[Federal Register Volume 66, Number 227 (Monday, November 26, 2001)]
[Rules and Regulations]
[Pages 58944-58952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-29299]


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POSTAL SERVICE

39 CFR Part 111


Domestic Mail Manual Changes to Allow Co-Packaging of Automation 
Rate and Presorted Rate Flats

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule provides a new preparation option that allows 
mailers to place flat-size automation rate mailpieces together in 
packages with flat-size Presorted rate mailpieces of the same mail 
class. This new option is called ``co-packaging'' and will be available 
beginning March 31, 2002 for use with First-Class Mail, Periodicals, or 
Standard Mail.

EFFECTIVE DATE: March 31, 2002.

FOR FURTHER INFORMATION CONTACT: Jane Stefaniak, 703-292-3548; or 
Cheryl Beller, 202-268-5166.

SUPPLEMENTARY INFORMATION: In this rulemaking, the Postal Service 
announces the adoption of a new preparation option named ``co-
packaging,'' which was initially proposed in a Federal Register notice 
dated August 28, 2001. The new co-packaging preparation option will 
allow mailers to combine flat-sized automation rate pieces and flat-
sized Presorted rate pieces of the same mail class within the same 
package.
    As information, this rule is an outgrowth of two related 
preparation standards the Postal Service previously adopted. The first 
of those two standards was adopted on January 7, 2001. It provided new 
preparation standards in Domestic Mail Manual (DMM) M910 that required 
mailers of Periodicals nonletters, and permitted mailers of First-Class 
Mail and Standard Mail flats, to co-sack (Periodicals and Standard 
Mail) or co-tray (First-Class Mail) packages of automation rate mail 
with packages of Presorted rate mail. The second of those two 
previously adopted standards was published on May 24, 2001 (66 FR 
28659), and required mailers to begin co-traying First-Class Mail flats 
and co-sacking

[[Page 58945]]

