as follows:]
 
 PER Flats--Co-Sacked Automation
 and Presorted
5-digit sacks...................      321  PER FLTS 5D BC/NBC

[[Page 50065]]

 
3-digit sacks...................      322  PER FLTS 3D BC/NBC
SCF and origin/entry SCF sacks..      329  PER FLTS SCF BC/NBC
ADC sacks.......................      331  PER FLTS ADC BC/NBC
Mixed ADC sacks.................      332  PER FLTS BC/NBC WKG
PER Flats--Merged Carrier Route,
 Automation, and Presorted
Merged 5-digit..................      339  PER FLTS CR/5D
Merged 5-digit scheme...........      349  PER FLTS CR/5D SCH
PER Irregular Parcels--Merged
 Carrier Route, Automation, and
 Presorted
Merged 5-digit..................      340  PER IRREG CR/5D
Merged 5-digit scheme...........      365  PER IRREG CR/5D SCH
 
*                  *                  *                  *
                  *                  *                  *
PERIODICALS (NEWS)
 
*                  *                  *                  *
                  *                  *                  *
[Amend Exhibit 1.3a by adding the following after ``NEWS FLATS--5-digit,
                3-Digit, and Basic'' to read as follows:]
 
 NEWS Flats--Co-Sacked
 Automation and Presorted
5-digit sacks...................      421  NEWS FLTS 5D BC/NBC
3-digit sacks...................      422  NEWS FLTS 3D BC/NBC
SCF and origin/entry SCF sacks..      429  NEWS FLTS SCF BC/NBC
ADC sacks.......................      431  NEWS FLTS ADC BC/NBC
Mixed ADC sacks.................      432  NEWS FLTS BC/NBC WKG
NEWS Flats--Merged Carrier
 Route, Automation, and
 Presorted
Merged 5-digit..................      439  NEWS FLTS CR/5D
Merged 5-digit scheme...........      449  NEWS FLTS CR/5D SCH
NEWS Irregular Parcels--Merged
 Carrier Route, Automation, and
 Presorted
Merged 5-digit..................      440  NEWS IRREG CR/5D
Merged 5-digit scheme...........      465  NEWS IRREG CR/5D SCH
 
*                  *                  *                  *
                  *                  *                  *
STANDARD MAIL (A)
 
*                  *                  *                  *
                  *                  *                  *
  [Amend Exhibit 1.3a by adding the following after ``Enhanced Carrier
            Route Flats--Nonautomation'' to read as follows:]
 
 STD Flats--Co-Sacked Automation
 and Presorted
5-digit sacks...................      521  STD FLTS 5D BC/NBC
3-digit and origin/entry 3-digit      522  STD FLTS 3D BC/NBC
 sacks.
ADC sacks.......................      531  STD FLTS ADC BC/NBC
Mixed ADC sacks.................      532  STD FLTS BC/NBC WKG
STD Flats--Merged Carrier Route,
 Automation, and Presorted
Merged 5-digit..................      539  STD FLTS CR/5D
Merged 5-digit scheme...........      549  STD FLTS CR/5D SCH
 
*                  *                  *                  *
                  *                  *                  *
------------------------------------------------------------------------

M033  Sacks and Trays

1.0  BASIC STANDARDS
* * * * *

1.7  Origin/Entry 3-Digit/Scheme Trays and Sacks

    [Amend 1.7 to refer to the preparation of merged 5-digit sacks and 
merged 5-digit scheme sacks to read as follows:]
    Except for flat-size and irregular parcel-size Periodicals under 
1.8, after all carrier route, 5-digit carrier routes (and where 
permitted for flats in sacks, merged 5-digit scheme, 5-digit scheme 
carrier routes, merged 5-digit, and where permitted for letters in 
trays, 3-digit carrier routes), 5-digit (and where permitted for 
automation letters in trays,

[[Page 50066]]

5-digit scheme), 3-digit (and where permitted for automation letters in 
trays, 3-digit scheme) sacks/trays are prepared, an origin/entry 3-
digit sack or tray (or, if applicable, origin/entry 3-digit scheme 
tray) must be prepared to contain any remaining mail for each 3-digit 
(or 3-digit scheme) area serviced by the SCF (mail processing office) 
serving the post office where the mail is verified (origin), and may be 
prepared for each 3-digit (or 3-digit scheme) area served by the SCF/
plant where mail is entered (if that is different from the SCF/plant 
serving the post office where the mail is verified--e.g., a PVDS 
deposit site). In all cases, only one less-than-full sack or tray may 
be prepared for each 3-digit (or 3-digit scheme) area.

1.8  Periodicals Flats and Irregular Parcels Origin/Entry SCF Sacks

    [Amend 1.8 to refer to the preparation of merged 5-digit sacks and 
merged 5-digit scheme sacks to read as follows:]
    For flat-size and irregular parcel-size Periodicals, after all 
carrier route, 5-digit carrier routes (and where permitted merged 5-
digit scheme, 5-digit scheme carrier routes, and merged 5-digit), 5-
digit, 3-digit, and required SCF sacks are prepared, an origin/entry 
SCF sack must be prepared to contain any remaining 5-digit and 3-digit 
packages for the 3-digit ZIP Code area(s) served by the SCF serving the 
post office where the mail is verified (origin), and may be prepared 
for the area served by the SCF/plant where mail is entered (if that is 
different from the SCF/plant serving the post office where the mail is 
verified--e.g., a PVDS deposit site). In all cases, only one less-than-
full sack may be prepared for each SCF area.
* * * * *

M040  Pallets

M041  General Standards

* * * * *
5.0  PREPARATION

5.1  Presort

    [Amend 5.1 by replacing the first five sentences with the following 
six sentences to provide for advanced pallet preparation options in 
M920, M930, and M940 to read as follows:]
    Pallet preparation and pallet sortation are subject to the specific 
standards in M045, M920, M930, and M940. Pallet sortation is generally 
intended to presort the palletized portion of a mailing to at least the 
finest extent required for the corresponding class of mail and method 
of preparation. Pallet sortation is sequential from the lowest (finest) 
level to the highest and must be completed at each required level 
before the next optional or required level is prepared. Standard 
preparation terms for pallets are defined in M011, standard presort 
levels are defined in M045, and advanced presort levels are defined in 
M920, M930, and M940. For sacks, trays, or machinable parcels on 
pallets, the mailer must prepare all required pallet levels before any 
mixed ADC or mixed BMC pallets are prepared for a mailing or job. 
Packages prepared under M045 or M920, M930, or M940 must not be placed 
on mixed ADC or mixed BMC pallets.* * *

5.2  Required Preparation

    [Amend 5.2 to clarify that the pallet sortation requirement applies 
all Standard Mail (B) rather than just Parcel Post and to provide for 
advanced pallet preparation options in M920, M930, and M940 to read as 
follows:]
    These standards apply to:
    a. Periodicals, Standard Mail (A), and Standard Mail (B) (other 
than Parcel Post BMC Presort, OBMC Presort, DSCF, and DDU rate mail). A 
pallet must be prepared to a required sortation level when there are 
500 pounds of Periodicals or Standard Mail packages, sacks, or parcels, 
or six layers of Periodicals or Standard Mail(A) letter trays. For 
packages of Periodicals flats and irregular parcels on pallets that are 
prepared under the standards for package reallocation to protect the 
SCF pallet (M045.5.0), not all mail for a required 5-digit scheme 
carrier routes, 5-digit scheme, 5-digit carrier routes, or 5-digit 
pallet or for an optional merged 5-digit scheme, optional merged 5-
digit, or optional 3-digit pallet is required to be on that 
corresponding pallet level. For packages of Standard Mail (A) flats on 
pallets that are prepared under the standards for package reallocation 
to protect the SCF pallet (M045.5.0), not all mail for a required 5-
digit carrier routes or 5-digit pallet or for an optional 5-digit 
scheme carrier routes, merged 5-digit scheme, 5-digit scheme, merged 5-
digit pallet, or 3-digit pallet is required to be on that corresponding 
pallet level. For packages of Standard Mail (A) flats on pallets 
prepared under the standards for package reallocation to protect the 
BMC pallet (M045.6.0), not all mail for a required ASF pallet is 
required to be on an ASF pallet. Mixed ADC or mixed BMC pallets of 
sacks, trays, or machinable parcels, as appropriate, must be labeled to 
the BMC or ADC (as appropriate) serving the post office where mailings 
are entered into the mailstream. The processing and distribution 
manager of that facility may issue a written authorization to the 
mailer to label mixed BMC or mixed ADC pallets to the post office or 
processing and distribution center serving the post office where 
mailings are entered. These pallets contain all mail remaining after 
required and optional pallets are prepared to finer sortation levels 
under M045, as appropriate.
* * * * *

5.6  Mail on Pallets

    [Amend 5.6 by removing current 5.6c and 5.6d; redesignating current 
5.6e as 5.6f, and by adding new 5.6c through 5.6e to reflect new 
requirements for separating carrier route rate mail from non-carrier 
route rate mail on 5-digit and 5-digit scheme pallets to read as 
follows:]
    These standards apply to mail on pallets:
* * * * *
    c. For Bound Printed Matter (other than machinable parcels), 
carrier route rate mail and Presorted rate mail in the same mailing job 
may be combined on all levels of pallets.
    d. For Standard Mail (A) and Periodicals letter-size mail prepared 
in trays on pallets, and for nonletter-size Periodicals and Standard 
Mail (A) prepared either as sacks on pallets or as packages on pallets, 
carrier route mail must be prepared on separate 5-digit pallets (5-
digit carrier routes or 5-digit scheme carrier routes pallets) from 
automation rate or Presorted rate mail (that must be prepared on 5-
digit pallets or 5-digit scheme pallets). Exception: When nonletter-
size Periodicals and flat-size Standard Mail (A) is prepared under 
5.6e, carrier route mail, automation rate mail, and Presorted rate mail 
may be copalletized on the same merged 5-digit pallet or on the same 
merged 5-digit scheme pallet for applicable 5-digit ZIP Codes.
    e. Mailers of nonletter-size Periodicals and flat-size Standard 
Mail (A) that prepare packages on pallets may copalletize carrier route 
mail, automation rate mail, and Presorted rate mail on the same merged 
5-digit pallet or on the same merged 5-digit scheme pallet when they 
meet the conditions and preparation standards in M920, M930, or M940.
* * * * *
6.0  COPALLETIZED, COMBINED, OR MIXED-RATE LEVEL MAILINGS OF FLAT-SIZE 
PIECES
* * * * *

6.2  Application

    [Amend 6.2 by replacing ``M045'' with ``M045 or M920, M930, or 
M940.'']

[[Page 50067]]

6.3  Periodicals Publications

    [Amend 6.3 by replacing ``M045'' in the next to last sentence with 
``M045 or M920, M930, or M940.'']

6.4  Standard Mail (A)

    [Amend the last sentence of 6.4 by replacing ``M045'' with ``M045 
or M920, M930, or M940.'']
* * * * *

M045  Palletized Mailings

* * * * *
4.0  PALLET PRESORT AND LABELING
    [Amend 4.0 by removing current 4.4; redesignating current 4.2 and 
4.3 as 4.4 and 4.5, respectively; amending 4.1 to make it applicable to 
only Periodicals mail, to reflect new 5-digit pallet preparation 
procedures, and to clarify and amend the standards for line 2 of pallet 
labels; adding new 4.2 that separately specifies sortation of Standard 
Mail (A) pallets, reflects new 5-digit pallet preparation procedures, 
and clarifies and amends the standards for line 2 of pallet labels; 
adding new 4.3 that separately specifies sortation of Bound Printed 
Matter pallets, amending redesignated 4.4 for clarity, and clarifying 
and amending the standards for line 2 of pallet labels in all the 
aforementioned sections to read as follows:]

4.1  Periodicals Packages, Sacks, or Trays on Pallets

    Mailers must prepare pallets in the sequence listed below except 
that for mailings of sacks or trays on pallets that are not permitted 
to be prepared using scheme sortation (L001) under 4.1a and 4.1b, 
mailers must begin preparing pallets under 4.1c. Pallets must be 
labeled according to the Line 1 and Line 2 information listed below and 
under M031. Alternatively, at the mailer's option, Periodicals 
nonletter mail prepared as packages on pallets may be palletized in 
accordance with one of the advanced presort options under M920, M930, 
or M940.
    a. 5-Digit Scheme Carrier Routes. Required for nonletter-size 
packages on pallets. Not permitted for sacks or trays on pallets. May 
contain only carrier route packages for the same 5-digit scheme under 
L001. Scheme sort must be done for all possible 5-digit scheme 
destinations. For all 5-digit destinations that are not part of a 
scheme, prepare 5-digit carrier routes pallets under 4.1c where 
possible.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable, followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``CARRIER ROUTES'' or ``CR-TS'' 
and ``SCHEME'' or ``SCH.''
    b. 5-Digit Scheme. Required for nonletter-size packages on pallets. 
Not permitted for sacks or trays on pallets. May contain only 
automation rate and/or Presorted rate packages for the same 5-digit 
scheme under L001. Scheme sort must be done for all possible 5-digit 
scheme destinations. For all 5-digit destinations that are not part of 
a scheme, prepare 5-digit pallets under 4.1d where possible.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable, followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail; followed by ``SCHEME'' or ``SCH.''
    c. 5-Digit Carrier Routes. Required for sacks; required for 
packages (except for packages prepared to 5-digit scheme carrier routes 
pallets under 4.1a); optional for trays. May contain only carrier route 
mail for the same 5-digit ZIP Code.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' or, for trays on pallets only, ``LTRS'' as applicable; 
followed by ``CARRIER ROUTES'' or ``CR-RTS.''
    d. 5-Digit. Required for sacks; required for packages (except for 
packages prepared to 5-digit scheme pallets under 4.1b); optional for 
trays. May contain only automation rate and/or Presorted rate mail for 
the same 5-digit ZIP Code.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' or, for trays on pallets only, ``LTRS'' as applicable; 
followed by ``5D''; followed by ``BARCODED'' or ``BC'' if the pallet 
contains automation rate mail; and followed by ``NONBARCODED'' or 
``NBC'' if the pallet contains Presorted rate mail.
    e. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and/or Presorted rate mail.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' or, for trays on pallets only ``LTRS'' as applicable; 
followed by ``3D''; followed by ``BARCODED'' or ``BC'' if the pallet 
contains automation rate mail; and followed by ``NONBARCODED'' or 
``NBC'' if the pallet contains Presorted rate mail.
    f. SCF. Required. May contain carrier route rate, automation rate, 
and/or Presorted rate mail.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' or, for trays on pallets only, ``LTRS'' as applicable; 
followed by ``SCF''; followed by ``BARCODED'' or ``BC'' if the pallet 
contains automation rate mail; and followed by ``NONBARCODED'' or 
``NBC'' if the pallet contains Presorted rate mail.
    g. ADC. Required. May contain carrier route rate, automation rate, 
and/or Presorted rate mail.
    (1) Line 1 labeling: use L004.
    (2) Line 2 labeling: ``PER'' or ``NEWS'' as applicable; followed by 
``FLTS'' or ``IRREG'' or, for trays on pallets only, ``LTRS'' as 
applicable; followed by ``ADC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    h. For sacks and trays on pallets only, mixed ADC. Optional. May 
contain carrier route rate, automation rate, and/or Presorted rate 
mail.
    (1) Line 1: use ``MXD'' followed by the city/state/ZIP Code of the 
ADC serving the 3-digit ZIP Code prefix of the entry post office as 
shown in L004, Column A (label to plant serving entry post office if 
authorized by the processing and distribution manager).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' or, for trays on pallets only, ``LTRS'' as applicable; 
followed by ``BARCODED'' or ``BC'' if the pallet contains automation 
rate mail; followed by ``NONBARCODED'' or ``NBC'' if the pallet 
contains Presorted rate mail; and followed by ``WKG.''

