[Federal Register Volume 66, Number 121 (Friday, June 22, 2001)]
[Rules and Regulations]
[Pages 33472-33475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-15771]


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POSTAL SERVICE

39 CFR Part 111


Presorted Priority Mail Experiment

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM) 
standards to be adopted by the Postal Service to conduct the presorted 
Priority Mail experiment pursuant to the Decision of the Governors of 
the United States Postal Service on the Opinion and Recommended 
Decision of the Postal Rate Commission (PRC) in Docket No. MC2001-1, 
experimental rate categories for presorted Priority Mail.
    On March 7, 2001, the Postal Service filed a request before the 
Postal Rate Commission (PRC) requesting the establishment of 
experimental classifications and discounts for presorted Priority Mail. 
On May 25, 2001, the PRC issued a favorable Opinion and Recommended 
Decision. The Governors approved that action on June 4, 2001. The 
experiment will begin July 15, 2001, and is expected to be conducted 
for at least two years. Participation in the first year of the 
experiment will be limited to approximately 10 mailer locations. For 
application and information see Postal Bulletin 22051 (5-31-01).

EFFECTIVE DATE: July 15, 2001.

FOR FURTHER INFORMATION CONTACT: Karen A. Magazino, (703) 292-3644, or 
Michael T. Tidwell, (202) 268-2998.

SUPPLEMENTARY INFORMATION: The Postal Service will review applications 
and select approximately 10 mailer locations to participate in the 
experiment. To receive the experimental discounts, selected mailers 
must meet certain containerization and mail preparation requirements in 
addition to various other criteria. It is desired that the Priority 
Mail shipped by the participants will represent a diverse range of 
shapes and weights. The limitation on the number of participants in the 
experiment is consistent with the need to conduct an experiment that 
can be managed effectively and enables the Postal Service to work with 
each participant on a one-on-one basis, determining the best method of 
containerization and preparation. To receive the experimental 
discounts, mailers also must meet the experiment's data collection 
requirements. Specific containerization and preparation requirements 
could vary from mailer to mailer due to the mailer's geographical 
location and mail densities. Since this is an experiment, the Postal 
Service will be able to reasonably adjust the requirements during the 
experiment. The Postal Service and selected participants will work with 
postal transportation networks to determine the appropriate surface and 
air transportation destinations. Prior to implementation, the selected 
participant and the Postal Service will incorporate the terms and 
conditions of participation into a Service Agreement that will be 
authorized and signed by both parties.
    Mailers may choose from the following three presort levels and 
corresponding per-piece discounts:

------------------------------------------------------------------------
                                                              Per-Piece
                       Presort Level                           Discount
------------------------------------------------------------------------
5-Digit....................................................        $0.25
3-Digit....................................................         0.16
Area Distribution Center (ADC).............................         0.12
------------------------------------------------------------------------

    The discounts apply equally to letters, flats, and parcels 
(machineable and irregulars), including outside parcels when using 
surface transportation.
    As selection criteria for the experiment, the Postal Service will 
seek mailers of diverse size, mailing locations, and mailpiece 
characteristics. Mailers must be prepared to work closely with business 
mail acceptance and logistics personnel to coordinate mail preparation 
and containerization and also must be prepared to meet the data 
collection requirements of the experiment. In addition, the Postal 
Service prefers mailers who will present presorted Priority Mail 
mailings on a regular and continuing basis.
    A Presorted Priority Mail Experiment Management Team will select 
participants and administer the experiment. The team will include a 
representative from each of two functional groups within the Pricing 
and Product Design department: Mail Preparation and Standards, and 
Pricing. The other members of the team will be a representative from 
Operational

[[Page 33473]]

Requirements, an office within the Operations Planning and Processing 
organization; a representative from Special Studies, a section of the 
Finance organization; and a representative from Expedited/Package 
Services (E/PS). All decisions of the team are final.
    Existing Priority Mail classifications will remain unchanged.
    Mailers selected for participation must abide by the terms of a 
Presorted Priority Mail Experiment Service Agreement. The following 
requirements will also apply:

Mailing Standards

    1. Each mailing must contain a minimum of either 300 pieces or 500 
pounds regardless of the mail processing categories. Residual pieces 
are included in the minimum volume requirement.
    2. An annual Priority Mail presort fee of $125.00 must be paid at 
each mailing location.
    3. Postage must be paid by either permit imprint or meter stamp.
    4. Two copies of the applicable alternative Postage Statement (PS 
Form 3600-PMRX or PS Form 3600-PMPX) must be completed and submitted to 
the office of mailing. When presenting different mail processing 
categories in one mailing, separate postage statements must be 
completed for each mail processing category (shape) and collectively 
count towards the minimum volume requirement.
    5. Mailings may contain non-identical-weight pieces only if the 
correct metered postage is affixed to each piece or if the RCSC serving 
the post office of mailing has authorized payment of postage by permit 
imprint under Manifest Mailing System, DMM P910.