Standard Mail flats within certain conditions, effective September 1, 
2001.
    The adoption of the new co-packaging rule is justified since most 
of the same operational justifications for allowing packages of 
automation rate and Presorted rate flats to be combined in the same 
container (co-sacking and co-traying) also support allowing the 
combining of flats within the same package (co-packaging). Currently, 
automation rate flats (ZIP+4 or delivery point barcoded) and Presorted 
rate flats (no barcode required) are usually processed by the Postal 
Service within the same operation.
    It can also be noted that the Postal Service's prior need for 
segregating barcoded and nonbarcoded pieces no longer exists due to 
advances that include an optical character reader (OCR) on the flat 
sorting machine (FSM) 881 and the OCR/image lift capabilities of the 
new automated flat sorting machine (AFSM) 100. Beginning in 2002, the 
Postal Service plans to retrofit FSM 1000s with OCR capabilities. 
Therefore, continuing to require the separate preparation of automation 
rate and Presorted rate pieces results in more packages, which reduces 
the average depth of sort. This causes additional workhours for the 
Postal Service associated with sorting, opening, and prepping flats for 
processing.
    The Postal Service requested that comments on the proposed rule for 
co-packaging (published in the Federal Register on August 28, 2001) be 
submitted by September 27, 2001. Comments were received from a total of 
seven interested parties that included two mailers, three mailing 
agents, and two industry organizations.
    One of the mailing agents and both of the industry organizations 
supported the proposal and generally noted that it should reduce 
package handlings for the Postal Service. One industry organization 
agreed that a 5-digit barcode would be needed on Presorted rate pieces 
that are co-packaged. The Postal Service agrees with those comments.
    One of the mailing agents maintained that the proposal should be 
made mandatory, while one of the industry organizations felt the 
proposal should remain optional. The Postal Service will adopt the rule 
as a mail preparation option.
    One mailing agent, the two mailers, and one industry organization 
commented that they saw no benefit to limiting the co-packaging of 
automation rate and Presorted rate pieces to one physical package per 
logical presort destination. The other mailing agent contended that 
mailings presented under a manifest mailing system should not be 
subject to this requirement. Contrary to those comments, the second 
industry organization stated the limitation was reasonable. In this 
final rule, the Postal Service will limit the co-packaging of 
automation rate and Presorted rate pieces to one physical package for 
each ``logical'' destination. This is necessary in order to assist 
Postal Service personnel during the mail verification and acceptance 
processes.
    The two mailers requested clarification of the rate eligibility 
requirements for pieces that are co-packaged, and one industry 
organization asked for clarification on the requirements for firm 
packages. The Postal Service believes the eligibility rules adopted for 
co-packaging and the existing rules for firm packages provide 
sufficient explanation.
    However, in order to avoid confusion, we are providing this further 
clarification of the rate eligibility standards for co-packaged mail. 
Postage for Presorted rate and automation rate pieces will continue to 
be determined under DMM E130 and E140 for First-Class Mail; under E220 
and E240 for Periodicals; and under E620 and E640 for Standard Mail. 
For example, a Periodicals mailer would prepare packages when there are 
a total of 6 or more Presorted rate and automation rate pieces to the 
same presort destination. First-Class Mail and Standard Mail users 
would prepare packages when there are a total of 10 or more Presorted 
rate and automation rate pieces to the same presort destination. The 
package level would always determine the automation rates.
    For Periodicals and Standard Mail Presorted rate pieces, the rates 
will continue to be based on the sack level for mail in sacks, and on 
the package level for packages prepared on pallets. For example, in a 
sacked Periodicals or Standard Mail mailing, if a 5-digit package 
placed in a 5-digit sack contains 5 automation rate pieces and 5 
Presorted rate pieces, the automation and Presorted 5-digit rates for 
Periodicals, or \3/5\-digit rates for Standard Mail, would apply as 
appropriate. However, if that 5-digit package is placed in an SCF 
(Periodicals), ADC, or mixed ADC sack, the 5 Presorted rate pieces 
would be subject to the Presorted basic rate and the 5 automation rate 
pieces would still be subject to the automation 5-digit rate for 
Periodicals or the automation 3/5 rate for Standard Mail, as 
appropriate.
    Periodicals firm packages claimed as a single piece will continue 
to be subject to the applicable Presorted rate based on the presort 
level of the logical package with which they are associated (e.g., 5 
other pieces to the same destination whether automation rate or 
Presorted rate) and the sack level, if sacked.
    One mailer requested an implementation date for co-packaging that 
would be earlier than the proposed date of March 31, 2002. In order to 
allow presort software vendors enough time to update, test, and 
distribute software to their clients, and because of Postal Service 
needs associated with the certification process for Presort Accuracy, 
Validation, and Evaluation (PAVE)-certified software, the Postal 
Service keeps the implementation date of March 31, 2002.
    Both of the mailers commented that they preferred the third option 
for placing mail on pallets. Under the final rule in DMM M930.1.4e, 
M930.2.3e, M940.1.4e, and M940.2.3e, mailers may elect to use any one 
of the three options identified for placing mail on pallets.
    One industry organization suggested that a 5-percent ``re-order'' 
tolerance be extended to co-packaged pieces. Presently, a 1-percent 
tolerance is applied to ink jet re-order pieces prepared under an 
authorized Optional Procedure (OP) agreement. As such, that comment 
falls outside the scope of this rulemaking. However, if necessary, the 
Postal Service can consider the need to include appropriate provisions 
in a mailer's OP agreement.
    Finally, one industry organization asked that the Postal Service be 
tolerant of mailers who cannot follow these complex rules by issuing 
gentle treatment (i.e., education) rather than revenue deficiencies. 
That comment also falls outside the scope of this rulemaking and 
therefore will not be addressed at this time.
    After full consideration of the comments received and for the 
reasons cited above, the Postal Service believes it appropriate to 
adopt a rulemaking for ``co-packaging'' as follows:

List of Subjects in 39 CFR Part 111

    Postal Service.

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

[[Page 58946]]

M  MAIL PREPARATION AND SORTATION

M000  General Preparation Standards

M010  Mailpieces

M011  Basic Standards

1.0  TERMS AND CONDITIONS
* * * * *

1.3 Preparation Instructions

    For purposes of preparing mail:
* * * * *
    [Insert new 1.3ad and ae, as follows:]
    ad. A ``logical'' presort destination represents the total number 
of pieces that are eligible for a specific presort level based on the 
required sortation, but which might not be contained in a single 
package or in a single container (i.e., sack, pallet) due to applicable 
preparation requirements or the size of the individual pieces. For 
example, there may be 42 mailpieces for ZIP Code 43112 forming a 
Standard Mail ``logical'' 5-digit package, and they are prepared in 
three physical 5-digit packages because of the applicable weight and 
height restrictions on packages. For pallets, 2,800 pounds of mail may 
be destined to an SCF destination, and these would form the ``logical'' 
SCF pallet, but the mail is placed on two physical SCF pallets each 
weighing 1,400 pounds because of the 2,200 pound maximum pallet weight 
requirement.
    ae. Co-packaging is an alternate preparation option available under 
M900 for First-Class Mail, Periodicals, and Standard Mail that allows 
the combining of flat-size automation rate and Presorted rate pieces 
within the same package under the single minimum package size 
requirement. Pieces may not be combined in more than one physical 
package for each logical presort destination.