4.2  Standard Mail (A) Packages, Sacks, or Trays on Pallets

    Mailers must prepare pallets in the sequence listed below. Mailers 
not opting to perform or not permitted to perform scheme sortation 
under 4.2a and 4.2b using L001 must begin preparing pallets under 4.2c. 
Pallets must be labeled according to the Line 1 and Line 2 information 
listed below and under M031. At the mailer's option, flat-size Standard 
Mail (A) prepared as packages on pallets may be palletized in 
accordance with the advanced presort option under M920.
    a. 5-Digit Scheme Carrier Routes. Optional. Permitted only for 
flat-size packages on pallets. May contain only carrier route rate 
packages for the same 5-digit scheme under L001. If scheme

[[Page 50068]]

sort is performed, it must be done for all 5-digit scheme destinations. 
For all 5-digit destinations that are not part of a scheme, prepare 5-
digit carrier routes pallets under 4.2c.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS''; followed by ``CARRIER ROUTES'' or ``CR-
RTS''; and ``SCHEME'' or ``SCH.''
    b. 5-Digit Scheme. Optional. Permitted only for flat-size packages 
on pallets. May contain only automation rate and/or Presorted rate 
packages for the same 5-digit scheme under L001. If scheme sort is 
performed, it must be done for all 5-digit scheme destinations. For all 
5-digit destinations that are not part of a scheme, prepare 5-digit 
pallets under 4.2d.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail, and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail; 
and followed by ``SCHEME'' or ``SCH''.
    c. 5-Digit Carrier Routes. Required for sacks; required for 
packages (except for packages prepared to 5-digit carrier route scheme 
pallets under 4.2a); optional for trays. May contain only carrier route 
rate mail for the same 5-digit ZIP Code.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS'' or ``STD A IRREG'' or, for trays on 
pallets only, ``STD LTRS'' as applicable; followed by ``CARRIER 
ROUTES'' or ``CR-RTS''.
    d. 5-Digit. Required for sacks; required for packages (except for 
packages prepared to 5-digit scheme pallets under 4.2b); optional for 
trays. May contain only automation rate and/or Presorted rate mail for 
the same 5-digit ZIP Code.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D'' or ``STD A IRREG 5D'' or, for trays on 
pallets only, ``STD LTRS 5D'' as applicable; followed by ``BARCODED'' 
or ``BC'' if the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    e. 3-digit: optional. May contain carrier route rate, automation 
rate, and/or Presorted rate mail.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D'' or ``STD A IRREG 3D'' or, for trays on 
pallets only, ``STD LTRS 3D'' as applicable; followed by ``BARCODED'' 
or ``BC'' if the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    f. SCF. Required. May contain carrier route rate, automation rate, 
and/or Presorted rate mail.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF'' or ``STD A IRREG SCF'' or, for trays 
on pallets only, ``STD LTRS SCF'' as applicable; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    g. ASF. Required, except that an ASF sort may not be required if 
using package reallocation for flats to protect the BMC pallet under 
6.0. May contain carrier route rate, automation rate, and/or Presorted 
rate mail. Sort ADC packages, trays or sacks to ASF pallets based on 
the ``label to'' ZIP Code for the ADC destination of the package, tray, 
or sack in L004 (letters or flats) or L603 (irregular parcels). Sort 
AADC trays to ASF pallets based on the ``label to'' ZIP Code for the 
AADC destination of the tray in L801. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF'' or ``STD A IRREG ASF'' or, for trays 
on pallets only, ``STD LTRS ASF'' as applicable; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    h. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate mail. Sort ADC packages, trays 
or sacks to BMC pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package, tray, or sack in L004 (letters or flats) or 
L603 (irregular parcels). Sort AADC trays to BMC pallets based on the 
``label to'' ZIP Code for the AADC destination of the tray in L801. See 
E651 for additional requirements for DBMC rate eligibility.
    (1) Line 1: use L601.
    (2) Line 2: ``STD FLTS BMC'' or ``STD A IRREG BMC'' or, for trays 
on pallets only, ``STD LTRS BMC'' as applicable; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    i. For sacks and trays on pallets only, mixed BMC. Optional. May 
contain carrier route rate, automation rate, and/or Presorted rate 
mail.
    (1) Line 1: use ``MXD'' followed by the information in L601, Column 
B, for the BMC serving the 3-digit ZIP Code prefix of the entry post 
office (label to plant serving entry post office if authorized by the 
processing and distribution manager).
    (2) Line 2: ``STD FLTS'' or ``STD A IRREG'' or, for trays on 
pallets only, ``STD LTRS'' as applicable; followed by ``BARCODED'' or 
``BC'' if the pallet contains automation rate mail; followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail; 
and followed by ``WKG.''

4.3  Bound Printed Matter Packages or Sacks on Pallets

    Prepare pallets in the sequence listed below. Label pallets 
according to the Line 1 and Line 2 information listed below and under 
M031.
    a. 5-digit. Required for sacks and for packages. May contain 
Carrier Route and/or Presorted rate mail.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D'' or ``STD B IRREG 5D'' as applicable, 
and, if the pallet contains only Carrier Route mail, followed by 
``CARRIER ROUTES'' (OR ``CR-RTS'').
    b. 3-digit. Optional. May contain carrier route rate and/or 
Presorted rate mail.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D'' or ``STD B IRREG 3D'' as applicable.
    c. SCF. Required. May contain carrier route rate and/or Presorted 
rate mail.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF'' or ``STD B IRREG SCF'' as applicable.
    d. Destination ASF. Required. May contain carrier route rate and/or 
Presorted rate mail. Sort ADC packages or sacks to ASF pallets based on 
the ``label to'' ZIP Code for the ADC destination of the package or 
sack in L004 (flats) or L603 (irregular parcels).
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF'' or ``STD B IRREG ASF'' as applicable.
    e. Destination BMC. Required. May contain carrier route rate and/or 
Presorted rate mail. Sort ADC packages or sacks to ASF pallets based on 
the ``label to'' ZIP Code for the ADC destination of the package or 
sack in L004 (flats) or L603 (irregular parcels).
    (1) Line 1: use L601.
    (2) Line 2: ``STD FLTS BMC'' or ``STD B IRREG BMC'' as applicable.
    f. For sacks on pallets only, mixed BMC. Optional. May contain 
Carrier Route and/or Presorted rate mail.
    (1) Line 1: use ``MXD'' followed by the information in L601, Column 
B, for the BMC serving the 3-digit ZIP Code prefix of the entry post 
office (label to plant serving entry post office if authorized by the 
processing and distribution manager).

[[Page 50069]]

    (2) Line 2: ``STD FLTS'' or ``STD B IRREG'' as applicable, followed 
by ``WKG.''

4.4  Machinable Parcels--Standard Mail (A), Bound Printed Matter, 
and Parcel Post (Except BMC Presort, OBMC Presort, and Parcel 
Select DDU and DSCF)

    Mailers must prepare pallets in the sequence listed below. Mailers 
may prepare Parcel Post other than BMC Presort, OBMC Presort, and 
Parcel Select DDU and DSCF on pallets under this section as an option. 
If Parcel Post is optionally sorted under this section it must meet all 
the requirements of this section. Pallets must be labeled according to 
the Line 1 and Line 2 information listed below and under M031.
    a. 5-digit. Required, except optional for Standard Mail (A) if 3/5 
rates are not claimed.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD A MACH 5D'' or ``STD B MACH 5D'' as applicable.
    b. For Standard Mail (A) and Parcel Post if DBMC rates are not 
claimed and for all Bound Printed Matter: Destination BMC. Required.
    (1) Line 1: use L601.
    (2) Line 2: ``STD A MACH BMC'' or ``STD B MACH BMC,'' as 
applicable.
    c. For Standard Mail (A) and Parcel Post if DBMC rates are claimed: 
Destination ASF/BMC. Option 1: Mailers may opt to sort mail to ASFs 
using L602 only when the mail on the ASF pallet will be deposited at 
the ASF to claim the DBMC rate. After ASF pallets are prepared (mail 
need not be sorted to all ASFs) remaining mail must be sorted to BMCs 
using L601. Mail on BMC pallets deposited at the applicable BMC 
facility will be eligible for DBMC rates only if its 3-digit ZIP Code 
prefix is listed in Exhibit E651.5.1 (Standard Mail (A)) or Exhibit 
E652.1.3 (Parcel Post) for that entry BMC. Option 2: Mailers may sort 
mail only to BMCs using L601. Under option 2, only mail for 3-digit ZIP 
Codes served by a BMC listed in Exhibit E651.5.1 or Exhibit E652.1.3 
are eligible for DBMC rates (i.e., mail for 3-digit ZIP Codes served by 
an ASF in Exhibit E651.5.1 or Exhibit E652.1.3 are not eligible for 
DBMC rates, nor are 3-digit ZIP Codes that do not appear on Exhibit 
E651.5.1 or Exhibit E652.1.3).
    (1) Line 1: Option 1: use L602 for ASF pallets; use L601 for BMC 
pallets.
    Option 2: use L601.
    (2) Line 2: ``STD A MACH' or ``STD B MACH'' as applicable; followed 
by ``ASF'' or ``BMC'' as applicable.
    d. Mixed BMC. Optional.
    (1) Line 1: use ``MXD'' followed by the information in L601, Column 
B, for the BMC serving the 3-digit ZIP Code prefix of the entry post 
office (label to plant serving entry post office if authorized by the 
processing and distribution manager).
    (2) Line 2: ``STD A MACH'' or ``STD B MACH'' as applicable, 
followed by ``WKG.''

4.5  Presorted Special Standard and Library Mail

    Mailers must prepare 5-digit pallets for Presorted 5-digit rate 
mailings and must prepare BMC pallets for Presorted BMC rate mailings 
as described below. Label pallets according to the Line 1 and Line 2 
information listed below and under M031.
    a. 5-digit (5-digit rate only). Required.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D'' or ``STD B IRREG 5D'' or ``STD B MACH 
5D'' as applicable.
    b. Destination BMC (BMC rate only). Required.
    (1) Line 1: use L601.
    (2) Line 2: ``STD FLTS BMC'' or ``STD B IRREG BMC'' or ``STD B MACH 
BMC'' as applicable.
5.0  PACKAGE REALLOCATION FOR PERIODICALS FLATS AND IRREGULAR PARCELS 
AND STANDARD MAIL (A) FLATS ON PALLETS

5.1  Basic Standards

    [Amend the second sentence of 5.1 to provide for new pallet levels 
to read as follows:]
    * * * The software will determine if mail for an SCF service area 
would fall beyond the SCF level if all optional merged 5-digit scheme, 
optional 5-digit scheme carrier routes, optional 5-digit scheme, merged 
5-digit, required 5-digit carrier routes, required 5-digit, or optional 
3-digit pallets are prepared. * * *

5.2  General Reallocation Rules

    [Amend 5.2b, 5.2c, and 5.2d to provide for new pallet levels to 
read as follows:]
    Reallocation rules:
* * * * *
    b. Reallocate packages from the highest available pallet level 
possible. If it is not possible to reallocate some mail from a 3-digit 
pallet first, then attempt to eliminate a 3-digit pallet and reallocate 
all mail from that pallet to create an SCF pallet; if mail cannot be 
reallocated from a 3-digit pallet, then attempt to reallocate some mail 
from a 5-digit, 5-digit carrier routes, merged 5-digit, 5-digit scheme, 
5-digit scheme carrier routes, or merged 5-digit scheme pallet.
    c. The reallocation process may result in the elimination of a 3-
digit pallet to create an SCF pallet, but a 5-digit, 5-digit carrier 
routes, merged 5-digit, 5-digit scheme, 5-digit scheme carrier routes, 
or merged 5-digit scheme pallet may not be eliminated in order to 
create an SCF pallet.
    d. When reallocating mail to create an SCF pallet, reallocate mail 
from only one more finely sorted pallet. This may be accomplished by 
reallocating a portion of a 3-digit pallet, reallocating all mail from 
a 3-digit pallet, or reallocating a portion of one of the following 
pallets: 5-digit, 5-digit carrier routes, merged 5-digit, 5-digit 
scheme, 5-digit scheme carrier routes, or merged 5-digit scheme.
* * * * *

5.3  Reallocation of Packages if Optional 3-Digit Pallets are 
Prepared

    [Amend 5.3c and 5.3d to provide for new pallet levels to read as 
follows:]
    Reallocation rules:
* * * * *
    c. If preparation is under M045 and there are no 3-digit pallets, 
attempt to identify a 5-digit, 5-digit carrier routes, 5-digit scheme, 
or 5-digit scheme carrier routes pallet of adequate weight to support 
reallocation of one or more packages to bring the mail that would fall 
beyond the SCF pallet level back to the SCF level. If preparation is 
under M920, M930, or M940 and there are no 3-digit pallets, attempt to 
identify a 5-digit, 5-digit carrier routes, merged 5-digit, 5-digit 
scheme, 5-digit scheme carrier routes, or merged 5-digit scheme pallet 
of adequate weight to support reallocation of one or more packages to 
bring the mail that would fall beyond the SCF pallet level back to the 
SCF level. A sufficient volume of mail must remain on the applicable 
pallet after reallocation to meet the pallet weight minimum established 
by the mailer in compliance with applicable DMM standards. If a 5-
digit, 5-digit carrier routes, merged 5-digit, 5-digit scheme, 5-digit 
scheme carrier routes, or merged 5-digit scheme pallet, as applicable, 
of adequate weight is available, create an SCF pallet by combining the 
reallocated packages with the mail that would fall beyond the SCF 
pallet level.
    d. If no single 5-digit, 5-digit carrier routes, merged 5-digit, 5-
digit scheme, 5-digit scheme carrier routes, or merged 5-digit scheme 
pallet, as applicable, within the SCF service area contains an

[[Page 50070]]

adequate volume of mail to allow reallocation of a portion of the mail 
on a pallet as described in 5.3c, then no packages will be reallocated 
and an SCF pallet will not be prepared; the mail that falls beyond the 
SCF pallet level must be placed on the appropriate level pallet (ADC, 
ASF, or BMC) or in the appropriate level sack.

5.4  Reallocation of Packages if Optional 3-digit Pallets are Not 
Prepared

    [Amend 5.4a and 5.4b to provide for new pallet levels to read as 
follows:]
    Reallocation rules:
    a. Attempt to identify a 5-digit, 5-digit carrier routes, merged 5-
digit, 5-digit scheme, 5-digit scheme carrier routes, or merged 5-digit 
scheme pallet of adequate weight to support reallocation of one or more 
packages to bring the mail that would fall beyond the SCF pallet level 
back to the SCF level. A sufficient volume of mail must remain on the 
5-digit, 5-digit carrier routes, merged 5-digit, 5-digit scheme, 5-
digit scheme carrier routes, or merged 5-digit scheme pallet after 
reallocation to meet the pallet weight minimum established by the 
mailer in compliance with applicable DMM standards. If a 5-digit, 5-
digit carrier routes, merged 5-digit, 5-digit scheme, 5-digit scheme 
carrier routes, or merged 5-digit scheme pallet of adequate weight is 
available, create an SCF pallet by combining the reallocated packages 
with the mail that would fall beyond the SCF pallet level.
    b. If no single 5-digit, 5-digit carrier routes, merged 5-digit, 5-
digit scheme, 5-digit scheme carrier routes, or merged 5-digit scheme 
pallet within the SCF service area contains an adequate volume of mail 
to allow reallocation of a portion of the mail on a pallet as described 
in 5.4a, then no packages will be reallocated and an SCF pallet will 
not be prepared; the mail that falls beyond the SCF pallet level must 
be placed on the appropriate level pallet (ADC, ASF, or BMC) or in the 
appropriate level sack.
* * * * *
    [Amend the title of 7.0 to read as follows:]
7.0  PALLETS OF PACKAGES AND TRAYS

7.1  Periodicals

    [Amend 7.1 by adding a new first sentence; by redesignating the 
current first sentence as 7.1a and removing the phrase ``letter-size''; 
by redesignating the current last sentence as 7.1b; and by replacing 
the current second sentence with 7.1c to require placement of carrier 
route sorted mail on separate pallets from automation rate and 
Presorted rate mail at the 5-digit presort level to read as follows:]
    Additional pallet preparation:
    a. Combined Mailings. When two or more publications are part of a 
combined mailing, the mailer must keep records for each mailing 
(publication) as required by standard.
    b. Destination Delivery Unit Rates. Pieces claimed at destination 
delivery unit rates do not require separation from pieces claimed at 
other rates on the same pallet.
    c. Carrier Route Mail on Separate 5-Digit Level Pallets. Carrier 
route sorted pieces must be prepared on separate 5-digit pallets (5-
digit carrier routes or 5-digit scheme carrier routes pallets) from 
automation rate or Presorted rate pieces (prepared on 5-digit pallets 
or 5-digit scheme pallets). Exception: When non-letter-size Periodicals 
are prepared as packages on pallets under M920, M930, or M940, then 
carrier route sorted mail, 5-digit sorted automation rate mail, and 5-
digit sorted Presorted rate mail may be placed on the same merged 5-
digit pallet or on the same merged 5-digit scheme pallet for those 5-
digit ZIP Codes for which (1) there are ``A'' or ``C'' indicators in 
the City State Product under M920, or (2) the 5-digit packages are 
within the 5% threshold requirement under M930, or (3) the 5-digit 
packages are either all for 5-digit ZIP Codes that have an ``A'' or 
``C'' indicator in the City State Product, or are for 5-digit ZIP Codes 
with a ``B'' or ``D'' indicator in the City State Product and the 
pieces in such 5-digit packages meet the 5% threshold under M940.