Container and Presort Preparation

    1. Three optional levels of presort will be available: ADC, 3-
digit, and 5-digit. Mailers can use any or all of the three presort 
options. The ADC list will be provided by the Postal Service; mailers 
may not use DMM L603 or L604.
    2. Mail processing categories (letters and flats in trays, loose 
sackable parcels, and outside parcels) may be combined in the same 
pallet/pallet box at the 5-digit level for surface transportation. 
Letters and flats in trays and parcels in sacks may be combined on the 
same pallet at the 3-digit and ADC levels for surface transportation 
destinations. Overflow trays or sacks are not permitted.
    3. Residual pieces will not receive a discount and will be charged 
the single-piece rate. These pieces must be containerized in sacks or 
on pallets, depending on volume. The residual pieces count toward the 
minimum volume requirements.

Containerization Requirements

    1. Priority Mail letters (DMM C050.2) and flats (DMM C050.3.1) must 
be uniform in thickness and have a smooth and regular shape. Letters 
and flats must be prepared in full flat trays or meet the minimum 
requirement of 25 pounds per tray. A full tray is to the bottom of the 
hand holds. An optional preparation will be available for loose flats 
shrink-wrapped onto pallets for destinations that have surface 
transportation from the origin. A minimum volume of 250 pounds per 
pallet will be required. This will be specified within each Service 
Agreement.
    2. Flat trays must be capped, green side up, strapped, and labeled 
with an orange label with a barcode in accordance with DMM M033.1.5b. 
Content Identifier Numbers (CINS) are provided.
    3. Parcels (DMM C050.4 and C050.5), excluding outside parcels, are 
not letter size or flat size, must be uniform in thickness with a 
smooth and regular shape, are greater than \3/4\" thick, and can fit 
into an orange Priority Mail sack. Parcels must be placed in sacks for 
all destinations with air transportation. The minimum volume per sack 
is 10 pieces. There will be an optional preparation to place parcels 
directly on pallets or in pallet boxes (DMM M041.4.0) for destinations 
with surface transportation from origin. A minimum volume of 250 pounds 
per pallet will be required. This requirement will be specified within 
each Service Agreement.
    4. Outside parcels (C050.6) include any mailpiece that does not fit 
into a Priority Mail sack, or any parcel that weighs over 35 pounds, 
including live animals, hazardous materials, and other items specified 
in C050.0. These parcels may be combined with other presorted Priority 
Mail if sorted to 5-digit destinations only. Outside parcels are not 
eligible for the presorted trays or sacks of Priority Mail discount 
rates to destinations requiring air transportation. This eligibility 
criteria will be specified within each Service Agreement.
    5. Any alternative preparation or localized containerization of 
Presorted Priority Mailings will be specified within each Service 
Agreement.
    6. Pallets must be identified with orange placards containing 
destination information, mail processing category (e.g., flats, 
parcels), and presort level, as specified in the Service Agreement.
    An application for participation in this experiment appears in 
Postal Bulletin 22051 (5-31-01), available online at http://ribbs.usps.gov.
    Mailers may send a completed application via e-mail to 
[email protected]; via fax to 703-292-4058; or via mail to: Manager 
Mail Preparation and Standards, US Postal Service, 1735 N. Lynn St., Rm 
3025,Arlington, VA 22209-6038.
    Because of the purpose and limited scope of this experiment, the 
Postal Service finds no need to solicit comment on the standards for 
presorted Priority Mail or to delay implementation of this experiment.

List of Subjects in 39 CFR Part 111

    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 Domestic Mail Manual (DMM) as set forth below:

G GENERAL INFORMATION

G000  The USPS and Mailing Standards

* * * * *

G090  Experimental Classifications and Rates

* * * * *
    [Add new G095 to read as follows:]

G095  Presorted Priority Mail

1.0  ELIGIBILITY

1.1  Description

    The standards in G095 apply to mailings that are produced by 
mailers with an approved Presorted Priority Mail Experiment Service 
Agreement.

1.2  Application

    The Presorted Priority Mail rate applies to pieces meeting the 
standards in G095.

1.3  Mailing

    Each mailing must:
    a. Contain at least 300 pieces or 500 pounds.
    b. Be presented with the correct postage statement.
    c. An annual presort Priority Mail fee of $125.00 must be paid each 
12-month period at each post office of mailing.

[[Page 33474]]

1.4  Preparation

    Each piece in the mailing must be marked, prepared, documented, and 
presorted as specified in G095.