1.4 Mailing

    Mailings are defined as:
* * * * *
    [Revise 1.4b, d, and e by adding references to the advanced 
preparation options for flat-sized mail in M910, M920, M930, M940, and 
M950 as follows (the remainder of 1.4 is unchanged):]
    b. First-Class Mail. Except as provided by standard, the types of 
First-Class Mail listed below may not be part of the same mailing 
despite being in the same processing category. See M910 and M950 for 
advanced preparation options for flat-size mail.* * *
* * * * *
    d. Periodicals. Mail qualifying for the In-County rates may be part 
of a mailing that includes pieces eligible for the Outside County 
rates. Mail at carrier route rates, nonautomation Presorted rates, and 
automation rates must each be sorted as separate mailings. However, 
each of these mailings may be reported on the same postage statement if 
the pieces are for the same publication and edition. See M041, M045, 
M210, and M220 for copalletized, combined, and mixed rate mailings. See 
M910, M920, M930, M940, and M950 for advanced preparation options for 
nonletter-size mail.
    e. Standard Mail. Except as provided in E620.1.2 and M900, the 
types of Standard Mail listed below may not be part of the same 
mailing. See M041, M045, M610, and M620 for copalletized, combined, and 
mixed rate mailings. See M910, M920, M930, M940, and M950 for advanced 
preparation options for flat-size mail.* * *
* * * * *

M040  Pallets

* * * * *

M045  Palletized Mailings

* * * * *
2.0  PACKAGES ON PALLETS
* * * * *
    [Revise 2.2 by adding a sentence at the end to refer to the co-
packaging option for Periodicals nonletters and Standard Mail flats, as 
follows (the remainder of 2.2 is unchanged):]

2.2  Basic Packaging Standards

    * * * If palletized mailing jobs of nonletter-size Periodicals or 
palletized mailing jobs of flat-size Standard Mail contain both 
automation rate and Presorted rate pieces, the automation rate and 
Presorted rate pieces may be co-packaged under the standards in M950.
* * * * *

M100  First-Class Mail (Nonautomation)

* * * * *

M130  Presorted First-Class Mail

1.0  BASIC STANDARDS
* * * * *
    [Revise the title of 1.6 and add a new sentence at the end to refer 
to the co-packaging option in M950, as follows (the remainder of 1.6 is 
unchanged):]

1.6  Co-Traying and Co-Packaging With Automation Rate Mail

    * * * Flat-size Presorted rate pieces may be co-packaged with flat-
size automation rate pieces under the standards in M950.
* * * * *

M200  Periodicals (Nonautomation)

M210  Presorted Rates

1.0  BASIC STANDARDS
* * * * *
    [Revise the title and text of 1.2 a and b to refer to the new co-
packaging option in M950, as follows (the remainder of 1.2 is 
unchanged):]

1.2 Additional Standards for Nonletter-Size Sacked Mailing Jobs 
Containing More Than One Mailing

    The following standards apply:
    a. Mailings prepared in sacks that are part of a mailing job that 
includes a carrier route mailing, an automation rate mailing, and a 
presorted rate mailing must be prepared under one of the following 
options:
    (1) the carrier route mailing must be prepared under E230 and M220, 
and the automation rate and Presorted rate mailing must be prepared 
under M910; or
    (2) all three mailings in the mailing job must be prepared under 
M920.
    Presorted rate pieces may be co-packaged with automation rate 
pieces under the standards in M950.
    b. Mailings prepared in sacks that are part of a mailing job that 
includes an automation rate mailing under E240 and a Presorted rate 
mailing under E220 must be prepared under the co-sacking standards in 
M910. Presorted rate pieces may be co-packaged with automation rate 
pieces under the standards in M950.
* * * * *
    [Revise 1.6 to show that merging is optional and to refer to the 
co-packaging option in M950, as follows:]

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

    Under the optional preparation method in M920, Presorted rate firm 
and 5-digit packages prepared under 1.0 and under 2.2a and b must be 
co-sacked with firm and carrier route packages prepared under M220 and 
with automation rate 5-digit packages prepared under M820 in merged 5-
digit and 5-digit scheme sacks. Under the optional preparation methods 
in M920, M930, or M940, Presorted rate firm and 5-digit packages 
prepared under 1.0 and under 2.2a and b must be copalletized with firm 
and carrier route packages prepared under M220 and with automation rate 
5-digit packages prepared under M820 on merged 5-digit

[[Page 58947]]

and 5-digit scheme pallets. See 1.2a for information on when 
preparation under M920 may be required. Presorted rate pieces may be 
co-packaged with automation rate pieces under M950.
* * * * *

M220  Carrier Route Rates

1.0  BASIC INFORMATION
* * * * *
    [Revise 1.6 to show that merging is optional and to refer to the 
co-packaging option in M950, as follows:]