7.2  Standard Mail (A)

    [Amend 7.2 by adding a new first sentence; by redesignating the 
current first sentence as 7.2a; by redesignating the current last 
sentence as 7.2b; and by replacing the current second sentence with 
7.2c to require placement of carrier route sorted mail on separate 
pallets from automation rate and Presorted rate mail at the 5-digit 
presort level to read as follows:]
    Additional pallet preparation:
    a. Combined Mailings. Nonprofit mail may be included in the same 
mailing or palletized on the same pallet as other Standard Mail (A) 
only as permitted by standard.
    b. Destination Delivery Unit Rates. Pieces claimed at destination 
delivery unit rates do not require separation from pieces claimed at 
other rates on the same pallet.
    c. Carrier Route Mail on Separate 5-Digit Level Pallets. Carrier 
route rate pieces must be prepared on separate 5-digit pallets (5-digit 
carrier routes or 5-digit scheme carrier routes pallets) from 
automation rate and/or Presorted rate pieces (prepared on 5-digit 
pallets or 5-digit scheme pallets). Exception: When flat-size pieces 
are prepared as packages on pallets under M920, M930, or M940, then 
carrier route sorted mail, 5-digit sorted automation rate mail, and 5-
digit sorted Presorted rate mail may be placed on the same merged 5-
digit pallet or on the same merged 5-digit scheme pallet for those 5-
digit ZIP Codes for which (1) there are ``A'' or ``C'' indicators in 
the City State Product under M920, or (2) the 5-digit packages are 
within the 5% threshold requirement under M930, or (3) the 5-digit 
packages are either all for 5-digit ZIP Codes that have an ``A'' or 
``C'' indicator in the City State Product, or are for 5-digit ZIP Codes 
with a ``B'' or ``D'' indicator in the City State Product and the 
pieces in such 5-digit packages meet the 5% threshold under M940.
* * * * *
9.0  PALLETS OF COPALLETIZED PERIODICALS OR STANDARD MAIL (A) FLAT-SIZE 
PIECES

9.1  Basic Standards

    [Amend 9.1 by adding the following after the first sentence to 
provide for preparation under M920, M930, and M940 to read as follows:]
    * * * In addition, if copalletized under M920, M930, or M940, the 
provisions of one of those preparation options must also be met. * * *
* * * * *
    [Amend the heading and the contents of 9.4 to read as follows:]

9.4  Pallet Labels

    Pallet labels for copalletized mailings must meet the provisions of 
M031 and M045.4.0, or if applicable, M031 and M920, M930, or M940.
* * * * *

M100  First-Class Mail (Nonautomation)

* * * * *

M130  Presorted First-Class

1.0  BASIC STANDARDS

1.1  All Pieces

    [Amend 1.1 to provide for preparation under M920 to read as 
follows:]
    Each Presorted First-Class mailing must meet the applicable 
standards in E130 and in M010, M020, and M030; flat-size mail co-trayed 
with automation rate mail must be prepared under 1.6 and M910. All 
pieces must be in the same processing category, subject to 1.4, and 
must be sorted together and prepared under 2.0, 3.0, 4.0, or 5.0 as

[[Page 50071]]

appropriate; automation rate First-Class Mail must be prepared under 
M810, M820, or M910 as applicable. Letter-size pieces (including card-
size pieces) must be prepared in letter trays; flat-size pieces must be 
prepared in flat trays; parcels must be prepared in sacks. Subject to 
M012, all pieces must be marked ``Presorted'' and ``First-Class.''
* * * * *
    [Add new 1.6 to read as follows:]

1.6  Co-Traying with Automation Rate Mail

    Packages of flat-size mail prepared under 4.1 may be co-trayed with 
automation rate mail that is part of the same mailing job at all levels 
of trays if prepared under M910.
* * * * *

M200  Periodicals (Nonautomation)

1.0  BASIC STANDARDS

1.1  General Preparation

    [Amend 1.1 to provide for preparation under M910, M920, M930, and 
M940 to read as follows:]
    All pieces in each nonautomation rate Periodicals mailing must be 
in the same processing category and sorted together to the finest 
extent required under 2.0 and either 3.0 or 4.0 as appropriate; 
automation rate Periodicals must be prepared under M810 or M820 as 
applicable; nonletter-size mail co-sacked with automation rate mail 
must be prepared under 1.6 and M910, or under 1.7 and M920. Letter-size 
pieces must be prepared in trays; nonletter-size pieces must be 
prepared in sacks. Palletization of trays, sacks, or packages is 
permitted by M041 and M045. Nonletter-size packages may also be 
palletized under M041 and M920, M930, or M940. Postmasters may 
authorize preparation of small mailings in non-postal containers if 
they consist primarily of packages for local ZIP Codes, do not exceed 
20 pounds, and do not require postal transportation for processing.
* * * * *
    [Add new 1.6 and 1.7 to provide for preparation under M910 and M920 
to read as follows:]

1.6  Co-Sacking with Automation Rate Mail

    Packages of nonletter-size mail prepared under 2.4a and 2.4c 
through 2.4f may be co-sacked with automation rate mail that is part of 
the same mailing job under the standards in M910.

1.7  Merged Containerization of Nonletter-Size Carrier Route, 
Automation Rate, and Presorted Rate Mail

    Under the standards in M920, nonletter-size firm and 5-digit 
packages at Presorted rates that are prepared under 1.0 and 2.4a and 
2.4c may be co-sacked with nonletter-size carrier route packages 
prepared under 1.0 and 2.4b and with nonletter-size 5-digit packages at 
automation rates prepared under M820 in merged 5-digit sacks and in 
merged 5-digit scheme sacks or pallets. Under the standards in M920, 
M930, or M940, nonletter-size firm and 5-digit packages at Presorted 
rates that are prepared under 1.0 and 2.4a and 2.4c may be copalletized 
with nonletter-size carrier route packages prepared under 1.0 and 2.4b 
and with nonletter-size 5-digit packages at automation rates prepared 
under M820 on merged 5-digit pallets and in merged 5-digit scheme sacks 
or pallets.
* * * * *

M600  Standard Mail (Nonautomation)

M610  Presorted Standard Mail (A)

1.0  BASIC STANDARDS

1.1  All Mailings

    [Amend the first sentence of 1.1 and 1.1c to provide for 
preparation under M910, M920, M930 and M940 to read as follows:]
    All mailings at Presorted Standard rates are subject to specific 
preparation standards in 2.0 through 6.0 and to these general standards 
(automation rate mail must be prepared under M810, M820, M910, M920, 
M930, or M940, as applicable):
* * * * *
    c. All pieces must be sorted together and prepared under M045 or 
under M610 or, if flat-size under M910, 920, M930, or M940.
* * * * *
    [Add new 1.5 and 1.6 to provide for preparation under M910, M920, 
M930, and M940 to read as follows:]

1.5  Co-Sacking with Automation Rate Mail

    Packages of flat-size mail prepared under 4.3 may be co-sacked with 
automation rate mail that is part of the same mailing job under the 
standards in M910.

1.6  Merged Containerization With Carrier Route and Automation Rate 
Mail

    When the conditions and preparation standards in M920 are met, 
flat-size 5-digit packages at Presorted rates prepared under 4.3a may 
be co-sacked with flat-size carrier route rate packages prepared under 
M620 and with flat-size 5-digit packages at automation rates prepared 
under M820 in merged 5-digit sacks or in merged 5-digit scheme sacks. 
When the conditions and preparation standards in M920, M930, or M940 
are met, flat-size 5-digit packages at Presorted rates prepared under 
4.3a may be copalletized with flat-size carrier route rate packages 
prepared under M620 and with flat-size 5-digit packages at automation 
rates prepared under M820 in merged 5-digit pallets, or in merged 5-
digit scheme pallets.
* * * * *

M620 Enhanced Carrier Route Standard Mail

1.0 BASIC STANDARDS

1.1  All Mailings

    [Amend 1.1c to provide for preparation under M920, M930, and M940 
to read as follows:]
    All nonautomation rate Enhanced Carrier Route mailings are subject 
to these general standards (automation rate Enhanced Carrier Route 
mailings must be prepared under M810):
* * * * *
    c. All pieces must be sorted together and prepared under M045, 
M920, M930, or M940 (if palletized), or under M620 or M920 if sacked.
* * * * *
    [Add new 1.6 to provide for preparation under M920, M930, and M940 
to read as follows:]

1.6  Merged Containerization with Automation Rate and Presorted 
Rate Mail

    When the conditions and preparation standards in M920 are met, 
flat-size carrier route rate packages prepared under 2.0 may be co-
sacked with flat-size 5-digit packages at Presorted rates prepared 
under M610 and with flat-size 5-digit packages at automation rates 
prepared under M820 in merged 5-digit sacks or in merged 5-digit scheme 
sacks. When the conditions and preparation standards in M920, M930, or 
M940 are met, flat-size carrier route rate packages prepared under 2.0 
may be copalletized with flat-size 5-digit packages at Presorted rates 
prepared under M610 and with flat-size 5-digit packages at automation 
rates prepared under M820 in merged 5-digit pallets or in merged 5-
digit scheme pallets.
* * * * *

M800  All Automation Mail

* * * * *

[[Page 50072]]

M820  Flat-Size Mail

1.0  BASIC STANDARDS
* * * * *
    [Revise the heading and contents of 1.9 to provide for preparation 
under M910 to read as follows:]

1.9  Co-Traying, Co-Sacking, or Copalletizing with Presorted Rate 
Mail

    Packages prepared under M820 1.0 through 4.0 may be co-trayed or 
co-sacked with Presorted rate mail that is part of the same mailing job 
and mail class at all levels of tray or sack under the provisions of 
M910.
    [Add new 1.10 to provide for preparation under M920 to read as 
follows:]

1.10  Merged Containerization with Carrier Route and Presorted Rate 
Mail

    Under M920, 5-digit automation rate packages prepared under 
M820.1.0, M820.3.0, and M820.4.0 may be co-sacked with both carrier 
route rate packages and 5-digit Presorted rate packages in merged 5-
digit sacks or pallets, or in merged 5-digit scheme sacks or pallets, 
for those 5-digit ZIP Codes with an ``A'' or ``C'' indicator in the 
Carrier Route Indicators field of the City State Product that shows 
such combination is permissible. In addition, 5-digit automation rate 
packages prepared under M820.1.0, M820.3.0, and M820.4.0 may be 
copalletized with both carrier route rate packages and 5-digit 
Presorted rate packages on merged 5-digit pallets, or on merged 5-digit 
scheme pallets, under the conditions in M920, M930, or M940. Packages 
co-sacked or copalletized under M920, M930, or M940 must be part of the 
same mailing job and mail class.
* * * * *
    [Add new section M900 to provide for co-traying and co-sacking of 
automation rate and Presorted rate packages and co-sacking and 
copalletization of carrier route packages, 5-digit automation packages, 
and 5-digit Presorted rate packages to read as follows:]

M900  Advanced Preparation Options

M910  Co-Traying and Co-Sacking of Automation Rate and Presorted 
Rate Mailings of Flat-Size Mail

1.0  FIRST-CLASS MAIL

1.1  Basic Standards

    Packages of flat-size pieces in an automation rate mailing may be 
co-trayed with packages of flat-size pieces in a Presorted rate mailing 
under the following conditions:
    a. The pieces in the automation rate mailing and in the Presorted 
rate mailing must be part of the same mailing job and reported on the 
same postage statement.
    b. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
must meet the criteria for a flat under C050.3.1.
    c. The automation rate mailing must meet the eligibility criteria 
in E140, except that the traying criteria in 1.3 must be met rather 
than the traying criteria in M820.
    d. The Presorted rate mailing must meet the eligibility criteria in 
E130, except that the traying and documentation criteria in 1.1 and 1.3 
must be met rather than the traying and documentation criteria in M820.
    e. The rates for pieces in the automation rate mailing are applied 
based on the level of package to which they are sorted under E140.2.0.
    f. The automation rate pieces must be marked under M012. Pieces 
claimed at an automation rate must bear the ``First-Class'' marking or 
``Presorted'' and ``First-Class'' markings and, except as provided in 
M012, ``AUTO.'' The Presorted rate pieces must be marked ``First-
Class'' and ``Presorted.'' Presorted rate pieces must not bear the 
``AUTO'' marking.
    g. The packages prepared from the automation rate mailing and the 
packages prepared from the Presorted rate mailing must be sorted into 
the same trays as described in 1.3.
    h. A complete, signed, appropriate postage statement, using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures. In addition to the applicable 
postage statement, documentation produced by PAVE-certified or MAC-
certified software, or standardized documentation under P012, must be 
submitted with each co-trayed mailing job that describes for each tray 
sortation level the number of pieces qualifying for each applicable 
automation rate and the number of pieces that qualify for the Presorted 
rate under P012.
    i. Barcoded tray labels under M032 must be used to label the trays.

1.2  Package Preparation

    The automation rate mailing must be packaged and labeled under 
M820. The Presorted rate mailing must be packaged and labeled under 
M130.

1.3  Tray Preparation and Labeling

    Presorted rate and automation rate packages prepared under 1.2 must 
be presorted together into trays (co-trayed) in the sequence listed 
below. Trays must be labeled using the following information for Lines 
1 and 2 and M032 for other sack label criteria.
    a. 5-digit: required, full trays only (no overflow trays).
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``FCM FLTS 5D BC/NBC.''
    b. 3-digit: required, full trays only (no overflow trays).
    (1) Line 1: Use L002, Column A.
    (2) Line 2: ``FCM FLTS 3D BC/NBC.''
    c. Origin/entry 3-digit: required for each 3-digit ZIP Code served 
by the SCF of the origin (verification) office, optional for each 3-
digit ZIP Code served by the SCF of an entry office other than the 
origin office, no minimum.
    (1) Line 1: Use L002, Column A.
    (2) Line 2: ``FCM FLTS 3D BC/NBC.''
    d. ADC: required, full trays only (no overflow trays), use L004 to 
determine ZIP Codes served by each ADC.
    (1) Line 1: Use L004.
    (2) Line 2: ``FCM FLTS ADC BC/NBC.''
    e. Mixed ADC: required, no minimum.
    (1) Line 1: Use ``MXD'' followed by the city, state, and ZIP Code 
of the facility serving the 3-digit ZIP Code of the entry post office, 
as shown in L002, Column C.
    (2) Line 2: ``FCM FLTS BC/NBC WKG.''
2.0  PERIODICALS

2.1  Basic Standards

    Packages of nonletter-size pieces in an automation rate mailing may 
be co-sacked with packages of nonletter-size pieces in a Presorted rate 
mailing under the following conditions:
    a. The pieces in the automation rate mailing and in the Presorted 
rate mailing must be part of the same mailing job and must be reported 
on the appropriate postage statement(s).
    b. The pieces in the mailing job must all be nonletter-size and 
meet any other size and mailpiece design requirements applicable to the 
rate category for which they are prepared.
    c. The automation rate mailing must meet the eligibility criteria 
in E240, except that the sacking and documentation criteria in 2.1, 
2.3, and 2.4 must be met rather than the sacking and documentation 
criteria in M820.
    d. The Presorted rate mailing must meet the eligibility criteria in 
E230, except that the sacking and documentation criteria in 2.1, 2.3, 
and 2.4 must be met rather than the sacking and documentation criteria 
in M820.
    e. The rates for pieces in the automation rate mailing are applied 
based on the number of pieces in the

[[Page 50073]]

package and the level of package to which they are sorted under E240. 
The rates for pieces in the Presorted rate mailing are based on the 
number of pieces in the package and the level of sack in which they are 
placed under E230.
    f. The packages prepared from the automation rate mailing and the 
packages prepared from the Presorted rate mailing must be sorted into 
the same sacks as described in 2.3 and 2.4.
    g. A complete, signed, appropriate postage statement(s), using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures. In addition to the applicable 
postage statement, documentation produced by PAVE-certified or MAC-
certified software, or standardized documentation under P012, must be 
submitted with each co-sacked mailing job that describes for each sack 
sortation level the number of pieces qualifying for each applicable 
automation rate and the number of pieces that qualify for each 
applicable Presorted rate under P012.
    h. Barcoded sack labels under M032 must be used to label sacks.

2.2  Package Preparation

    The automation rate mailing must be packaged and labeled under M820 
(all package levels). The Presorted rate mailing must be packaged and 
labeled under M200 (excluding carrier route packages).

2.3  Low-Volume Packages in Sacks or on Pallets

    Five-digit and 3-digit packages prepared under M200 and M820 that 
contain fewer than six pieces may be placed in 5-digit, 3-digit and SCF 
sacks when the publisher determines that such preparation improves 
service. Pieces in such low volume packages must claim the applicable 
basic Presorted rate, except for firm packages at Presorted rates as 
applicable under M200.1.4.

2.4  Sack Preparation and Labeling

    Presorted rate and automation rate packages prepared under 2.2 and 
2.3 must be presorted together into sacks (co-sacked) in the sequence 
listed below. Sacks must be labeled using the following information for 
Lines 1 and 2 and M032 for other sack label criteria. If, due to the 
physical size of the mailpieces, the automation rate pieces are 
considered flat-size under C820 and the Presorted rate pieces are 
considered irregular parcels under C050, the processing category shown 
on the sack label must show ``FLTS.''
    a. 5-digit: required at 24 pieces to same 5-digit, optional with 
one six-piece package, or under 2.3 with at least one package of fewer 
pieces.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS 5D BC/
NBC.''
    b. 3-digit: required at 24 pieces to same 3-digit, optional with 
one six-piece package, or under 2.3 with at least one package of fewer 
pieces.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS 3D BC/
NBC.''
    c. SCF: required at 24 pieces, optional with one six-piece package, 
or under 2.3 with at least one package of fewer pieces.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS SCF BC/
NBC.''
    d. Origin/entry SCF: required for the SCF of the origin 
(verification) office, optional for the SCF of an entry office other 
than the origin office, no minimum.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS SCF BC/
NBC.''
    e. ADC: required at 24 pieces, optional with one six-piece package 
(packages of fewer than 6 pieces are not permitted).
    (1) Line 1: use L004.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS ADC BC/
NBC.''
    f. Mixed ADC: required, no minimum, except that packages of fewer 
than 6 pieces at 5-digit, 3-digit, and ADC package levels are not 
permitted.
    (1) Line 1: Use L802 (mail entered by the mailer at an ASF or BMC) 
or L803, as appropriate.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable and ``FLTS BC/NBC 
WKG.''
3.0  STANDARD MAIL (A)

3.1  Basic Standards

    Packages of flat-size pieces in an automation rate mailing may be 
co-sacked with packages of flat-size pieces in a Presorted rate mailing 
under the following conditions:
    a. The pieces in the automation rate mailing and in the Presorted 
rate mailing must be part of the same mailing job and reported on the 
same postage statement or consolidated postage statement.
    b. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
must meet the criteria for a flat under C050.3.1.
    c. The automation rate mailing must meet the eligibility criteria 
in E640, except that the sacking and documentation criteria in 3.1, 
3.3, and 3.4 must be met rather than the sacking and documentation 
criteria in M820.
    d. The Presorted rate mailing must meet the eligibility criteria in 
E620, except that the sacking and documentation criteria in 3.1, 3.3, 
and 3.4 must be met rather than the sacking and documentation criteria 
in M610.
    e. The rates for pieces in the automation rate mailing are applied 
based on the number of pieces in the package and the level of package 
to which they are sorted under E640.1.0. The rates for pieces in the 
Presorted rate mailing are based on the number of pieces in the package 
and the level of sack in which they are placed under E620.1.0.
    f. The automation rate pieces must be marked under M012. Pieces 
claimed at an automation rate must be marked ``Presorted Standard'' (or 
``PRSRT STD'') or ``Nonprofit Organization'' (or ``Nonprofit Org.'' or 
``Nonprofit'') and, except as provided in M012, ``AUTO.'' The Presorted 
rate pieces must be marked ``Presorted Standard'' (or ``PRSRT STD'') or 
``Nonprofit Organization'' (or ``Nonprofit Org.'' or ``Nonprofit''). 
Presorted rate pieces must not bear the ``AUTO'' marking.
    g. The packages prepared from the automation rate mailing and the 
packages prepared from the Presorted rate mailing must be sorted into 
the same sacks as described in 3.3 and 3.4.
    h. A complete, signed, appropriate postage statement(s), using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures. In addition to the applicable 
mailing statement, documentation produced by PAVE-certified or MAC-
certified software, or standardized documentation under P012, must be 
submitted with each co-sacked mailing job that describes for each sack 
sortation level the number of pieces qualifying for each applicable 
automation rate and the number of pieces that qualify for each 
applicable Presorted rate under P012.
    i. Barcoded sack labels under M032 must be used to label the sacks.