1.5  All Pieces

    Each presorted Priority Mail mailing must meet the applicable 
standards in E120 and in M010 and M030. Each presorted Priority Mail 
mailing must be presented under the standards below. Subject to M012, 
all pieces must be marked ``Presorted Priority Mail'' or ``Presorted 
Priority.'' Mailers may abbreviate presorted with ``PRSRT.'' Markings 
must be placed on the addressed side of the mailpiece.

1.6  Applicability

    Presorted Priority Mail pieces must:
    a. Meet the applicable standards for letters in C050.2, flats in 
C050.3.1, parcels in C050.4 and C050.5, or outside parcels in C050.6. 
In addition, flats must be uniform in thickness and have a smooth and 
regular shape.
    b. Meet the basic addressing standards in A010 and E130.3 and bear 
a delivery address with the correct 5-digit ZIP Code.
    c. Be marked as specified in 1.5 and comply with USPS mailing 
standards.
    d. Meet the documentation and postage payment standards (permit 
imprint or meter stamps) in the service agreement.
    e. Be received at the post office that serves the permit holder.
    f. An annual Priority Mail presort fee of $125.00 must be paid at 
each location where the mail is entered.
    g. Outside parcels are eligible for the presorted discount rates 
only when using surface transportation. Outside parcels may be combined 
with other Priority Mail sorted to 5-digit destinations only.
    h. Outside parcels are not eligible for presorted rates or 
containerization to destinations requiring air transportation.
    i. Three optional levels of presort will be available: 5-digit, 3-
digit, and ADC. Mailers can use any or all of the three presort 
options.

1.7  Documentation

    Mailings may contain non-identical-weight pieces, as specified in 
the service agreement, only if the correct postage is affixed to each 
piece or if the RCSC serving the post office of mailing has authorized 
payment of postage by permit imprint under Manifest Mailing System 
(MMS), in accordance with P910.
2.0  REQUIRED PREPARATION--LETTERS AND FLATS

2.1  General

    Letters and flats in trays must be prepared as follows:
    a. The weight of a tray must not exceed 70 pounds.
    b. Addresses on all pieces must face upward in the same direction.
    c. Pieces must be placed in trays to maintain their orientation. 
Once the minimum volume is reached to allow or require preparation of a 
tray, additional pieces must be placed in the same tray up to its 
capacity to minimize the number of trays used. When possible, pieces 
must be placed in two or more stacks to optimize tray use, but mail 
must not overfill the tray to inhibit adequate closure or covering of 
the content.
    d. Each tray must bear the correct orange label with a barcode. The 
appropriate Content Identifier Numbers (CINs) are provided in 2.3.
    e. Each tray must be covered, green side up, and strapped in 
accordance with M033.1.5 and 1.6.
    f. Overflow trays are not permitted.

2.2  Tray Preparation

    Tray preparation and labeling is as follows:
    a. 5-Digit. Optional. Minimum 25 pounds of mail or full flat tray 
(8 inches in height, to the bottom of the handholds).
    (1) Line 1: use the city, state abbreviation, and 5-digit ZIP Code 
destination from the City/State file.
    (2) Line 2: ``PRIORITY''; followed by ``LTRS'' or ``FLTS'', or if 
combined Ltrs/Flts as appropriate; followed by ``5D.''
    b. 3-Digit. Optional. Minimum 25 pounds of mail or full flat tray 
(8 inches in height, to the bottom of the handholds).
    (1) Line 1: use L002, Column A.
    (2) Line 2: ``PRIORITY''; followed by ``LTRS'' or ``FLTS'' as 
appropriate; followed by ``3D.''
    c. ADC. Optional. Minimum 25 pounds of mail or full flat tray (8 
inches in height, to the bottom of the handholds).
    (1) Line 1: use the presorted Priority Mail experiment labeling 
list provided to participants.
    (2) Line 2: use ``PRIORITY''; followed by ``LTRS'' or ``FLTS'' as 
appropriate; followed by ``ADC.''
    d. Residual. No minimum.
    (1) Line 1: use ``WORKING'' or ``WKG'' and label to origin.
    (2) Line 2: use ``PRIORITY''; followed by ``LTRS'' or ``FLTS'' as 
appropriate; followed by ``WKG.''

2.3  3-Digit Content Identifier Numbers (CINs)

                                         Priority Mail Flats--Presorted
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
5-digit flats..................................     154  PRIORITY FLTS 5D
3-digit flats..................................     155  PRIORITY FLTS 3D
ADC flats......................................     157  PRIORITY FLTS ADC
Residual flats.................................     158  PRIORITY FLTS WKG
----------------------------------------------------------------------------------------------------------------

2.4  ADC Tray

    Pieces in each ADC tray must be destined for the same zone, unless 
the exact postage is affixed or MMS under P910 is used, or must be 
eligible for a rate that does not vary by zone.
3.0  REQUIRED PREPARATION--PARCELS

3.1  General

    Parcels in sacks must be prepared as follows:
    a. Each sack must bear the correct sack label.
    b. Each sack must bear the correct orange barcoded sack label. The 
appropriate Content Identifier Numbers (CINs) are provided in 3.3.
    c. The weight of a sack must not exceed 70 pounds.
    d. Sack preparation is not required for outside parcels.
    e. Overflow sacks are not permitted.