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

    Under the optional preparation method in M920, firm and carrier 
route packages prepared under 1.0 and 2.4 must be co-sacked with 
Presorted rate 5-digit packages prepared under M210 and with automation 
rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit 
scheme sacks. For sacked mailing jobs that contain an automation rate 
and a Presorted rate mailing as well as a carrier route mailing, the 
automation rate and the Presorted rate mailings must be prepared under 
M910 (see M210) and the carrier route mailing must be prepared under 
M220, unless the mailings are prepared under M920. Under the optional 
preparation methods in M920, M930, or M940, firm and carrier route 
packages prepared under 1.0 and 2.4 must be copalletized with Presorted 
rate 5-digit packages prepared under M210 and with automation rate 5-
digit packages prepared under M820 on merged 5-digit and 5-digit scheme 
pallets. Presorted rate pieces may be co-packaged with automation rate 
pieces under M950.
* * * * *

M600  Standard Mail (Nonautomation)

M610  Presorted Standard Mail

1.0  BASIC STANDARDS
* * * * *
    [Revise the title of 1.5 and add a new sentence at the end to refer 
to the co-packaging option in M950, as follows (the remainder of 1.5 is 
unchanged):]

1.5  Co-Traying and Co-Packaging With Automation Rate Mail

    * * * Flat-size Presorted rate pieces may be co-packaged with flat-
size automation rate pieces under the standards in M950.
    [Revise the title and text of 1.6 to refer to the new co-packaging 
option in M950, as follows:]

1.6  Merged Containerization of Flat-Size Carrier Route, Automation 
Rate, and Presorted Rate Mail

    When the conditions and preparation standards in M920 are met, 
Presorted rate 5-digit packages prepared under 4.3a may be co-sacked 
with carrier route rate packages prepared under M620 and with 
automation rate 5-digit packages prepared under M820 in merged 5-digit 
and 5-digit scheme sacks. When the conditions and preparation standards 
in M920, M930, or M940 are met, Presorted rate 5-digit packages 
prepared under 4.3a may be copalletized with carrier route rate 
packages prepared under M620 and with automation rate 5-digit packages 
prepared under M820 on merged 5-digit and 5-digit scheme pallets. 
Presorted rate pieces may be co-packaged with automation rate pieces 
under M950.
* * * * *

M620  Enhanced Carrier Route Standard Mail

1.0  BASIC STANDARDS
* * * * *
    [Revise the title and text of 1.6 to refer to the co-packaging 
option in M950, as follows:]

1.6  Merged Containerization of Flat-Size Carrier Route, Automation 
Rate, and Presorted Rate Mail

    When the conditions and preparation standards in M920 are met, 
carrier route rate packages prepared under 2.0 may be co-sacked with 
Presorted rate 5-digit packages prepared under M610 and with automation 
rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit 
scheme sacks. When the conditions and preparation standards in M920, 
M930, or M940 are met, carrier route rate packages prepared under 2.0 
may be copalletized with Presorted rate 5-digit packages prepared under 
M610 and with automation rate 5-digit packages prepared under M820 on 
merged 5-digit and 5-digit scheme pallets. Presorted rate pieces may be 
co-packaged with automation rate pieces under M950.
* * * * *

M800  All Automation Mail

* * * * *

M820  Flat-Size Mail

1.0  BASIC STANDARDS
* * * * *
    [Revise the title of 1.9 and add a new sentence at the end to refer 
to the co-packaging option in M950, as follows (the remainder of 1.9 is 
unchanged):]

1.9  Co-Traying, Co-Sacking, and Co-Packaging With Presorted Rate 
Mail

    * * *Automation rate pieces may be co-packaged with Presorted rate 
pieces under the standards in M950.
    [Revise the title and text of 1.10 to be consistent with M210.1.6 
and M610.1.6 to refer to the options for merged containerization and 
co-packaging, as follows:]

1.10  Merged Containerization of Flat-size Carrier Route, 
Automation Rate, and Presorted Rate Mail

    Under the optional preparation methods in M920, 5-digit packages of 
Periodicals or Standard Mail automation rate flats must be co-sacked 
with 5-digit packages of Periodicals Presorted rate nonletters or 
Standard Mail Presorted rate flats prepared under M210 or M610, as 
applicable, and with packages of Periodicals carrier route nonletters 
or Standard Mail carrier route flats in merged 5-digit and 5-digit 
scheme sacks. Under the optional preparation methods in M920, M930, or 
M940, 5-digit packages of Periodicals or Standard Mail automation rate 
flats must be copalletized with 5-digit packages of Periodicals 
Presorted rate nonletters or Standard Mail Presorted rate flats 
prepared under M210 or M610, as applicable, and with packages of 
Periodicals carrier route nonletters or Standard Mail carrier route 
flats on merged 5-digit and 5-digit scheme pallets. Presorted rate 
nonletter-size Periodicals pieces or Presorted rate flat-size Standard 
Mail pieces may be co-packaged with flat-size automation rate pieces 
under M950.
* * * * *

M900  Advanced Preparation Options for Flats

M910  Co-Traying and Co-Sacking Packages of Automation and Presorted 
Mailings

1.0  FIRST-CLASS MAIL

1.1  Basic Standards

    [Revise 1.1c, d, and g by changing the reference to tray 
preparation standards from ``1.3'' to ``1.4'' (the remainder of 1.1 is 
unchanged).]
* * * * *
    [Revise 1.2 to refer to the co-packaging option in 1.3, as 
follows:]

1.2 Package Preparation

    Except for mail prepared under the co-packaging option in 1.3, the 
automation rate mailing must be packaged and labeled under M820 and the 
Presorted rate mailing must be packaged and labeled under M130.