3.2  Package Preparation

    The automation rate mailing must be packaged and labeled under 
M820. The Presorted rate mailing must be packaged and labeled under 
M610. Loose packing under M610 is not permitted.

3.3  Sacking under 125-piece or 15-pound rules

    When the minimum quantity of 125-pieces or 15-pounds of mail is 
specified

[[Page 50074]]

for a sack sortation level in 3.4, the provisions of M820.4.2 apply.

3.4  Sack Preparation and Labeling

    Presorted rate and automation rate packages prepared under 3.2 must 
be presorted together into sacks (co-sacked) in the sequence listed 
below. Sacks must be labeled using the following information for Lines 
1 and 2, and M032 for other sack label criteria.
    a. 5-digit: required, 125-piece/15-pound minimum, smaller volume 
not permitted.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS 5D BC/NBC.''
    b. 3-digit: required, 125-piece/15-pound minimum, smaller volume 
not permitted.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D BC/NBC.''
    c. Origin/entry 3-digit: required for each 3-digit ZIP Code served 
by the SCF of the origin (verification) office, optional for each 3-
digit ZIP Code served by the SCF of an entry office other than the 
origin office, no minimum.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D BC/NBC.''
    d. ADC: required, 125-piece/15-pound minimum, smaller volume not 
permitted, use L004 to determine ZIP Codes served by each ADC.
    (1) Line 1: use L004.
    (2) Line 2: ``STD FLTS ADC BC/NBC.''
    e. Mixed ADC: required, no minimum.
    (1) Line 1: use L802 for mail entered by the mailer at an ASF or 
BMC, otherwise use L803.
    (2) Line 2: ``STD FLTS BC/NBC WKG.''

M920  Merged Containerization of Periodicals and Standard Mail (A) 
Carrier Route, Automation, and Presorted Rate Mail Packages for the 
Same 5-Digit ZIP Code or 5-Digit Scheme Using the City State 
Product

1.0  PERIODICALS MAIL

1.1  Basic Standards

    Carrier route packages of nonletter-size pieces in a carrier route 
rate mailing may be placed in the same sack or on the same pallet (a 
merged 5-digit sack or pallet, or a merged 5-digit scheme sack or 
pallet) as nonletter-size 5-digit packages from an automation rate 
mailing and nonletter-size 5-digit packages from a Presorted rate 
mailing under the following conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route mailing, the automation rate 
mailing and the Presorted rate mailing must be part of the same mailing 
job.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must be nonletter-size.
    d. Mailers must use the Carrier Route Indicators field in the City 
State Product to prepare the mailing and enter the mailing no later 
than 90 days after the release date of the City State Product used.
    e. Carrier route packages may be co-sacked or copalletized with 
automation rate 5-digit packages and Presorted rate 5-digit packages 
only for those 5-digit ZIP Codes that have an ``A'' or ``C'' indicator 
in the Carrier Route Indicators field in the City State Product 
indicating they are eligible for such co-sacking or copalletization. 
Containers of mail sorted in this manner are called ``merged 5-digit'' 
sacks or pallets. Containers of mail sorted in this manner for which 
scheme sortation is also performed are called ``merged 5-digit scheme'' 
sacks or pallets.
    f. If sortation under this section is performed, merged 5-digit 
sacks or pallets must be prepared for all 5-digit ZIP Codes with an 
``A'' or ``C'' indicator in the City State Product that permits such 
preparation when there is enough volume for the 5-digit ZIP Code to 
prepare such a sack under 1.4 or such a pallet under 1.5. In addition, 
all possible merged 5-digit scheme sacks must be prepared under 1.4, or 
all possible merged 5-digit scheme and 5-digit scheme pallets must be 
prepared under 1.5.
    g. The carrier route mailing must meet the eligibility criteria in 
E230, the automation rate mailing must meet the eligibility criteria in 
E240, and the Presorted rate mailing must meet the eligibility criteria 
in E230.
    h. For sacked mailings, the rates for pieces in the carrier route 
mailing are based on the criteria in E230, the rates for pieces in the 
automation rate mailing are applied based on the number of pieces in 
the package and the level of package to which they are sorted under 
E240, and the rates for pieces in the Presorted rate mailing are based 
on the number of pieces in the package and the level of sack to which 
they are sorted under E230.
    i. For palletized mailings, the rates are based on the level of 
package and the number of pieces in the package under E230 and E240.
    j. The packages from each separate mailing must be sorted together 
into sacks (co-sacked) under 1.4 or on pallets (copalletized) under 1.5 
using presort software that is PAVE-certified.
    k. A complete, signed, appropriate postage statement(s), using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures.
    l. In addition to the applicable postage statement(s), 
documentation prepared by PAVE-certified software must be submitted 
with each co-sacked or copalletized mailing job that describes for each 
sack sortation level and sack, or each pallet sortation level and 
pallet, the number of pieces qualifying for each applicable carrier 
route rate, each applicable automation rate, and each applicable 
Presorted rate under P012.
    m. Barcoded sack labels under M032 must be used to label sacks.

1.2  Package Preparation

    Packages must be prepared as follows:
    a. Sacked Mailings. The carrier route mailing must be packaged and 
labeled under M200. The automation rate mailing must be packaged and 
labeled under M820. The Presorted rate mailing must be packaged and 
labeled under M200.
    b. Palletized Mailings. Packages placed on pallets must be prepared 
under the standards in M045.

1.3  Low-Volume Packages in Sacks or on Pallets

    Carrier route and 5-digit packages prepared under M200 and M820 
that contain fewer than six pieces must be placed in sacks under 1.4a 
through 1.4f or in 3-digit and SCF sacks, or on pallets under 1.5a 
through 1.5h, when the publisher determines that such preparation 
improves service. Pieces in such low-volume packages must claim the 
applicable basic rate, except that, as provided under M200.1.4, some 
firm packages may be eligible for carrier route rates and for 5-digit 
and 3-digit Presorted rates.

1.4  Sack Preparation and Labeling With Scheme Sort

    Mailers must prepare sacks containing the individual carrier route 
and 5-digit packages from the carrier route, automation rate, and 
Presorted rate mailings in the mailing job in the following manner and 
sequence. All carrier route packages must be placed in sacks under 1.4a 
through 1.4e as described below. When sortation under this section is 
performed, merged 5-digit scheme sacks, 5-digit scheme carrier routes 
sacks, and merged 5-digit sacks must be prepared for all possible 5-
digit schemes or 5-digit ZIP Codes as applicable, using L001 (merged 5-
digit scheme and 5-digit scheme carrier routes sort only) and the 
Carrier Route Indicators field in the City State Product when there is 
enough volume for the 5-digit scheme or 5-digit ZIP Code to

[[Page 50075]]

prepare such sacks under 1.4. Mailers must label sacks according to the 
Line 1 and Line 2 information listed below and under M032. If, due to 
the physical size of the mailpieces, the automation rate pieces are 
considered flat-size under C820 and the carrier route sorted pieces and 
Presorted rate pieces are considered irregular parcels under C050, 
``FLTS'' must be shown as the processing category shown on the sack 
label. If a mailing job does not contain an automation rate mailing and 
the carrier route mailing and the Presorted rate mailing are irregular 
parcel shaped, use ``IRREG'' for the processing category on the 
contents line of the label.
    a. Carrier Route. Required. May contain only carrier route 
packages. Must be prepared when there are 24 or more pieces for the 
same carrier route. Smaller volume not permitted.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``CR'' for basic rate, ``WSH'' 
for high-density rate, or ``WSS'' for saturation rate; and followed by 
the route type and number.
    b. Merged 5-Digit Scheme. Required. Permitted only when there is at 
least one 5-digit ZIP Code in the scheme with an ``A'' or ``C'' 
indicator in the City State Product. May contain carrier route packages 
for any 5-digit ZIP Code(s) in a single scheme listed in L001 as well 
as automation rate 5-digit packages and Presorted rate 5-digit packages 
for those 5-digit ZIP Codes in the scheme that have an ``A'' or ``C'' 
indicator in the City State Product. When preparation of this sack 
level is permitted, a sack must be prepared if there are any carrier 
route package(s) for the scheme. If there is not at least one carrier 
route package for any 5-digit destination in the scheme, preparation of 
this sack is required at 24 pieces in 5-digit packages, and optional 
with one six-piece package or at least one 5-digit package of fewer 
pieces for the scheme in L001 under 1.3, for any of the 5-digit ZIP 
Codes in the scheme that have an ``A'' or ``C'' indicator in the City 
State Product. For a 5-digit ZIP Code(s) in a scheme that has a ``B'' 
or ``D'' indicator in the City State Product, prepare sack(s) for the 
automation rate and Presorted rate packages under 1.4f through 1.4g. 
For 5-digit ZIP Codes not included in a scheme, prepare sacks under 
1.4d through 1.4g.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D SCH.''
    c. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for 5-digit ZIP Code(s) in a single scheme 
listed in L001 when all the 5-digits in the scheme have a ``B'' or 
``D'' indicator in the City State Product. Must be prepared if there 
are any carrier route package(s) for such a scheme.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR-RTS SCH.''
    d. Merged 5-Digit. Required. Must be prepared only for those 5-
digit ZIP Codes that are not part of a scheme and that have an ``A'' or 
``C'' indicator in the City State Product. May contain carrier route 
packages, automation rate 5-digit packages, and Presorted rate 5-digit 
packages. Must be prepared if there are any carrier route packages for 
the 5-digit. If there is not at least one carrier route package for the 
5-digit destination, preparation of this sack is required at 24 pieces 
in 5-digit packages for the same 5-digit destination, and is optional 
with one six piece package or at least one package of fewer pieces 
under 1.3.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D.''
    e. 5-Digit Carrier Routes. Required. Sack only carrier route 
packages for a 5-digit ZIP Code remaining after preparing sacks under 
1.4a through 1.4d to this level. May contain only carrier route 
packages for any 5-digit ZIP Code that is not part of a scheme listed 
in L001 and that has a ``B'' or ``D'' indicator in the City State 
Product. No sack minimum.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR-RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code for any 5-digit ZIP Code that has a ``B'' or ``D'' indicator in 
the City State Product. Must be prepared at 24 or more pieces, optional 
with one six-piece package or at least one package of fewer pieces 
under 1.3.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable, followed by ``FLTS 
5D BC/NBC'', except if there are no automation rate packages in the 
mailing job, label under M200.3.2f.
    g. 3-digit Through Mixed ADC Sacks. Any 5-digit packages remaining 
after preparing sacks under 1.4a through 1.4f, and all 3-digit, ADC, 
and Mixed ADC packages, must be sacked and labeled according to the 
applicable requirements under M910.2.0 for co-sacking of automation 
rate and Presorted rate packages, except if there are no automation 
rate packages in the mailing job, sack and label under M200.3.0.

1.5  Pallet Preparation and Labeling With Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. When sortation under this option is 
performed, mailers must prepare all merged 5-digit scheme, 5-digit 
scheme carrier routes, 5-digit scheme, and merged 5-digit pallets that 
are possible in the mailing based on the volume of mail to the 
destination using L001 and/or the City State Product as applicable. 
Mailers must label pallets according to the Line 1 and Line 2 
information listed below and under M031. If, due to the physical size 
of the mailpieces, the automation rate pieces are considered flat-size 
under C820 and the carrier route sorted pieces and Presorted rate 
pieces are considered irregular parcels under C050, ``FLTS'' must be 
shown as the processing category shown on the pallet label. If a 
mailing contains no automation rate pieces and the carrier route 
mailing and the Presorted rate mailing are irregular parcel shaped, use 
``IRREG'' for the processing category on the contents line of the 
label.
    a. Merged 5-Digit Scheme. Required and permitted only when there is 
at least one 5-digit ZIP Code in the scheme that has an ``A'' or ``C'' 
indicator in the City State Product. May contain carrier route packages 
for any 5-digit ZIP Code(s) in a single scheme listed in L001 as well 
as automation rate 5-digit packages and Presorted rate 5-digit packages 
for those 5-digit ZIP Codes in the scheme that have an ``A'' or ``C'' 
indicator in the City State Product. For schemes in which all of the 5-
digit ZIP Codes have a ``B'' or ``D'' indicator in the City State 
Product, begin preparing pallets under 1.5b (5-digit scheme carrier 
routes pallet). For 5-digit ZIP Codes not included in a scheme, begin 
preparing pallets under 1.5d (merged 5-digit pallet).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D SCHEME.''

[[Page 50076]]

    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for carrier routes in an L001 scheme for which 
all of the 5-digit ZIP Codes in the scheme have a ``B'' or ``D'' 
indicator in the City State Product.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR-RTS SCHEME.''
    c. 5-Digit Scheme. Required. May contain only 5-digit packages of 
automation rate and Presorted rate mail for the same 5-digit scheme 
under L001 for ZIP Codes in the scheme that have a ``B'' or ``D'' 
indicator in the City State Product.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail; and followed by ``SCHEME'' or ``SCH.''
    d. Merged 5-Digit. Required. May contain carrier route packages, 
automation rate 5-digit packages, and Presorted rate 5-digit for those 
5-digit ZIP Codes that are not part of a scheme and that have an ``A'' 
or ``C'' indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or IRREG'' as applicable; and followed by ``CR/5D.''
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code for those 5-digit ZIP Codes 
that are not part of a scheme and that have a ``B'' or ``D'' indicator 
in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code for those 5-digit ZIP Codes that are not part of a scheme and that 
have a ``B'' or ``D'' indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable, followed by ``FLTS'' 
or IRREG'' as applicable, followed by ``3D,'' followed by ``BARCODED'' 
or ``BC'' if the pallet contains automation rate mail, and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    h. SCF. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``SCF''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    i. ADC. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L004.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``ADC''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
2.0  STANDARD MAIL (A)

2.1  Basic Standards

    Carrier route packages of flat-size pieces in a carrier route rate 
mailing may be placed in the same sack or on the same pallet (a merged 
5-digit sack or pallet, or a merged 5-digit scheme sack or pallet) as 
flat-size 5-digit packages from an automation rate mailing and flat-
size 5-digit packages from a Presorted rate mailing under the following 
conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route rate mailing, the automation 
rate mailing, and the Presorted rate mailing must be part of the same 
mailing job, and all three mailings must be reported on the same 
postage statement or same consolidated postage statement.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must meet the criteria for a flat under 
C050.3.1.
    d. Mailers must use the Carrier Route Indicators field in the City 
State Product to prepare the mailing and enter the mailing no later 
than 90 days after the release date of the City State Product used.
    e. Carrier route rate packages may be co-sacked or copalletized 
with automation rate 5-digit packages and Presorted rate 5-digit 
packages only for those 5-digit ZIP Codes that have an ``A'' or ``C'' 
indicator in the Carrier Route Indicators field in the City State 
Product indicating they are eligible for such co-sacking or 
copalletization. Containers of mail sorted in this manner are called 
``merged 5-digit'' sacks or pallets. Containers of mail sorted in this 
manner for which scheme sortation is also performed are called ``merged 
5-digit scheme'' sacks or pallets.
    f. If sortation under this section is performed, merged 5-digit 
sacks or pallets must be prepared for all 5-digit ZIP Codes with an 
``A'' or ``C'' indicator in the City State Product that permits such 
preparation when there is enough volume for the 5-digit ZIP Code to 
prepare such a sack under 2.3 and 2.4 or 2.5, or such a pallet under 
2.6 or 2.7. In addition, if mailers also choose to sort to L001, all 
possible merged 5-digit scheme sacks must be prepared under 2.5, or all 
possible merged 5-digit scheme and 5-digit scheme pallets must be 
prepared under 2.7.
    g. The carrier route mailing must meet the eligibility criteria in 
E620, the automation rate mailing must meet the eligibility criteria in 
E640, and the Presorted rate mailing must meet the eligibility criteria 
in E620.
    h. For sacked mailings, the rates for pieces in the carrier route 
mailing are based on the criteria in E620, the rates for pieces in the 
automation rate mailing are applied based on the number of pieces in 
the package and the level of package to which they are sorted under 
E640, and the rates for pieces in the Presorted rate mailing are based 
on the number of pieces in the package and the level of sack to which 
they are sorted under E620.
    i. The pieces in each separate mailing must bear the applicable 
markings required under M610, M620, or M820 and under M012.
    j. For palletized mailings, the rates are based on the level of 
package that the pieces are contained in under E620 and E640.
    k. The packages from each separate mailing must be sorted together 
into sacks (co-sacked) under 2.3 and 2.4 or 2.5, or on pallets 
(copalletized) under 2.6 or 2.7, using presort software that is PAVE-
certified or MAC-certified.