3.2  Sack Preparation

    Sack preparation and labeling is as follows:
    a. 5-Digit. Optional. Minimum 10 pieces.
    (1) Line 1: use the city, state abbreviation, and 5-digit ZIP Code 
destination from the City/State file.
    (2) Line 2: ``PRIORITY''; followed by ``PARCELS''; followed by 
``5D.''
    b. 3-Digit. Optional. Minimum 10 pieces.
    (1) Line 1: use L002, Column A.

[[Page 33475]]

    (2) Line 2: ``PRIORITY''; followed by ``PARCELS''; followed by 
``3D.''
    c. ADC. Optional. Minimum 10 pieces.
    (1) Line 1: use the presorted Priority Mail experiment labeling 
list provided to participants.
    (2) Line 2: use ``PRIORITY''; followed by ``PARCELS''; followed by 
``ADC.''
    d. Residual. No minimum.
    (1) Line 1: use ``WORKING'' or ``WKG'' and label to origin.
    (2) Line 2: use ``PRIORITY''; followed by ``PARCELS''; followed by 
``WKG.''

3.3  3-Digit Content Identifier Numbers (CINs)

                                        Priority Mail Parcels--Presorted
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
5-digit parcels................................     160  PRIORITY PARCELS 5D
3-digit parcels................................     161  PRIORITY PARCELS 3D
ADC parcels....................................     163  PRIORITY PARCELS ADC
Residual parcels...............................     164  PRIORITY PARCELS WKG
----------------------------------------------------------------------------------------------------------------

3.4  ADC Sacks and Pallets

    Pieces in each ADC sack or pallet must be destined for the same 
zone, unless the exact postage is affixed or MMS under P910 is used, or 
eligible for a rate that does not vary by zone.
4.0  OPTIONAL PREPARATION

4.1  General

    More than one mail processing category (letters and flats in trays, 
parcels in sacks, loose sackable parcels, and outside parcels) may be 
combined into the same container at the 5-digit level. Letters and 
flats in trays and parcels in sacks may be combined in the same 
container at the 3-digit and ADC levels. Overflow trays or sacks are 
not allowed. This will be specified in the service agreement.

4.2  Flats

    Loose flats may be shrink-wrapped onto pallets for 5-digit, 3-
digit, or ADC destinations with surface transportation from origin. A 
minimum volume of 250 pounds per pallet is required. This will be 
specified within each service agreement.

4.3  Parcels

    Parcels other than outside parcels may be directly placed on 
pallets or in pallet boxes for destinations with surface transportation 
from origin. A minimum volume of 250 pounds per pallet is required. 
This will be specified within each service agreement.
5.0  RATES AND FEES

5.1  Rate Application

    Each presorted Priority Mail mailpiece is charged the applicable 
single-piece Priority Mail rate in R100.8.0, less a per piece discount, 
based upon the level of sortation, as follows:

------------------------------------------------------------------------
                                                              Per-Piece
                       Presort Level                           Discount
------------------------------------------------------------------------
5-Digit....................................................        $0.25
3-Digit....................................................         0.16
Area Distribution Center (ADC).............................         0.12
------------------------------------------------------------------------

6.0  REVOCATION

6.1  Discontinued Eligibility

    The Manager, Mail Preparation and Standards may revoke a mailer's 
authorization to participate in the experiment if that mailer:
    a. Provides incorrect data on the required documentation and 
appears unable or unwilling to correct identified problems.
    b. No longer meets the criteria for participation in the experiment 
or the terms of the service agreement.

6.2  Notice

    After a revocation notice is issued, the USPS consults with the 
mailer and determines necessary corrective actions and an 
implementation schedule for such actions. At the conclusion of this 
schedule the USPS reexamines the participant's documentation and 
system. Failure to correct identified problems is sufficient grounds 
for revocation of the mailer's authorization to participate in the 
experiment.

6.3  Appeal

    The participant may file a written appeal of revocation within 15 
days from the date of the receipt of the notice, with evidence 
explaining why the authorization should not be revoked. The appeal must 
be filed with the Presorted Priority Mail Experiment Management Review 
Board. Decisions of the Board are final.
* * * * *
    As provided by 30 CFR 111.3, notice of issuance will be published 
in the Federal Register.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-15771 Filed 6-21-01; 8:45 am]
BILLING CODE 7710-12-P