[[Page 58948]]

    [Renumber current 1.3 as 1.4 and insert new 1.3, as follows:]

1.3  Optional Co-Packaging Preparation

    As an option to the basic packaging requirements in 1.2, a mailer 
may choose to co-package (see M011) automation rate and Presorted rate 
flat-size pieces, subject to the conditions in M950.
    [Revise the first sentence of the renumbered 1.4 to refer to the 
co-packaging option in 1.3, as follows (the remainder of 1.4 is 
unchanged):]

1.4  Tray Preparation and Labeling

    Presorted rate and automation rate packages prepared under 1.2 or 
1.3 must be presorted together into trays (co-trayed) in the sequence 
listed below.
    * * *
* * * * *
2.0  PERIODICALS

2.1  Basic Standards

    [Revise 2.1c, d, and f by changing the reference to sack 
preparation standards from ``2.4'' to ``2.5'' (the remainder of 2.1 is 
unchanged).]
* * * * *
    [Revise 2.2 to refer to the co-packaging option in 2.3, as 
follows:]

2.2  Package Preparation

    Except for mail prepared under the co-packaging option in 2.3, the 
automation rate mailing must be packaged and labeled under M820 (all 
package levels) and the Presorted rate mailing must be packaged and 
labeled under M210 (excluding carrier route level).
    [Renumber current 2.3 and 2.4 as 2.4 and 2.5, respectively, and 
insert new 2.3 as follows:]

2.3  Optional Co-Packaging Preparation

    As an option to the basic packaging requirements in 2.2, a mailer 
may choose to co-package (see M011) automation rate and Presorted rate 
nonletter-size pieces, subject to the conditions in M950.
    [Revise the renumbered 2.4 by adding references to packages 
prepared under the co-packaging option in 2.3, as follows:]

2.4  Low-Volume Packages in Sacks or on Pallets

    Periodicals 5-digit and 3-digit packages prepared under M210 and 
M820 or under 2.3 may contain fewer than six pieces when the publisher 
determines that such preparation improves service. These low-volume 
packages may be placed in 5-digit, 3-digit, and SCF sacks or on 5-
digit, 3-digit, or SCF pallets. Presorted rate pieces in such low-
volume packages must be claimed at the applicable basic Presorted rate. 
Automation rate pieces in such low-volume packages must be claimed at 
the applicable basic automation rate.
    [Revise the first sentence of the renumbered 2.5 to refer to the 
co-packaging option in 2.3, as follows (the remainder of 2.5 is 
unchanged):]

2.5  Sack Preparation and Labeling

    Presorted rate and automation rate packages prepared under 2.2 and 
2.4 must be presorted together in sacks (co-sacked) in the sequence 
listed below.
* * *
3.0  STANDARD MAIL

3.1  Basic Standards

    [Revise 3.1c, d, and g by changing the references to sack 
preparation standards from ``3.3 and 3.4'' to ``3.4 and 3.5'' (the 
remainder of 3.1 is unchanged).]
* * * * *
    [Revise 3.2 to refer to the co-packaging option in 3.3, as 
follows:]

3.2  Package Preparation

    Except for mail prepared under the co-packaging option in 3.3, the 
automation rate mailing must be packaged and labeled under M820 and the 
Presorted rate mailing must be packaged and labeled under M610. Loose 
packing under M610 is not permitted.
    [Renumber current 3.3 and 3.4 as 3.4 and 3.5, respectively, and 
insert new 3.3, as follows:]

3.3  Optional Co-Packaging Preparation

    As an option to the basic packaging requirements in 3.2, a mailer 
may choose to co-package (see M011) automation rate and Presorted rate 
flat-size pieces, subject to the conditions in M950.
* * * * *

M920  Merged Containerization of Packages Using the City State Product

    [Revise the summary in M920 to refer to the co-packaging option in 
M950, as follows:]

Summary

    M920 describes the eligibility and preparation requirements for co-
sacking or copalletizing 5-digit automation rate packages, 5-digit 
Presorted packages, including automation and Presorted rate pieces co-
packaged under M950, and carrier route packages of Periodicals 
nonletter-size mailings and Standard Mail flat-size mailings in merged 
5-digit and 5-digit scheme containers using the City State Product.
    [Revise the heading of 1.0, as follows:]
1.0  PERIODICALS
    [Revise the first sentence in 1.1 to refer to the co-packaging 
option in M950, as follows:]