[[Page 50077]]

    l. A complete, signed, appropriate postage statement or 
consolidated postage statement, using the correct USPS form or an 
approved facsimile, must accompany each mailing job prepared under 
these procedures.
    m. In addition to the applicable postage statement, documentation 
prepared by PAVE-certified or MAC-certified software must be submitted 
with each co-sacked or copalletized mailing job that describes for each 
sack sortation level and sack, or each pallet sortation level and 
pallet, the number of pieces qualifying for each applicable carrier 
route rate, each applicable automation rate, and each applicable 
Presorted rate under P012.
    n. Barcoded sack labels under M032 must be used to label sacks.

2.2  Package Preparation

    Packages must be prepared as follows:
    a. Sacked Mailings. The carrier route mailing must be packaged and 
labeled under M620. The automation rate mailing must be packaged and 
labeled under M820. The Presorted rate mailing must be packaged and 
labeled under M610.
    b. Palletized Mailings. Packages placed on pallets must be prepared 
under the standards in M045.

2.3  Sacking under 125-piece or 15-pound rules

    When the minimum quantity of 125-pieces or 15-pounds of mail is 
specified for a sack sortation level in 2.4, the provisions of M820.4.2 
apply.

2.4  Sack Preparation and Labeling Without Scheme Sort

    Mailers must prepare sacks containing the individual carrier route 
and 5-digit packages from the carrier route rate, automation rate, and 
Presorted rate mailings in the mailing job in the following manner and 
sequence. All carrier route packages must be placed in sacks under 2.4a 
through 2.4c as described below. When sortation under this section is 
performed, merged 5-digit sacks must be prepared for all 5-digit ZIP 
Codes with an ``A'' or ``C'' indicator in the City State Product that 
permits such preparation when there is enough volume for the 5-digit 
ZIP Code to prepare such a sack under 2.4. Mailers must label sacks 
according to the Line 1 and Line 2 information listed below and under 
M032.
    a. Carrier Route. Required. May contain only carrier route 
packages. Must be prepared when there are 125 pieces or 15 pounds of 
pieces for the same carrier route. Smaller volume not permitted.
    (1) Line 1 labeling: use city, state abbreviation, and 5-digit ZIP 
Code destination (see M032 for military mail).
    (2) Line 2 labeling: ``STD FLTS''; followed by ``ECRLOT'', 
``ECRWSH'', or ``ECRWSS'' as applicable for basic, high-density, and 
saturation rate mail; and followed by the route type and number.
    b. Merged 5-Digit. Required. Must be prepared only for those 5-
digit ZIP Codes that have an ``A'' or ``C'' indicator in the City State 
Product. May contain carrier route rate packages, automation rate 5-
digit packages, and Presorted rate 5-digit packages. Must be prepared 
if there is at least one carrier route package for the 5-digit ZIP 
Code. If there is no carrier route package(s) for a 5-digit 
destination, must be prepared when there are at least 125 pieces or 15 
pounds of pieces in 5-digit packages for the same 5-digit destination 
(smaller volume not permitted).
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS CR/5D.''
    c. 5-Digit Carrier Routes. Required. May contain only carrier route 
packages for a 5-digit ZIP Code that could not be sacked under 2.4a and 
b. No sack minimum. May contain only carrier route packages for a 5-
digit ZIP Code with a ``B'' or ``D'' indicator in the City State 
Product. All carrier route packages remaining after preparing sacks 
under 2.4a and b must be sacked to this level.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS CR-RTS.''
    d. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for a 5-digit ZIP Code 
with a ``B'' or ``D'' indicator in the City State Product. Must be 
prepared when there are at least 125 pieces or 15 pounds of pieces for 
the 5-digit ZIP Code. Smaller volume not permitted.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS 5D BC/NBC,'' except if there are no 
automation rate packages in the mailing job use ``STD FLTS 5D NON BC.''
    e. 3-Digit Through Mixed ADC Sacks. Any 5-digit packages remaining 
after preparing sacks under 2.4a through 2.4d, and all 3-digit, ADC, 
and Mixed ADC packages, must be sacked and labeled according to the 
applicable requirements under M910.3.0 for co-sacking of automation 
rate and Presorted rate packages, except if there are no automation 
rate packages in the mailing job, sack and label under M610.

2.5  Optional Sack Preparation and Labeling With Scheme Sort

    When mailers choose to prepare mail under this option, they must 
prepare sacks containing the individual carrier route and 5-digit 
packages from the carrier route rate, automation rate, and Presorted 
rate mailings in the mailing job in the following manner and sequence. 
All carrier route packages must be placed in sacks under 2.5a through 
2.5e as described below. When sortation under this section is 
performed, merged 5-digit scheme sacks, 5-digit scheme carrier routes 
sacks, and merged 5-digit sacks must be prepared for all possible 5-
digit schemes or 5-digit ZIP Codes as applicable, using L001 (merged 5-
digit scheme and 5-digit scheme carrier routes sort only) and the 
Carrier Route Indicators field in the City State Product when there is 
enough volume for the 5-digit scheme or 5-digit ZIP Code to prepare 
such sacks under 2.5. Mailers must label sacks according to the Line 1 
and Line 2 information listed below and under M032.
    a. Carrier Route. Required. May contain only carrier route 
packages. Must be prepared when there are 125 pieces or 15 pounds of 
pieces for the same carrier route. Smaller volume not permitted.
    (1) Line 1 labeling: use city, state abbreviation, and 5-digit ZIP 
Code destination (see M032 for military mail).
    (2) Line 2 labeling: ``STD FLTS''; followed by ``ECRLOT'', 
``ECRWSH'', or ``ECRWSS'' as applicable for basic, high-density, and 
saturation rate mail; and followed by the route type and number.
    b. Merged 5-Digit Scheme. Required and permitted only when there is 
at least one 5-digit ZIP Code in the scheme with an ``A'' or ``C'' 
indicator in the City State Product. May contain carrier route packages 
for any 5-digit ZIP Code(s) in a single scheme listed in L001 as well 
as automation rate 5-digit packages and Presorted rate 5-digit packages 
for those 5-digit ZIP Codes in the scheme with an ``A'' or ``C'' 
indicator in the City State Product. When preparation of this sack 
level is permitted, a sack must be prepared if there are any carrier 
route package(s) for the scheme. If there is not at least one carrier 
route package for any 5-digit destination in the scheme, preparation of 
this sack is required when there are at least 125 pieces or 15 pounds 
of pieces in 5-digit packages for any of the 5-digit ZIP Codes in the 
scheme that have an ``A'' or ``C'' indicator in the City State Product 
(smaller volume not permitted). For a 5-digit ZIP Code(s) in a scheme 
with a ``B'' or ``D'' indicator in the City State Product, prepare 
sack(s) for the

[[Page 50078]]

automation rate and Presorted rate packages under 2.5f and g. For 5-
digit ZIP Codes not included in a scheme, prepare sacks under 2.5d 
through 2.5g.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR/5D SCH''.
    c. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for 5-digit ZIP Code(s) in a single scheme 
listed in L001 when all the 5-digit ZIP Codes in the scheme have a 
``B'' or ``D'' indicator in the City State Product. Must be prepared if 
there are any carrier route package(s) for such a scheme.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR-RTS SCH''.
    d. Merged 5-Digit. Required. Must be prepared only for those 5-
digit ZIP Codes that are not part of a scheme and that have an ``A'' or 
``C'' indicator in the City State Product. May contain carrier route 
packages, automation rate 5-digit packages, and Presorted rate 5-digit 
packages. Must be prepared if there are any carrier route packages for 
the 5-digit destination. If there is not at least one carrier route 
package for the 5-digit destination, must be prepared when there are at 
least 125 pieces or 15 pounds of pieces in 5-digit packages for the 
same 5-digit destination (smaller volume not permitted).
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS CR/5D''.
    e. 5-Digit Carrier Routes. Required. Sack only carrier route 
packages for a 5-digit ZIP Code remaining after preparing sacks under 
2.5a through 2.5d to this level. May contain only carrier route 
packages for any 5-digit ZIP Code that is not part of a scheme listed 
in L001 and that has a ``B'' or ``D'' indicator in the City State 
Product. No sack minimum.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS CR-RTS''.
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for a 5-digit ZIP Code 
that has a ``B'' or ``D'' indicator in the City State Product. Must be 
prepared when there are at least 125 pieces or 15 pounds of pieces for 
the 5-digit ZIP Code. Smaller volume not permitted.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M032 for military mail).
    (2) Line 2: ``STD FLTS 5D BC/NBC,'' except if there are no 
automation rate packages in the mailing job, use ``STD FLTS 5D NON 
BC.''
    g. 3-Digit Through Mixed ADC Sacks. Any 5-digit packages remaining 
after preparing sacks under 2.5 a through f, and all 3-digit, ADC, and 
Mixed ADC packages, must be sacked and labeled according to the 
applicable requirements under M910.3.0 for co-sacking of automation 
rate and Presorted rate packages, except if there are no automation 
rate packages in the mailing job, sack and label under M610.

2.6  Pallet Preparation and Labeling Without Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. When sortation under this option is 
performed, merged 5-digit pallets must be prepared for all 5-digit ZIP 
Codes with an ``A'' or ``C'' indicator in the City State Product that 
permits such preparation when there is enough volume for the 5-digit 
ZIP Code to prepare such a pallet under 2.6. Mailers must label pallets 
according to the Line 1 and Line 2 information listed below and under 
M031.
    a. Merged 5-Digit. Required. May be prepared only for those 5-digit 
ZIP Codes with an ``A'' or ``C'' indicator in the City State Product. 
May contain carrier route rate packages, automation rate 5-digit 
packages, and Presorted rate 5-digit packages.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D''.
    b. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code that has a ``B'' or ``D'' 
indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS'', followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    c. 5-Digit. Required. May contain automation rate 5-digit packages 
and automation rate 5-digit packages for the same 5-digit ZIP Code that 
has a ``B'' or ``D'' indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    d. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    e. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    f. Destination ASF. Required, except that an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate, automation rate, and/or Presorted rate packages. Sort ADC 
packages to ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601.
    (2) Line 2: ``STD FLTS BMC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

2.7  Optional Pallet Preparation and Labeling With Scheme (L001) 
Sort

    When mailers choose to prepare mail under this option, they must 
prepare pallets of packages in the manner and sequence listed below and 
under M041. When sortation under this option is performed, mailers must 
prepare all merged 5-digit scheme, 5-digit scheme carrier routes, 5-
digit scheme, and merged 5-digit pallets that are possible in the 
mailing based on the volume of mail to the destination using L001 and/
or the City State Product as applicable. Mailers must label pallets 
according to the Line 1 and Line 2 information listed below and under 
M031.
    a. Merged 5-Digit Scheme. Required and permitted only when there is 
at least one 5-digit ZIP Code in the scheme that has an ``A'' or ``C'' 
indicator in the City State Product. May contain carrier route packages 
for any 5-digit ZIP Code(s) in a single scheme listed in

[[Page 50079]]

L001 as well as automation rate 5-digit packages and Presorted rate 5-
digit packages for those 5-digit ZIP Codes in the scheme that have an 
``A'' or ``C'' indicator in the City State Product. For schemes in 
which all of the 5-digit ZIP Codes have a ``B'' or ``D'' indicator in 
the City State Product, begin preparing pallets under 2.7b (5-digit 
scheme carrier routes pallet). For 5-digit ZIP Codes not included in a 
scheme, begin preparing pallets under 2.7d (merged 5-digit pallet).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR/5D SCHEME''.
    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for carrier routes in an L001 scheme for which 
all of the 5-digit ZIP Codes in the scheme have a ``B'' or ``D'' 
indicator in the City State Product.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR-RTS SCHEME''.
    c. 5-Digit Scheme. Required. May contain only 5-digit packages of 
automation rate and Presorted rate mail for the same 5-digit scheme 
under L001 for ZIP Codes in the scheme that have a ``B'' or ``D'' 
indicator in the City State Product.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; followed by ``NONBARCODED'' 
or ``NBC'' if the pallet contains Presorted rate mail; and followed by 
``SCHEME'' or ``SCH.''
    d. Merged 5-Digit. Required. May contain carrier route rate 
packages, automation rate 5-digit packages, and Presorted rate 5-digit 
packages for those 5-digit ZIP Codes that are not part of a scheme and 
that have an ``A'' or ``C'' indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D.''
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code for those 5-digit ZIP Codes 
that are not part of a scheme and that have a ``B'' or ``D'' indicator 
in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS,'' followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code for those 5-digit ZIP Codes that are not part of a scheme and that 
have a ``B'' or ``D'' indicator in the City State Product.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    h. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    i. Destination ASF. Required, except than an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate, automation rate, and/or Presorted rate packages. Sort ADC 
packages to ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    j. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601.
    (2) Line 2: ``STD FLTS BMC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

M930  Merged Palletization of Periodicals and Standard Mail (A) 
Carrier Route and 5-Digit Packages on 5-Digit and 5-Digit Scheme 
Pallets Using Only a 5% Threshold (Not Using the City State 
Product)

1.0  PERIODICALS MAIL

1.1  Basic Eligibility Requirements

    Nonletter-size 5-digit packages from an automation rate mailing and 
nonletter-size 5-digit packages from a Presorted rate mailing may be 
placed on the same pallet (a merged 5-digit pallet, or a merged 5-digit 
scheme pallet) as carrier route packages of nonletter-size pieces in a 
carrier route rate mailing under the following conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route mailing, the automation rate 
mailing, and the Presorted rate mailing must be part of the same 
mailing job.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must be nonletter-size.
    d. Automation rate 5-digit packages and Presorted rate 5-digit 
packages may be copalletized with carrier route packages only when the 
pieces in the 5-digit packages do not exceed the 5-percent limit 
described in 1.4. Pallets of mail sorted in this manner are called 
``merged 5-digit'' pallets. Pallets of mail sorted in this manner for 
which scheme sortation is also performed are called ``merged 5-digit 
scheme'' pallets.
    e. If sortation under this section is performed, merged 5-digit 
pallets and merged 5-digit scheme pallets must be prepared whenever 
there is enough volume of carrier route and 5-digit packages under M041 
and 1.4 to prepare such pallets. In addition, all possible merged 5-
digit scheme and 5-digit scheme pallets must be prepared under 1.4 and 
1.5.
    f. The carrier route mailing must meet the eligibility criteria in 
E230, the automation rate mailing must meet the eligibility criteria in 
E240, and the Presorted rate mailing must meet the eligibility criteria 
in E230.
    g. The rates are based on the level of package and the number of 
pieces in the package under E230 and E240.
    h. The packages from each separate mailing must be sorted together 
on pallets (copalletized) under 1.5 using presort software that is 
PAVE-certified.
    i. A complete, signed, appropriate postage statement(s), using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures.

[[Page 50080]]

    j. In addition to the applicable postage statement(s), 
documentation prepared by PAVE-certified software must be submitted 
with each copalletized mailing job that describes for each pallet 
sortation level and pallet the number of pieces qualifying for each 
applicable carrier route rate, each applicable automation rate, and 
each applicable Presorted rate under P012. A separate 5% threshold 
summary also must be provided under P012 for each ``logical'' merged 5-
digit scheme or ``logical'' merged 5-digit pallet presort destination. 
This 5% threshold summary must show for each 5-digit ZIP Code on the 
logical merged 5-digit scheme or logical merged 5-digit pallet (1) the 
total number of pieces on the pallet for the 5-digit ZIP Code (2) the 
total number of pieces sorted in carrier route packages for the 5-digit 
ZIP Code (including each firm package eligible for the carrier route 
rate and low-volume carrier route packages) (3) the total number of 
pieces sorted in 5-digit packages for the 5-digit ZIP Code (including 
each firm package eligible for the 5-digit or basic rate and low-volume 
5-digit packages), and (4) of the total number of pieces for the 5-
digit ZIP Code, the percentage of pieces sorted in 5-digit packages for 
that 5-digit ZIP Code. This additional 5% threshold summary must appear 
within the body of the documentation beneath the pallet rate listing 
for the last physical pallet for the logical pallet presort 
destination.

    Note: If there are two or more physical pallets for the same 
presort destination, for example, the same merged 5-digit pallet 
destination, these two or more physical pallets would be considered 
as one ``logical pallet''. The separate pallet summary must be for 
the mail on all of the physical pallets (the ``logical pallet'') for 
that presort destination.

    k. Portions of the mailing job that cannot be palletized must be 
prepared in sacks under M200, M820, M910, or M920.

1.2  Package Preparation

    Packages placed on pallets must be prepared under the standards in 
M045.

1.3  Low-Volume Packages on Pallets

    Carrier route and 5-digit packages prepared under M200, M820, and 
M045 that contain fewer than six pieces may be placed on pallets under 
1.5a through 1.5h, when the publisher determines that such preparation 
improves service. Pieces in such low-volume packages must pay the 
applicable basic rate.