1.1  Basic Standards

    Carrier route packages in a carrier route rate mailing may be 
placed in the same sack or on the same pallet (in a merged 5-digit or 
5-digit scheme sack or pallet) as 5-digit packages from an automation 
rate mailing and 5-digit packages from a Presorted rate mailing, 
including automation and Presorted rate pieces co-packaged as permitted 
in M950, under the following conditions:
* * * * *
    [Revise the first sentence in 1.1e to refer to the co-packaging 
option in M950, as follows (the remainder of 1.1e is unchanged):]
    e. Carrier route packages must be co-sacked or copalletized with 
automation rate 5-digit packages and Presorted rate 5-digit packages, 
including automation and Presorted rate pieces co-packaged under M950, 
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 showing 
they are eligible for co-sacking or copalletization.* * *
* * * * *

1.2  Package Preparation

    Packages must be prepared as follows:
    [Revise 1.2a to refer to the co-packaging option in M950, as 
follows:]
    a. Sacked Mailings. The carrier route mailing must be packaged and 
labeled under M220. Except when prepared under the co-packaging option 
in M950, the automation rate mailing must be packaged and labeled under 
M820 and the Presorted rate mailing must be packaged and labeled under 
M210.
* * * * *

1.3  Low-Volume Packages in Sacks or on Pallets

    [Revise 1.3 to refer to the co-packaging option by adding ``or 
M950'' after the reference to M820 in the first sentence (the remainder 
of 1.3 is unchanged).]
* * * * *
2.0  STANDARD MAIL
    [Revise the first sentence in 2.1 to refer to the co-packaging 
option in M950, as follows:]

[[Page 58949]]

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 or 5-digit scheme sack or pallet) as 5-digit packages from an 
automation rate mailing and 5-digit packages from a Presorted rate 
mailing, including automation and Presorted rate pieces co-packaged as 
permitted in M950, under the following conditions:
* * * * *
    [Revise the first sentence in 2.1e to refer to the co-packaging 
option in M950, as follows (the remainder of 2.1e is unchanged):]
    e. Carrier route rate packages must be co-sacked or copalletized 
with automation rate 5-digit packages and Presorted rate 5-digit 
packages, including automation and Presorted rate pieces co-packaged 
under M950, only for those 5-digit ZIP Codes with 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.* * *
* * * * *

2.2  Package Preparation

    Packages must be prepared as follows:
    [Revise 2.2a to refer to the co-packaging option in M950, as 
follows:]
    a. Sacked Mailings. The carrier route mailing must be packaged and 
labeled under M620. Except when prepared under the co-packaging option 
in M950, the automation rate mailing must be packaged and labeled under 
M820 and the Presorted rate mailing must be packaged and labeled under 
M610.
* * * * *

M930  Merged Palletization of Packages Using a 5% Threshold

    [Revise the summary in M930 to refer to the co-packaging option in 
M950, as follows:]

Summary

    M930 describes the eligibility and preparation requirements for 
copalletizing 5-digit automation rate packages; 5-digit Presorted rate 
packages, including automation and Presorted rate pieces co-packaged 
under M950; and carrier route rate packages of Periodicals nonletter-
size mailings and Standard Mail flat-size mailings in merged 5-digit 
and 5-digit scheme pallets using only the 5% threshold (not the City 
State Product).
    [Revise the heading of 1.0, as follows:]
1.0  PERIODICALS
    [Revise the heading and first sentence of 1.1 to refer to the co-
packaging option in M950, as follows:]

1.1  Basic Standards

    5-digit packages from an automation rate mailing and 5-digit 
packages from a Presorted rate mailing, including automation and 
Presorted rate pieces co-packaged under M950, may be placed on the same 
pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route 
rate packages from a carrier route mailing under the following 
conditions:
* * * * *
    [Revise the first sentence of 1.1d to refer to the co-packaging 
option in M950, as follows (the remainder of 1.1d is unchanged):]
    d. Automation rate 5-digit packages and Presorted rate 5-digit 
packages, including automation rate and Presorted rate pieces co-
packaged under M950, must be copalletized with carrier route rate 
packages only when the pieces in the 5-digit packages do not exceed the 
5% limit described in 1.4.* * *
* * * * *

1.3  Low-Volume Packages on Pallets

    [Revise 1.3 to refer to the co-packaging option by adding ``or 
M950'' after the reference to M820 in the first sentence (the remainder 
of 1.3 is unchanged).]
* * * * *
    [Revise the first sentence of 1.4, as follows:]

1.4  5%  Threshold Standard

    5-digit packages and carrier route packages may be placed on the 
same merged 5-digit or 5-digit scheme pallet under 1.5 if all of the 
following conditions are met:
* * * * *
    [Revise 1.4c by replacing the first sentence with the following new 
sentence; then delete the last four sentences beginning at the word 
``Example'' (the remainder of 1.4c is unchanged):]
    c. Except when packages are prepared under the co-packaging option 
in M950, all mail in a logical 5-digit package must be able to be 
placed on the logical pallet using the 5% limit. * * *
    [Insert the following clause at the beginning of 1.4d (the 
remainder of 1.4d is unchanged):]
    d. Except for packages prepared under the co-packaging option in 
M950, * * *
    [Insert new 1.4e to permit mailers using the co-packaging option in 
M950 to place a portion of a ``logical'' 5-digit package on a merged 5-
digit scheme or merged 5-digit pallet with carrier route mail; renumber 
current 1.4e and f as 1.4f and g, respectively; and change the 
references in renumbered 1.4f and g from ``1.4a through 1.4d'' to 
``1.4a through 1.4e,'' as follows:]
    e. For mailing jobs prepared using the co-packaging option in M950, 
if the total number of pieces prepared in a logical 5-digit package 
(containing automation rate and Presorted rate pieces) exceeds the 5% 
limit for a 5-digit ZIP Code in 1.4a, a mailer may, for each 5-digit 
ZIP Code, choose to place a portion of the pieces prepared in the 
logical 5-digit package on a merged 5-digit or 5-digit scheme pallet 
using one of the options below. Regardless of the option selected, a 
minimum of 6 pieces must be prepared in 5-digit package(s) placed on 
the merged pallet and a minimum of 6 remaining pieces prepared in 5-
digit package(s) not placed on the merged pallet, with the total number 
of pieces not exceeding the 5% limit. The options are:
    (1) Place either all automation rate pieces or all Presorted rate 
pieces for the 5-digit ZIP Code on the merged pallet.
    (2) Place a portion of either the automation rate pieces or the 
Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.
    (3) Place either all the automation rate pieces plus a portion of 
the Presorted rate pieces or all the Presorted rate pieces plus a 
portion of the automation rate pieces for the 5-digit ZIP Code on the 
merged pallet.
* * * * *
2.0  STANDARD MAIL
    [Revise the first sentence in 2.1 to refer to the co-packaging 
option in M950, as follows:]

2.1  Basic Standards

    5-digit packages from an automation rate mailing and 5-digit 
packages from a Presorted rate mailing, including automation rate and 
Presorted rate pieces co-packaged under M950, may be placed on the same 
pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route 
rate packages from a carrier route rate mailing under the following 
conditions:
* * * * *
    [Revise the first sentence in 2.1d to refer to the co-packaging 
option in M950, as follows (the remainder of 2.1d is unchanged):]
    d. Automation rate 5-digit packages and Presorted rate 5-digit 
packages, including automation and Presorted rate pieces co-packaged 
under M950, must be copalletized with carrier route packages only when 
the pieces in the 5-digit packages do not exceed the 5% limit in 2.3.* 
* *
* * * * *
    [Revise the first sentence of 2.3, as follows:]

[[Page 58950]]

2.3-5% Threshold Standard

    5-digit packages and carrier route packages may be placed on the 
same merged 5-digit pallet under 2.4 or on the same merged 5-digit or 
5-digit scheme pallet under 2.5 if all of the following conditions are 
met:
* * * * *
    [Revise the first sentence in 2.3c as follows; then delete the last 
four sentences beginning at the word ``Example'' (the remainder of 2.3c 
is unchanged):]
    c. Except when packages are prepared under the co-packaging option 
in M950, all mail in a logical 5-digit package must be able to be 
placed on the logical pallet using the 5% limit.* * *
    [Revise 2.3d by inserting the following clause at the beginning 
(the remainder of 2.3d is unchanged):]
    d. Except for packages prepared under the co-packaging option in 
M950, * * *
    [Insert new 2.3e to permit mailers using the co-packaging option in 
M950 to place a portion of a logical 5-digit package on a merged 5-
digit scheme or merged 5-digit pallet with carrier route mail, as 
follows:]
    e. For mailing jobs prepared using the co-packaging option in M950, 
if the total number of pieces prepared in a logical 5-digit package 
(containing automation rate and Presorted rate pieces) exceeds the 5% 
limit for a 5-digit ZIP Code in 2.3a, a mailer may, for each 5-digit 
ZIP Code, choose to place a portion of the pieces prepared in the 
logical 5-digit package on a merged 5-digit or 5-digit scheme pallet 
using one of the options below. Regardless of the option selected, a 
minimum of 10 pieces must be prepared in 5-digit package(s) placed on 
the merged pallet and a minimum of 10 remaining pieces prepared in 5-
digit package(s) not placed on the merged pallet, with the total number 
of pieces not exceeding the 5% limit. The options are:
    (1) Place either all automation rate pieces or all Presorted rate 
pieces for the 5-digit ZIP Code on the merged pallet.
    (2) Place a portion of either the automation rate pieces or the 
Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.
    (3) Place either all the automation rate pieces plus a portion of 
the Presorted rate pieces or all the Presorted rate pieces plus a 
portion of the automation rate pieces for the 5-digit ZIP Code on the 
merged pallet.
* * * * *