1.4  5% Threshold Standard

    Mailers may place 5-digit packages with carrier route packages on 
the same merged 5-digit scheme or merged 5-digit pallet under 1.5 if 
all of the following conditions are met:
    a. The number of pieces prepared in 5-digit packages for any single 
5-digit ZIP Code on a ``logical'' merged 5-digit or merged 5-digit 
scheme pallet does not exceed 5% of the total number of pieces for the 
5-digit ZIP Code on the logical pallet for that presort destination. 
That is, the total number of pieces for a 5-digit ZIP Code in 5-digit 
and carrier route packages must not be greater than the number of 
pieces in carrier route packages divided by 0.95.
    b. The 5% threshold is calculated separately for each 5-digit ZIP 
Code. For example, if a scheme contains four different 5-digit ZIP 
Codes, a separate 5% threshold applies to each 5-digit ZIP Code for the 
scheme on a merged 5-digit scheme pallet.
    c. All the mail in a logical 5-digit package must be able to be 
placed on the logical pallet under the 5% rule. A logical 5-digit 
package is all pieces for a mailing (rate level) prepared in a 5-digit 
package or packages for the same 5-digit destination. For each 5-digit 
ZIP Code it is possible to have a logical 5-digit package of automation 
rate mail and a logical 5-digit package of Presorted rate mail. If the 
total number of pieces in a logical 5-digit package exceeds the 5% 
limit, none of the pieces for that 5-digit package level may be placed 
on a merged 5-digit or merged 5-digit scheme pallet. For some ZIP 
Codes, the total number of pieces prepared in logical 5-digit packages 
(both an automation rate 5-digit package and a Presorted rate 5-digit 
package) may exceed 5% of the total mail for that ZIP Code, but the 
number of pieces for an individual automation rate logical 5-digit 
package for that ZIP Code does not exceed the 5% limit nor does an 
individual Presorted rate logical 5-digit package for that ZIP Code 
exceed the 5% limit. In such instances, mailers may choose to place all 
of the pieces in a logical 5-digit package for a single rate category 
on the logical merged 5-digit or merged 5-digit scheme pallet so that 
the 5% threshold is not exceeded.

    Example: If there are a total of 1,100 pieces in carrier route 
and 5-digit packages for a 5-digit ZIP Code, a maximum of 55 pieces 
(5%) in 5-digit packages may be placed on a logical merged 5-digit 
or merged 5-digit scheme pallet with carrier route packages for that 
ZIP Code. If for this ZIP Code there are 30 pieces in a logical 
automation rate 5-digit package and 22 pieces in a logical Presorted 
rate package, the mailer could place all the pieces in both the 
logical automation rate and the logical Presorted rate packages on 
the merged 5-digit or merged 5-digit scheme pallet. If for this ZIP 
Code there are 45 pieces in a logical automation rate 5-digit 
package and 23 pieces in a logical Presorted rate 5-digit package, 
the mailer will choose to place either all of the automation rate 
pieces or all of the Presorted rate pieces on the merged 5-digit or 
merged 5-digit scheme pallet with carrier route packages for the 5-
digit ZIP Code. However, if there are 60 pieces in a logical 
automation rate 5-digit package and 32 pieces in a logical Presorted 
rate package, the mailer could only choose to place the pieces in 
the logical Presorted rate package with pieces in carrier route 
packages on the merged 5-digit or merged 5-digit scheme pallet.

    d. If the total number of pieces in both the logical 5-digit 
automation rate package and the logical 5-digit Presorted rate package 
each separately exceed 5% of the total number of pieces for the 5-digit 
ZIP Code, none of the pieces in 5-digit packages may be merged with 
carrier route packages on a merged 5-digit or merged 5-digit scheme 
pallet.
    e. Pieces in low-volume carrier route packages will count as 
carrier route sorted pieces for purposes of determining the 5% limit 
under 1.4a through 1.4d even though the basic rate is paid. Pieces in 
low-volume 5-digit packages will count as 5-digit sorted pieces for 
purposes of determining the 5% limit under 1.4a through 1.4d even 
though the basic rate is paid.
    f. Copies in firm packages claimed as one piece for rate purposes 
will be considered a single piece when performing the 5% limit 
calculation under 1.4a through 1.4d. As provided in M200.1.4, some firm 
packages claimed as one piece may be eligible for carrier route rates, 
5-digit rates, or basic rates. The sortation level of each firm piece 
(package) for purposes of applying the 5% limit will be considered to 
be carrier route if the firm piece (package) is eligible for the 
carrier route rate under M200.1.4. Otherwise the firm package will be 
considered to be a 5-digit sorted piece (even if the basic rate must be 
paid on that piece).

1.5  Pallet Preparation and Labeling With Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. Mailers must prepare all merged 5-digit 
scheme, 5-digit scheme carrier routes, 5-digit scheme, and merged 5-
digit pallets that are possible in the mailing based on the volume of 
mail to the destination using L001 and the 5% threshold, as applicable. 
Mailers must label pallets according to the Line 1 and Line 2 
information listed below and under M031. If, due to the physical size 
of the mailpieces, the automation rate pieces are considered flat-size 
under C820 and the carrier route sorted pieces and Presorted rate 
pieces are considered irregular parcels under C050, ``FLTS''

[[Page 50081]]

must be shown as the processing category shown on the pallet label. If 
a mailing contains no automation rate pieces and the carrier route 
mailing and the Presorted rate mailing are irregular parcel shaped, use 
``IRREG'' for the processing category on the contents line of the 
pallet label.
    a. Merged 5-Digit Scheme. Required. Permitted only when 5-digit 
packages for at least one 5-digit ZIP Code in the scheme may be merged 
with carrier route packages under the 5% threshold standard in 1.4. May 
contain carrier route packages for any 5-digit ZIP Code in a single 
scheme listed in L001. May also contain automation rate 5-digit 
packages and Presorted rate 5-digit packages up to a maximum of 5% of 
the total number of pieces for each 5-digit ZIP Code in the scheme 
under 1.4. For 5-digit ZIP Codes not included in a scheme, begin 
preparing pallets under 1.5d (merged 5-digit pallet).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D SCHEME.''
    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for all carrier routes in an L001 scheme when a 
merged 5-digit scheme pallet could not be prepared under 1.5a.
    (1) Line 1 use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR-RTS SCHEME.''
    c. 5-Digit Scheme. Required. May contain only 5-digit packages of 
automation rate and Presorted rate mail for the same 5-digit scheme 
under L001 that could not be placed on a merged 5-digit scheme pallet.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail; and followed by ``SCHEME'' or ``SCH.''
    d. Merged 5-Digit. Required. Permitted only when 5-digit packages 
may be merged with carrier route packages under the 5% threshold 
standard in 1.4 for a 5-digit ZIP Code that is not part of an L001 
scheme. May contain carrier route packages, automation rate 5-digit 
packages, and Presorted rate 5-digit packages. The number of pieces in 
5-digit packages is limited to 5% of the total number of pieces placed 
on the pallet under 1.4.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D.''
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code that is not part of a 
scheme for which a merged 5-digit pallet could not be prepared under 
1.5d.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code that is not part of a scheme and that could not be placed on a 
merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``3D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    h. SCF. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``SCF''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    i. ADC. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L004.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``ADC''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
2.0  STANDARD MAIL (A)

2.1  Basic Standards

    Flat-size 5-digit packages from an automation rate mailing and 
flat-size 5-digit packages from a Presorted rate mailing may be placed 
on the same pallet (a merged 5-digit pallet, or a merged 5-digit scheme 
pallet) as carrier route packages of flat-size pieces in a carrier 
route rate mailing under the following conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route rate mailing, the automation 
rate mailing, and the Presorted rate mailing must be part of the same 
mailing job and all three mailings must be reported on the same postage 
statement or same consolidated postage statement.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must meet the criteria for a flat under 
C050.3.1.
    d. Automation rate 5-digit packages and Presorted rate 5-digit 
packages may be copalletized with carrier route packages only when the 
pieces in the 5-digit packages do not exceed the 5-percent limit 
described in 2.3. Pallets of mail sorted in this manner are called 
``merged 5-digit'' pallets. Pallets of mail sorted in this manner for 
which scheme sortation is also performed are called ``merged 5-digit 
scheme'' pallets.
    e. If sortation under this section is performed merged 5-digit 
pallets, and if sorting under 2.5, merged 5-digit scheme pallets, must 
be prepared whenever there is enough volume of carrier route and 5-
digit packages under M041 and 2.3 to prepare such pallets. When mailers 
also choose to sort to L001, all possible merged 5-digit scheme and 5-
digit scheme pallets must be prepared under 2.3 and 2.5.
    f. The carrier route mailing must meet the eligibility criteria in 
E620, the automation rate mailing must meet the eligibility criteria in 
E640, and the Presorted rate mailing must meet the eligibility criteria 
in E620.
    g. The rates are based on the level of package that the pieces are 
contained in under E620 and E640.
    h. The packages from each separate mailing must be sorted together 
on pallets (copalletized) under 2.4 or 2.5 using presort software that 
is PAVE-certified or MAC-certified.
    i. The pieces in each separate mailing must bear the applicable 
markings

[[Page 50082]]

required under M610, M620, or M820 and under M012.
    j. A complete, signed, appropriate postage statement or 
consolidated postage statement, using the correct USPS form or an 
approved facsimile, must accompany each mailing job prepared under 
these procedures.
    k. In addition to the applicable postage statement(s), 
documentation prepared by PAVE-certified software must be submitted 
with each copalletized mailing job that describes for each pallet 
sortation level and pallet the number of pieces qualifying for each 
applicable carrier route rate, each applicable automation rate, and 
each applicable Presorted rate under P012. A separate 5% threshold 
summary also must be provided under P012 for each ``logical'' merged 5-
digit scheme or ``logical'' merged 5-digit pallet presort destination. 
This 5% threshold summary must show for each 5-digit ZIP Code on the 
logical merged 5-digit scheme or logical merged 5-digit pallet (1) the 
total number of pieces on the pallet for the 5-digit ZIP Code (2) the 
total number of pieces sorted in carrier route packages for the 5-digit 
ZIP Code (3) the total number of pieces sorted in 5-digit packages for 
the 5-digit ZIP Code, and (4) of the total number of pieces for the 5-
digit ZIP Code, the percentage of pieces sorted in 5-digit packages for 
that 5-digit ZIP Code. This additional 5% threshold summary must appear 
within the body of the documentation beneath the pallet rate listing 
for the last physical pallet for the logical pallet presort 
destination. Note: If there are two or more physical pallets for the 
same presort destination, for example, the same merged 5-digit pallet 
destination, these two or more physical pallets would be considered as 
one ``logical pallet''. The separate pallet summary must be for the 
mail on all of the physical pallets (the ``logical pallet'') for that 
presort destination.
    l. Portions of the mailing job that cannot be palletized must be 
prepared in sacks under M610, M620, M820, M910 or M920.

2.2  Package Preparation

    Packages placed on pallets must be prepared under the standards in 
M045.

2.3  5% Threshold Standard

    Mailers may place 5-digit packages with carrier route packages on 
the same merged 5-digit pallet under 2.4 or on the same merged 5-digit 
scheme or merged 5-digit pallet under 2.5 if all of the following 
conditions are met:
    a. The number of pieces prepared in 5-digit packages for any single 
5-digit ZIP Code on a logical merged 5-digit or merged 5-digit scheme 
pallet does not exceed 5% of the total number of pieces for the 5-digit 
ZIP Code on the pallet(s) for the presort destination. That is, the 
total number of pieces for a 5-digit ZIP Code in 5-digit and carrier 
route packages must not be greater than the number of pieces in carrier 
route packages divided by 0.95.
    b. The 5% threshold is calculated separately for each 5-digit ZIP 
Code. For example, if a scheme contains 4 different 5-digit ZIP Codes, 
a separate 5% threshold applies to each 5-digit ZIP Code for the scheme 
on a merged 5-digit scheme pallet.
    c. All the mail in a logical 5-digit package must be able to be 
placed on the logical pallet under the 5% rule. A logical 5-digit 
package is all pieces for a mailing (rate level) prepared in a 5-digit 
package or packages for the same 5-digit destination. For each 5-digit 
ZIP Code, it is possible to have a logical 5-digit package of 
automation rate mail and a logical 5-digit package of Presorted rate 
mail. If the total number of pieces in a logical 5-digit package 
exceeds the 5% limit, none of the pieces for that 5-digit package level 
may be placed on a merged 5-digit or merged 5-digit scheme pallet. For 
some ZIP Codes, the total number of pieces prepared in logical 5-digit 
packages (both an automation rate 5-digit package and a Presorted rate 
5-digit package) may exceed 5% of the total mail for that ZIP Code, but 
the number of pieces for an individual automation rate logical 5-digit 
package for that ZIP Code does not exceed the 5% limit nor does an 
individual Presorted rate logical 5-digit package for that ZIP Code 
exceed the 5% limit. In such instances, mailers may choose to place all 
of the pieces in a logical 5-digit package for a single rate category 
on the logical merged 5-digit or merged 5-digit scheme pallet so that 
the 5% threshold is not exceeded.

    Example: If there are a total of 1100 pieces in carrier route 
and 5-digit packages for a 5-digit ZIP Code, a maximum of 55 pieces 
(5%) in 5-digit packages may be placed on a logical merged 5-digit 
or merged 5-digit scheme pallet with carrier route packages for that 
ZIP Code. If for this ZIP Code there are 30 pieces in a logical 
automation rate 5-digit package and 22 pieces in a logical Presorted 
rate package, the mailer could place all the pieces in both the 
logical automation rate and the logical Presorted rate packages on 
the merged 5-digit or merged 5-digit scheme pallet. If for this ZIP 
Code there are 45 pieces in a logical automation rate 5-digit 
package and 23 pieces in a logical Presorted rate 5-digit package, 
the mailer must choose to place either all of the automation rate 
pieces or all of the Presorted rate pieces on the merged 5-digit or 
merged 5-digit scheme pallet with carrier route packages for the 5-
digit ZIP Code. However, if there were 60 pieces in a logical 
automation rate 5-digit package and 32 pieces in a logical Presorted 
rate package, the mailer could only choose to place the pieces in 
the logical Presorted rate package with pieces in carrier route 
packages on the merged 5-digit or merged 5-digit scheme pallet.

    d. If the total number of pieces in both the logical 5-digit 
automation rate package and the logical 5-digit Presorted rate package 
each separately exceed 5% of the total number of pieces for the 5-digit 
ZIP Code, none of the pieces in 5-digit packages may be merged with 
carrier route packages on a merged 5-digit or merged 5-digit scheme 
pallet.

2.4  Pallet Preparation and Labeling Without Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. When sortation under this option is 
performed, mailers must prepare all possible merged 5-digit pallets 
based on the volume of mail to the destination and the 5% threshold 
standards in 2.3. Mailers must label pallets according to the Line 1 
and Line 2 information listed below and under M031.
    a. Merged 5-Digit. Required and permitted only when 5-digit 
packages may be merged with carrier route packages under the 5% 
threshold standard in 2.3. May contain carrier route packages, 
automation rate 5-digit packages, and Presorted rate 5-digit packages. 
The number of pieces in 5-digit packages is limited to 5% of the total 
number of pieces placed on the pallet under 2.3.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D.''
    b. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code when a merged 5-digit 
pallet could not be prepared.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS,'' followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    c. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code that could not be placed on a merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

[[Page 50083]]

    d. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    e. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    f. Destination ASF. Required, except than an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate, automation rate, and/or Presorted rate packages. Sort ADC 
packages to ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601.
    (2) Line 2: ``STD FLTS BMC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

2.5  Optional Pallet Preparation and Labeling With Scheme (L001) 
Sort

    When mailers choose to prepare mail under this option, they must 
prepare pallets of packages in the manner and sequence listed below and 
under M041. When sortation under this option is performed, mailers must 
prepare all merged 5-digit scheme, 5-digit scheme carrier routes, 5-
digit scheme, and merged 5-digit pallets that are possible in the 
mailing based on the volume of mail to the destination using L001 and 
the 5% threshold, as applicable. Mailers must label pallets according 
to the Line 1 and Line 2 information listed below and under M031.
    a. Merged 5-Digit Scheme. Required. Permitted only when 5-digit 
packages for at least one 5-digit ZIP Code in the scheme may be merged 
with carrier route packages under the 5% threshold standard in 2.3. May 
contain carrier route packages for any 5-digit ZIP Code in a single 
scheme listed in L001. May also contain automation rate 5-digit 
packages and Presorted rate 5-digit packages up to a maximum of 5% of 
the total number of pieces for each 5-digit ZIP Code in the scheme 
under 2.3. For 5-digit ZIP Codes not included in a scheme, begin 
preparing pallets under 2.5d (merged 5-digit pallet).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR/5D SCHEME''.
    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for all carrier routes in an L001 scheme when a 
merged 5-digit scheme pallet could not be prepared under 2.5a.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR-RTS SCHEME''.
    c. 5-Digit Scheme. Required. May contain only 5-digit packages of 
automation rate and 5-digit Presorted rate mail for the same 5-digit 
scheme under L001 that could not be placed on a merged 5-digit scheme 
pallet.
    (1) Line 1: use L001, Column B.
    (2) Line 2: STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; followed by ``NONBARCODED'' 
or ``NBC'' if the pallet contains Presorted rate mail; and followed by 
``SCHEME'' or ``SCH.''
    d. Merged 5-Digit. Required. Permitted only when 5-digit packages 
may be merged with carrier route packages under the 5% threshold 
standard in 2.3 for a 5-digit ZIP Code that is not part of an L001 
scheme. May contain carrier route rate packages, automation rate 5-
digit packages, and Presorted rate 5-digit packages. The number of 
pieces in 5-digit packages is limited to 5% of the total number of 
pieces placed on the pallet under 2.3.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D''.
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code that is not part of a 
scheme and for which a merged 5-digit pallet could not be prepared 
under 2.5d.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS'', followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code that is not part of a scheme and that could not be placed on a 
merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    h. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    i. Destination ASF. Required, except than an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate, automation rate, and/or Presorted rate packages. Sort ADC 
packages to ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    j. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601.
    (2) Line 2: ``STD FLTS BMC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

[[Page 50084]]

M940  Merged Palletization of Periodicals and Standard Mail (A) 
Carrier Route and 5-Digit Packages on 5-Digit and 5-Digit Scheme 
Pallets Using Both the City State Product and the 5% Threshold

1.0  PERIODICALS MAIL

1.1  Basic Standards

    Nonletter-size 5-digit packages from an automation rate mailing and 
nonletter-size 5-digit packages from a Presorted rate mailing may be 
placed on the same pallet (a merged 5-digit pallet or a merged 5-digit 
scheme pallet) as carrier route packages of nonletter-size pieces under 
the following conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route mailing, the automation rate 
mailing, and the Presorted rate mailing must be part of the same 
mailing job.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must be nonletter-size.
    d. Mailers must use the Carrier Route Indicators field in the City 
State Product and the 5% limit criteria in 1.4 to prepare the mailing. 
The mailing must be entered no later than 90 days after the release 
date of the City State Product used.
    e. Automation rate 5-digit packages and Presorted rate 5-digit 
packages must be copalletized with carrier route packages on merged 5-
digit or merged 5-digit scheme pallets as follows: (1) for 5-digit ZIP 
Codes with an ``A'' or ``C'' indicator in the Carrier Route Indicators 
field in the City State Product, carrier route and 5-digit packages may 
be merged with no limit on the number of pieces in 5-digit packages 
that are placed on the pallet, and (2) for 5-digit ZIP Codes with a 
``B'' or ``D'' indicator in the Carrier Route Indicators field in the 
City State Product, the pieces in the 5-digit packages must not exceed 
5% of the total number of pieces for each individual 5-digit ZIP Code 
on the pallet as described in 1.4.
    f. If sortation under this section is performed, merged 5-digit 
pallets and merged 5-digit scheme pallets, must be prepared whenever 
there is enough volume of carrier route and 5-digit packages under M041 
to prepare such pallets using the criteria in 1.1e and the sortation 
criteria in 1.5. All possible merged 5-digit scheme, 5-digit scheme 
carrier routes, and 5-digit scheme pallets must be prepared under 1.4 
and 1.5.
    g. The carrier route mailing must meet the eligibility criteria in 
E230, the automation rate mailing must meet the eligibility criteria in 
E240, and the Presorted rate mailing must meet the eligibility criteria 
in E230.
    h. The rates are based on the level of package and the number of 
pieces in the package under E230 and E240.
    i. The packages from each separate mailing must be sorted together 
on pallets (copalletized) under 1.5 using presort software that is 
PAVE-certified.
    j. A complete, signed, appropriate postage statement(s), using the 
correct USPS form or an approved facsimile, must accompany each mailing 
job prepared under these procedures.
    k. In addition to the applicable postage statement(s), 
documentation prepared by PAVE-certified software must be submitted 
with each copalletized mailing job that describes for each pallet 
sortation level and pallet the number of pieces qualifying for each 
applicable carrier route rate, each applicable automation rate, and 
each applicable Presorted rate under P012. A separate 5% threshold 
summary also must be provided under P012 for each ``logical'' merged 5-
digit scheme or ``logical'' merged 5-digit pallet presort destination 
that contains mail for one or more 5-digit ZIP Codes with a ``B'' or 
``D'' indicator in the City State Product. This 5% threshold summary 
must show for each 5-digit ZIP Code with a ``B'' or ``D'' indicator on 
the logical merged 5-digit scheme or logical merged 5-digit pallet (1) 
the total number of pieces on the pallet for the 5-digit ZIP Code (2) 
the total number of pieces sorted in carrier route packages for the 5-
digit ZIP Code (including each firm package eligible for the carrier 
route rate and low-volume carrier route packages) (3) the total number 
of pieces sorted in 5-digit packages for the 5-digit ZIP Code 
(including each firm package eligible for the 5-digit or basic rate and 
low-volume 5-digit packages), and (4) of the total number of pieces for 
the 5-digit ZIP Code, the percentage of pieces sorted in 5-digit 
packages for that 5-digit ZIP Code. This additional 5% threshold 
summary must appear within the body of the documentation beneath the 
pallet rate listing for the last physical pallet for the logical pallet 
presort destination.

    Note: If there are two or more physical pallets for the same 
presort destination, for example, the same merged 5-digit pallet 
destination, these two or more physical pallets would be considered 
as one ``logical pallet''. The separate pallet summary must be for 
the mail on all of the physical pallets (the ``logical pallet'') for 
that presort destination.

    l. Portions of the mailing job that cannot be palletized must be 
prepared in sacks under M200, M820, M910 or M920.

1.2  Package Preparation

    Packages placed on pallets must be prepared under the standards in 
M045.

1.3  Low-Volume Packages on Pallets

    Carrier route and 5-digit packages prepared under M200, M820, and 
M045 that contain fewer than six pieces may be placed on pallets under 
1.5a through 1.5h, when the publisher determines that such preparation 
improves service. Pieces in such low-volume packages must pay the 
applicable basic rate.

1.4  5% Threshold Standard

    For 5-digit ZIP Codes with a ``B'' or ``D'' indicator in the City 
State Product, mailers may place 5-digit packages with carrier route 
packages on the same merged 5-digit scheme or merged 5-digit pallet 
under 1.5 if all of the following conditions are met:
    a. The number of pieces prepared in 5-digit packages for any single 
5-digit ZIP Code with a ``B'' or ``D'' indicator on a logical merged 5-
digit or merged 5-digit scheme pallet does not exceed 5% of the total 
number of pieces for the 5-digit ZIP Code on the logical pallet for the 
presort destination. That is, the total number of pieces for a 5-digit 
ZIP Code in 5-digit and carrier route packages must not be greater than 
the number of pieces in carrier route packages divided by 0.95. (Five-
digit ZIP Codes with an ``A'' or ``C'' indicator are not subject to the 
5% limit.)
    b. The 5% threshold is calculated separately for each 5-digit ZIP 
Code with a ``B'' or ``D'' indicator. For example, if a scheme contains 
four different 5-digit ZIP Codes, a separate 5% threshold applies to 
each 5-digit ZIP Code with a ``B'' or ``D'' indicator for the scheme on 
a merged 5-digit scheme pallet. (Five-digit ZIP Codes with an ``A'' or 
``C'' indicator are not subject to the 5% limit.)
    c. All the mail in a logical 5-digit package for a 5-digit ZIP Code 
with a ``B'' or ``D'' indicator must be able to be placed on the 
logical pallet under the 5% rule. A logical 5-digit package is all 
pieces for a mailing (rate level) prepared in a 5-digit package or 
packages for the same 5-digit destination. For each 5-digit ZIP Code, 
it is possible to have a logical 5-digit package of automation rate 
mail and a logical 5-digit package of Presorted rate mail. If the total 
number of pieces in a logical 5-digit package exceeds the 5% limit, 
none of the pieces for that 5-digit package level may be placed on a 
merged 5-digit or merged 5-digit scheme pallet. For some ZIP Codes, the 
total number of pieces prepared in logical 5-digit packages (both an 
automation rate 5-digit package

[[Page 50085]]

and a Presorted rate 5-digit package) may exceed 5% of the total mail 
for that ZIP Code, but the number of pieces for an individual 
automation rate logical 5-digit package for that ZIP Code does not 
exceed the 5% limit nor does an individual Presorted rate logical 5-
digit package for that ZIP Code exceed the 5% limit. In such instances, 
mailers may choose to place all of the pieces in a logical 5-digit 
package for a single rate category on the logical merged 5-digit or 
merged 5-digit scheme pallet so that the 5% threshold is not exceeded.

    Example: If there are a total of 1,100 pieces in carrier route 
and 5-digit packages for a 5-digit ZIP Code with a ``B'' or ``D'' 
indicator in the City State Product, a maximum of 55 pieces (5%) in 
5-digit packages may be placed on a logical merged 5-digit or merged 
5-digit scheme pallet with carrier route packages for that ZIP Code. 
If for this ZIP Code there are 30 pieces in a logical automation 
rate 5-digit package and 22 pieces in a logical Presorted rate 
package, the mailer could place all the pieces in both the logical 
automation rate and the logical Presorted rate packages on the 
merged 5-digit or merged 5-digit scheme pallet. If for this ZIP Code 
there are 45 pieces in a logical automation rate 5-digit package and 
23 pieces in a logical Presorted rate 5-digit package, the mailer 
will choose to place either all of the automation rate pieces or all 
of the Presorted rate pieces on the merged 5-digit or merged 5-digit 
scheme pallet with carrier route packages for the 5-digit ZIP Code. 
However, if there were 60 pieces in a logical automation rate 5-
digit package and 32 pieces in a logical Presorted rate package, the 
mailer could only choose to place the pieces in the logical 
Presorted rate package with pieces in carrier route packages on the 
merged 5-digit or merged 5-digit scheme pallet.

    d. If the total number of pieces in both the logical 5-digit 
automation rate package and the logical 5-digit Presorted rate package 
each separately exceed 5% of the total number of pieces for the 5-digit 
ZIP Code with a ``B'' or ``D'' indicator, none of the pieces in 5-digit 
packages may be merged with carrier route packages on a merged 5-digit 
or merged 5-digit scheme pallet.
    e. Pieces in low-volume carrier route packages will count as 
carrier route sorted pieces for purposes of determining the 5% limit 
under 1.4a through 1.4d even though the basic rate is paid. Pieces in 
low-volume 5-digit packages will count as 5-digit sorted pieces for 
purposes of determining the 5% limit under 1.4a through 1.4d even 
though the basic rate is paid.
    f. Copies in firm packages claimed as one piece for rate purposes 
will be considered a single piece when performing the 5% limit 
calculation under 1.4a through 1.4d. As provided in M200.1.4, some firm 
packages claimed as one piece may be eligible for carrier route rates, 
5-digit rates, or basic rates. The sortation level of each firm piece 
(package) for purposes of applying the 5% limit will be considered to 
be carrier route if the firm piece (package) is eligible for the 
carrier route rate under M200.1.4. Otherwise the firm package will be 
considered to be a 5-digit sorted piece (even if the basic rate must be 
paid on that piece).

1.5  Pallet Preparation and Labeling With Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. Mailers must prepare all merged 5-digit 
scheme, 5-digit scheme carrier routes, 5-digit scheme, and merged 5-
digit pallets that are possible in the mailing based on the volume of 
mail to the destination (M041) using L001, the City State Product, and 
the 5% threshold (1.4), as applicable. Mailers must label pallets 
according to the Line 1 and Line 2 information listed below and under 
M031. If, due to the physical size of the mailpieces, the automation 
rate pieces are considered flat-size under C820 and the carrier route 
sorted pieces and Presorted rate pieces are considered irregular 
parcels under C050, ``FLTS'' must be shown as the processing category 
shown on the pallet label. If a mailing contains no automation rate 
pieces and the carrier route mailing and the Presorted rate mailing are 
irregular parcel shaped, use ``IRREG'' for the processing category on 
the contents line of the pallet label.
    a. Merged 5-Digit Scheme. Required. For schemes that contain at 
least one 5-digit ZIP Code that has an ``A'' or ``C'' indicator in the 
City State Product, the pallet contains (1) Carrier route packages for 
all 5-digit ZIP Codes in the scheme, (2) 5-digit automation rate and 5-
digit Presorted rate packages for those 5-digit ZIP Codes in the scheme 
with an ``A'' or ``C'' indicator in the City State Product, and (3) 5-
digit automation rate and/or 5-digit Presorted rate packages for those 
5-digit ZIP Codes in the scheme with a ``B'' or ``D'' indicator when 
the number of pieces in the 5-digit package(s) does not exceed 5% of 
the total number of pieces for that 5-digit ZIP Code under 1.4. For 
schemes in which all 5-digit ZIP Codes have ``B'' or ``D'' indicators 
and for which there is at least one 5-digit ZIP Code for which 5-digit 
packages may be placed on the pallet under the 5% limit in 1.4, place 
all carrier route packages plus the 5-digit packages within the 5% 
limit on the pallet. For schemes in which all 5-digit ZIP Codes have 
``B'' or ``D'' indicators and for which there are no 5-digit ZIP Codes 
for which 5-digit packages may be placed on the pallet under the 5% 
limit, do not prepare a merged 5-digit scheme pallet (sort packages to 
pallets under 1.5b through 1.5i).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D SCHEME.''
    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for all carrier routes in an L001 scheme for 
which all 5-digit ZIP Codes in the scheme have a ``B'' or ``D'' 
indicator and for which no 5-digit packages could be placed on a merged 
5-digit scheme pallet with the carrier route packages because the 5-
digit packages exceeded the 5% threshold.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR-RTS SCHEME.''
    c. 5-Digit Scheme. Required. May contain only 5-digit packages of 
automation rate and Presorted rate mail for the same 5-digit scheme 
under L001 for which one or more 5-digit ZIP Codes in the scheme had a 
``B'' or ``D'' indicator in the City State Product, and the 5-digit 
packages could not be placed on a merged 5-digit scheme pallet (the 
pieces exceeded the 5% threshold).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail; and followed by ``SCHEME'' or ``SCH''.
    d. Merged 5-Digit. Required. May contain carrier route packages, 
automation rate 5-digit packages, and Presorted rate 5-digit packages 
for those 5-digit ZIP Codes that are not part of a scheme. For 5-digit 
ZIP Codes with an ``A'' or ``C'' indicator in the City State Product, 
there is no limit on the number of pieces in 5-digit packages that may 
be placed on the pallet and a merged 5-digit pallet is prepared even if 
there are no 5-digit packages for that ZIP Code. For those 5-digit ZIP 
Codes with a ``B'' or ``D'' indicator in the City State Product, the 
number of pieces in 5-digit packages is limited to 5% of the total 
number of pieces for the 5-digit pallet destination under 1.4. However, 
if no 5-digit packages for ZIP Codes with ``B'' or ``D'' indicators can 
be placed on this level pallet under the 5% limit, do not prepare this 
a merged 5-digit pallet (sort packages under 1.5e through 1.5i).

[[Page 50086]]

    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CR/5D.''
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code that is not part of a 
scheme and that could not be placed on a merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; and followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code that is not part of a scheme and that could not be placed on a 
merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``5D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``3D''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    h. SCF. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``SCF''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
    i. ADC. Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L004.
    (2) Line 2: ``PER'' or ``NEWS'' as applicable; followed by ``FLTS'' 
or ``IRREG'' as applicable; followed by ``ADC''; followed by 
``BARCODED'' or ``BC'' if the pallet contains automation rate mail; and 
followed by ``NONBARCODED'' or ``NBC'' if the pallet contains Presorted 
rate mail.
2.0  STANDARD MAIL (A)

2.1  Basic Standards

    Flat-size 5-digit packages from an automation rate mailing and 
flat-size 5-digit packages from a Presorted rate mailing may be placed 
on the same pallet (a merged 5-digit pallet or a merged 5-digit scheme 
pallet) as carrier route packages of flat-size pieces under the 
following conditions:
    a. A carrier route mailing must be part of the mailing job.
    b. The pieces in the carrier route rate mailing, the automation 
rate mailing, and the Presorted rate mailing must be part of the same 
mailing job, and all three mailings must be reported on the same 
postage statement or same consolidated postage statement.
    c. Pieces in the automation rate mailing must meet the criteria for 
a flat under C050.3.2 and C820. Pieces in the Presorted rate mailing 
and the carrier route mailing must meet the criteria for a flat under 
C050.3.1.
    d. Mailers must use the Carrier Route Indicators field in the City 
State Product and the 5% limit criteria in 2.3 to prepare the mailing. 
The mailing must be entered no later than 90 days after the release 
date of the City State Product used.
    e. Automation rate 5-digit packages and Presorted rate 5-digit 
packages must be copalletized with carrier route packages on merged 5-
digit or merged 5-digit scheme pallets as follows: (1) For 5-digit ZIP 
Codes with an ``A'' or ``C'' indicator in the Carrier Route Indicators 
field in the City State Product, carrier route and 5-digit packages may 
be merged with no limit on the number of pieces in 5-digit packages 
that are placed on the pallet, and (2) for 5-digit ZIP Codes with a 
``B'' or ``D'' indicator in the Carrier Route Indicators field in the 
City State Product, the pieces in the 5-digit packages must not exceed 
5% of the total number of pieces for each individual 5-digit ZIP Code 
on the pallet as described in 2.3.
    f. If sortation under this section is performed, merged 5-digit 
pallets and, if sorting under 2.5, merged 5-digit scheme pallets, must 
be prepared whenever there is enough volume of carrier route and 5-
digit packages under M041 to prepare such pallets using the criteria in 
2.1e and the sortation criteria in either 2.4 or 2.5. When mailers 
choose to sort to L001 under 2.5, all possible merged 5-digit scheme, 
5-digit scheme carrier routes, and 5-digit scheme pallets must be 
prepared under 2.3 and 2.5.
    g. The carrier route mailing must meet the eligibility criteria in 
E620, the automation rate mailing must meet the eligibility criteria in 
E640, and the Presorted rate mailing must meet the eligibility criteria 
in E620.
    h. The rates are based on the level of package that the pieces are 
contained in under E620 and E640.
    i. The pieces in each separate mailing must bear the applicable 
markings required under M610, M620, or M820 and under M012.
    j. The packages from each separate mailing must be sorted together 
on pallets (copalletized) under 2.4 or 2.5 using presort software that 
is PAVE-certified or MAC-certified.
    k. A complete, signed, appropriate postage statement or 
consolidated postage statement, using the correct USPS form or an 
approved facsimile, must accompany each mailing job prepared under 
these procedures.
    l. In addition to the applicable postage statement, documentation 
prepared by PAVE-certified or MAC-certified software must be submitted 
with each copalletized mailing job that describes for each pallet 
sortation level and pallet the number of pieces qualifying for each 
applicable carrier route rate, each applicable automation rate, and 
each applicable Presorted rate under P012. A separate 5% threshold 
summary also must be provided under P012 for each ``logical'' merged 5-
digit scheme or ``logical'' merged 5-digit pallet presort destination 
that contains mail for one or more 5-digit ZIP Codes with a ``B'' or 
``D'' indicator in the City State Product. This 5% threshold summary 
must show for each 5-digit ZIP Code with a ``B'' or ``D'' indicator on 
the logical merged 5-digit scheme or logical merged 5-digit pallet (1) 
The total number of pieces on the pallet for the 5-digit ZIP Code (2) 
the total number of pieces sorted in carrier route packages for the 5-
digit ZIP Code (3) the total number of pieces sorted in 5-digit 
packages for the 5-digit ZIP Code, and (4) of the total number of 
pieces for the 5-digit ZIP Code, the percentage of pieces sorted in 5-
digit packages for that 5-digit ZIP Code. This additional 5% threshold 
summary must appear within the body of the documentation beneath the 
pallet rate listing for the last physical pallet for the logical pallet 
presort destination.

    Note: If there are two or more physical pallets for the same 
presort destination, for example, the same merged 5-digit pallet 
destination, these two or more physical pallets would be considered 
as one ``logical pallet''. The separate pallet summary must be

[[Page 50087]]

for the mail on all of the physical pallets (the ``logical pallet'') 
for that presort destination.

    m. Portions of the mailing job that cannot be palletized must be 
prepared in sacks under M610, M620, M820, M910 or M920.

2.2  Package Preparation

    Packages placed on pallets must be prepared under the standards in 
M045.

2.3  5% Threshold Standard

    For 5-digit ZIP Codes with a ``B'' or ``D'' indicator in the City 
State Product, mailers may place 5-digit packages with carrier route 
packages on the same merged 5-digit pallet under 2.4 or on the same 
merged 5-digit scheme or merged 5-digit pallet under 2.5 if all of the 
following conditions are met:
    a. The number of pieces prepared in 5-digit packages for any single 
5-digit ZIP Code with a ``B'' or ``D'' indicator on a logical merged 5-
digit or merged 5-digit scheme pallet does not exceed 5% of the total 
number of pieces for the 5-digit ZIP Code on the pallet(s) for the 
presort destination. That is, the total number of pieces for a 5-digit 
ZIP Code in 5-digit and carrier route packages must not be greater than 
the number of pieces in carrier route packages divided by 0.95. (Five-
digit ZIP Codes with an ``A'' or ``C'' indicator are not subject to the 
5% limit.)
    b. The 5% threshold is calculated separately for each 5-digit ZIP 
Code with a ``B'' or ``D'' indicator. For example, if a scheme contains 
four different 5-digit ZIP Codes, a separate 5% threshold applies to 
each 5-digit ZIP Code with a ``B'' or ``D'' indicator for the scheme on 
a merged 5-digit scheme pallet. (Five-digit ZIP Codes with an ``A'' or 
``C'' indicator are not subject to the 5% limit.)
    c. All the mail in a logical 5-digit package for a 5-digit ZIP Code 
with a ``B'' or ``D'' indicator must be able to be placed on the 
logical pallet under the 5% rule. A logical 5-digit package is all 
pieces for a mailing (rate level) prepared in a 5-digit package or 
packages for the same 5-digit destination. For each 5-digit ZIP Code, 
it is possible to have a logical 5-digit package of automation rate 
mail and a logical 5-digit package of Presorted rate mail. If the total 
number of pieces in a logical 5-digit package exceeds the 5% limit, 
none of the pieces for that 5-digit package level may be placed on a 
merged 5-digit or merged 5-digit scheme pallet. For some ZIP Codes, the 
total number of pieces prepared in logical 5-digit packages (both an 
automation rate logical 5-digit package and a Presorted rate logical 5-
digit package) may exceed 5% of the total mail for that ZIP Code, but 
the number of pieces for an individual automation rate logical 5-digit 
package for that ZIP Code does not exceed the 5% limit nor does an 
individual Presorted rate logical 5-digit package for that ZIP Code 
exceed the 5% limit. In such instances, mailers may choose to place all 
of the pieces in a logical 5-digit package for a single rate category 
on the logical merged 5-digit or merged 5-digit scheme pallet so that 
the 5% threshold is not exceeded.

    Example: If there are a total of 1,100 pieces in carrier route 
and 5-digit packages for a 5-digit ZIP Code with a ``B'' or ``D'' 
indicator in the City State Product, a maximum of 55 pieces (5%) in 
5-digit packages may be placed on a logical merged 5-digit or merged 
5-digit scheme pallet with carrier route packages for that ZIP Code. 
If for this ZIP Code there are 30 pieces in a logical automation 
rate 5-digit package and 22 pieces in a logical Presorted rate 
package, the mailer could place all the pieces in both the logical 
automation rate and the logical Presorted rate packages on the 
merged 5-digit or merged 5-digit scheme pallet. If for this ZIP Code 
there are 45 pieces in a logical automation rate 5-digit package and 
23 pieces in a logical Presorted rate 5-digit package, the mailer 
will choose to place either all of the automation rate pieces or all 
of the Presorted rate pieces on the merged 5-digit or merged 5-digit 
scheme pallet with carrier route packages for the 5-digit ZIP Code. 
However, if there are 60 pieces in a logical automation rate 5-digit 
package and 32 pieces in a logical Presorted rate package, the 
mailer could only choose to place the pieces in the logical 
Presorted rate package with pieces in carrier route packages on the 
merged 5-digit or merged 5-digit scheme pallet. If for this ZIP Code 
there are 30 pieces in a logical automation rate 5-digit package and 
22 pieces in a logical Presorted rate package, the mailer could 
place all the pieces in both the logical automation rate and the 
logical Presorted rate packages on the merged 5-digit or merged 5-
digit scheme pallet.

    d. If the total number of pieces in both the logical 5-digit 
automation rate package and the logical 5-digit Presorted rate package 
each separately exceed 5% of the total number of pieces for the 5-digit 
ZIP Code with a ``B'' or ``D'' indicator, none of the pieces in 5-digit 
packages may be merged with carrier route packages on a merged 5-digit 
or merged 5-digit scheme pallet.

2.4  Pallet Preparation and Labeling Without Scheme (L001) Sort

    Mailers must prepare pallets of packages in the manner and sequence 
listed below and under M041. When sortation under this option is 
performed, mailers must prepare all merged 5-digit pallets that are 
possible in the mailing based on the volume of mail to the destination 
under M041, the City State Product, and the 5% threshold. Mailers must 
label pallets according to the Line 1 and Line 2 information listed 
below and under M031.
    a. Merged 5-Digit. Required. May contain carrier route packages, 
automation rate 5-digit packages, and Presorted rate 5-digit packages. 
For those 5-digit ZIP Codes with an ``A'' or ``C'' indicator in the 
City State Product, there is no limit on the number of pieces in 5-
digit packages that may be placed on the pallet, and a merged 5-digit 
pallet is prepared even if there are no 5-digit packages for such a 5-
digit ZIP Code. For those 5-digit ZIP Codes with a ``B'' or ``D'' 
indicator in the City State Product, the number of pieces in 5-digit 
packages is limited to 5% of the total number of pieces for the 5-digit 
pallet destination under 2.3. For 5-digit ZIP Codes with a ``B'' or 
``D'' indicator in the City State Product, if there are either no 5-
digit packages for that ZIP Code, or the number of pieces in 5-digit 
packages for that ZIP Code exceeds the 5% limit, do not prepare a 
merged 5-digit pallet (sort packages under 2.4b through 2.4f).
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D.''
    b. 5-Digit Carrier Routes. Required. May contain only carrier route 
packages for the same 5-digit ZIP Code for ZIP Codes with a ``B'' or 
``D'' indicator for which a merged 5-digit pallet could not be 
prepared.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS,'' followed by ``CARRIER ROUTES'' or ``CR-
RTS.''
    c. 5-Digit. Required. May contain only automation rate and 
Presorted rate 5-digit packages for the same 5-digit ZIP Code for ZIP 
Codes with a ``B'' or ``D'' indicator for which a merged 5-digit pallet 
could not be prepared.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    d. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

[[Page 50088]]

    e. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    f. Destination ASF. Required, except than an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate, automation rate, and/or Presorted rate packages. Sort ADC 
packages to ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601.
    (2) Line 2: ``STD FLTS BMC''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

2.5  Optional Pallet Preparation and Labeling With Scheme (L001) 
Sort

    When mailers choose to prepare mail under this option, they must 
prepare pallets of packages in the manner and sequence listed below and 
under M041. When sortation under this option is performed, mailers must 
prepare all merged 5-digit scheme, 5-digit scheme carrier routes, 5-
digit scheme, and merged 5-digit pallets that are possible in the 
mailing based on the volume of mail to the destination (M041) using 
L001, the City State Product, and the 5% threshold (2.3), as 
applicable. Mailers must label pallets according to the Line 1 and Line 
2 information listed below and under M031.
    a. Merged 5-Digit Scheme. Required. For schemes that contain at 
least one 5-digit ZIP Code that has an ``A'' or ``C'' indicator in the 
City State Product, the pallet contains (1) carrier route packages for 
all 5-digit ZIP Codes in the scheme, (2) 5-digit automation rate and 5-
digit Presorted rate packages for those 5-digit ZIP Codes in the scheme 
with an ``A'' or ``C'' indicator in the City State Product, and (3) 5-
digit automation rate and/or 5-digit Presorted rate packages for those 
5-digit ZIP Codes in the scheme with a ``B'' or ``D'' indicator when 
the number of pieces in the 5-digit package(s) does not exceed 5% of 
the total number of pieces for that 5-digit ZIP Code under 2.3. For 
schemes in which all 5-digit ZIP Codes have ``B'' or ``D'' indicators 
and for which there is at least one 5-digit ZIP Code for which 5-digit 
packages may be placed on the pallet under the 5% limit in 2.3, place 
all carrier route packages plus the 5-digit packages within the 5% 
limit on the pallet. For schemes in which all 5-digit ZIP Codes have 
``B'' or ``D'' indicators and for which there are no 5-digit ZIP Codes 
for which 5-digit packages may be placed on the pallet under the 5% 
limit, do not prepare a merged 5-digit scheme pallet (sort packages to 
pallets under 2.5b through 2.5j).
    (1) Line 1: labeling: use L001, Column B.
    (2) Line 2: ``STD FLTS CR/5D SCHEME''.
    b. 5-Digit Scheme Carrier Routes. Required. May contain only 
carrier route packages for all carrier routes in an L001 scheme for 
which all 5-digit ZIP Codes in the scheme have a ``B'' or ``D'' 
indicator and for which no 5-digit packages could be placed on a merged 
5-digit scheme pallet with the carrier route packages because the 5-
digit packages exceeded the 5% threshold.
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS CR-RTS SCHEME''.
    c. 5-Digit Scheme. Required. May contain 5-digit packages of 
automation rate and 5-digit Presorted rate mail for the same 5-digit 
scheme under L001 for which one or more 5-digit ZIP Codes in the scheme 
had a ``B'' or ``D'' indicator in the City State Product, and the 5-
digit packages could not be placed on a merged 5-digit scheme pallet 
(the pieces exceeded the 5% threshold).
    (1) Line 1: use L001, Column B.
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; followed by ``NONBARCODED'' 
or ``NBC'' if the pallet contains Presorted rate mail; and followed by 
``SCHEME'' or ``SCH''.
    d. Merged 5-Digit. Required. May contain carrier route packages, 
automation rate 5-digit packages, and Presorted rate 5-digit packages 
for those 5-digit ZIP Codes that are not part of a scheme. For 5-digit 
ZIP Codes with an ``A'' or ``C'' indicator in the City State Product, 
there is no limit on the number of pieces in 5-digit packages that may 
be placed on the pallet, and a merged 5-digit pallet is prepared even 
if there are no 5-digit packages for that ZIP Code. For those 5-digit 
ZIP Codes with a ``B'' or ``D'' indicator in the City State Product, 
the number of pieces in 5-digit packages is limited to 5% of the total 
number of pieces for the 5-digit pallet destination under 2.3. However, 
if no 5-digit packages for ZIP Codes with ``B'' or ``D'' indicators can 
be placed on this level pallet under the 5% limit, do not prepare a 
merged 5-digit pallet (sort packages to pallets under 2.5e through 
2.5j).
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS CR/5D''.
    e. 5-Digit Carrier Routes. Required. May contain only carrier route 
rate packages for the same 5-digit ZIP Code that is not part of a 
scheme and that could not be placed on a merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS'', followed by ``CARRIER ROUTES'' or ``CR-
RTS''.
    f. 5-Digit. Required. May contain only automation rate 5-digit 
packages and Presorted rate 5-digit packages for the same 5-digit ZIP 
Code that is not part of a scheme and that could not be placed on a 
merged 5-digit pallet.
    (1) Line 1: use city, state abbreviation, and 5-digit ZIP Code 
destination (see M031 for military mail).
    (2) Line 2: ``STD FLTS 5D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    g. 3-Digit. Optional. May contain carrier route rate, automation 
rate, and Presorted rate packages.
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``STD FLTS 3D''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    h. SCF: Required. May contain carrier route rate, automation rate, 
and Presorted rate packages.
    (1) Line 1: use L002, Column C.
    (2) Line 2: ``STD FLTS SCF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    i. Destination ASF. Required, except than an ASF sort may not be 
required if using package reallocation under 6.0. May contain carrier 
route rate,

[[Page 50089]]

automation rate, and/or Presorted rate packages. Sort ADC packages to 
ASF pallets based on the ``label to'' ZIP Code for the ADC destination 
of the package in L004. See E651 for additional requirements for DBMC 
rate eligibility.
    (1) Line 1: use L602.
    (2) Line 2: ``STD FLTS ASF''; followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.
    j. Destination BMC: Required. May contain carrier route rate, 
automation rate, and/or Presorted rate packages. Sort ADC packages to 
BMC and ASF pallets based on the ``label to'' ZIP Code for the ADC 
destination of the package in L004. See E651 for additional 
requirements for DBMC rate eligibility.
    (1) Line 1: Use L601
    (2) Line 2: ``STD FLTS BMC'', followed by ``BARCODED'' or ``BC'' if 
the pallet contains automation rate mail; and followed by 
``NONBARCODED'' or ``NBC'' if the pallet contains Presorted rate mail.

P  Postage and Payment Methods

P000  Basic Information

* * * * *

P012  Documentation

* * * * *
2.0  STANDARDIZED DOCUMENTATION--FIRST-CLASS MAIL, PERIODICALS, AND 
STANDARD MAIL (A)
* * * * *

2.2  Format and Content

    [Amend 2.2d by adding the following as (5) to read as follows:]
    For First-Class Mail, Periodicals, and Standard Mail (A), 
standardized documentation includes:
* * * * *
    d. For packages on pallets, the body of the listing reporting these 
required elements:
* * * * *
    (5) For mailings prepared as packages on pallets under M930 and 
M940 a separate 5% threshold summary must appear beneath the pallet 
rate summary for the last physical pallet of each logical merged 5-
digit scheme pallet and logical merged 5-digit pallet as provided in 
M930.1.1, M930.2.1, M940.1.1, or M940.2.1, as applicable.
* * * * *

2.4  Sortation level

    [Amend 2.4 by adding new indicator ``M5D'' to identify merged 5-
digit sacks and pallets, by adding new indicator ``M5DS'' to identify 
merged 5-digit scheme sacks and pallets, and by adding ``and pallets'' 
to the description of the sortation level for 5-digit scheme carrier 
routes to read as follows:]
    The actual sortation level (or corresponding abbreviation) is used 
for the package, tray, sack, or pallet levels required by 2.2 and shown 
below:

------------------------------------------------------------------------
             Sortation level                        Abbreviation
------------------------------------------------------------------------
 
                  *        *        *        *        *
5-Digit Scheme Carrier Routes (sacks and   CR5S
 pallets, Periodicals flats and irregular
 parcels, Standard Mail (A) flats).
 
                  *        *        *        *        *
Merged 5-Digit (sacks and pallets,         M5D
 Periodicals flats and irregular parcels,
 Standard Mail (A) flats).
Merged 5-Digit Scheme (sacks and pallets,  M5DS
 Periodicals flats and irregular parcels,
 Standard Mail (A) flats).
 
                  *        *        *        *        *
------------------------------------------------------------------------

    [Amend the heading of 2.5 to read as follows:]

2.5  Combined, Copalletized, and Merged Mailings

    [Amend the first sentence of 2.5 by changing ``M045'' to ``M045, 
M920, M930, or M940.'']
* * * * *
    An appropriate amendment to 39 CFR 111.3 will be published to 
reflect these changes.

Neva Watson,
Attorney, Legislative.
[FR Doc. 00-20324 Filed 8-15-00; 8:45 am]
BILLING CODE 7710-12-U