M940  Merged Palletization of Packages Using the City State Product and 
a 5% Threshold

    [Revise the summary in M940 to refer to the co-packaging option in 
M950 and 3.3, as follows:]

Summary

    M940 describes the eligibility and preparation requirements for 
copalletizing 5-digit automation rate packages; 5-digit Presorted rate 
packages, including automation rate and Presorted rate pieces co-
packaged under M950; and carrier route packages of Periodicals 
nonletter-size mailings and Standard Mail flat-size mailings in merged 
5-digit scheme and merged 5-digit pallets using both the City State 
Product and a 5% threshold, as applicable.
    [Revise the title of 1.0, as follows:]
1.0  PERIODICALS
    [Revise the first sentence of 1.1 to refer to the co-packaging 
option in M950, as follows:]

1.1  Basic Standards

    5-digit packages from an automation rate mailing and 5-digit 
packages from a Presorted rate mailing, including automation rate and 
Presorted rate pieces co-packaged under M950, may be placed on the same 
pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route 
packages from a carrier route rate mailing under the following 
conditions:
* * * * *
    [Revise the first sentence in 1.1e to refer to the co-packaging 
option in M950, as follows (the remainder of 1.1e is unchanged):]
    e. Automation rate 5-digit packages and Presorted rate 5-digit 
packages, including automation rate and Presorted rate pieces co-
packaged under M950, must be copalletized with carrier route packages 
on merged 5-digit and 5-digit scheme pallets as follows:
* * * * *

1.3  Low-Volume Packages on Pallets

    [Revise 1.3 to refer to the co-packaging option by adding ``or 
M950'' after the reference to M820 in the first sentence (the remainder 
of 1.3 is unchanged).]
* * * * *
    [Revise the first sentence of 1.4, as follows:]

1.4  5% Threshold Standard

    5-digit packages and carrier route packages for 5-digit ZIP Codes 
with a ``B'' or ``D'' indicator in the City State Product, may be 
placed on the same merged 5-digit or 5-digit scheme pallet under 1.5 if 
all of the following conditions are met:
* * * * *
    [Revise the first sentence of 1.4c, as follows: then delete the 
last four sentences beginning at the word ``Example'' (the remainder of 
1.4c is unchanged):]
    c. Except when packages are prepared under the co-packaging option 
in M950, all 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% limit.* * *
    [Insert the following clause at the beginning of 1.4d (the 
remainder of 1.4d is unchanged):]
    d. Except for packages prepared under the co-packaging option in 
M950, * * *
    [Insert new 1.4e to permit mailers using the co-packaging option in 
M950 to place a portion of a logical 5-digit package on a merged 5-
digit scheme or merged 5-digit pallet with carrier route mail; renumber 
current 1.4e and f as 1.4f and g, respectively; and change the 
references in renumbered 1.4f and g from ``1.4a through 1.4d'' to 
``1.4a through 1.4e,'' as follows:]
    e. For mailing jobs prepared using the co-packaging option in M950, 
if the total number of pieces prepared in a logical 5-digit package 
(containing automation rate and Presorted rate pieces) exceeds the 5% 
limit for a 5-digit ZIP Code in 1.4a, a mailer may, for each 5-digit 
ZIP Code, choose to place a portion of the pieces prepared in the 
logical 5-digit package on a merged 5-digit or 5-digit scheme pallet 
using one of the options below. Regardless of the option selected, a 
minimum of 6 pieces must be prepared in 5-digit package(s) placed on 
the merged pallet and a minimum of 6 remaining pieces prepared in 5-
digit package(s) not placed on the merged pallet, with the total number 
of pieces not exceeding the 5% limit. The options are:
    (1) Place either all automation rate pieces or all Presorted rate 
pieces for the 5-digit ZIP Code on the merged pallet.
    (2) Place a portion of either the automation rate pieces or the 
Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.
    (3) Place either all the automation rate pieces plus a portion of 
the Presorted rate mail or all the Presorted rate pieces plus a portion 
of the automation rate pieces for the 5-digit ZIP Code on the merged 
pallet.
* * * * *
2.0  STANDARD MAIL
    [Revise the first sentence in 2.1 to refer to the co-packaging 
option in M950, as follows:]

[[Page 58951]]

2.1  Basic Standards

    5-digit packages from an automation rate mailing and 5-digit 
packages from a Presorted rate mailing, including automation and 
Presorted rate pieces co-packaged under M950, may be placed on the same 
pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route 
packages from a carrier route rate mailing under the following 
conditions:
* * * * *
    [Revise the first sentence of 2.1e to refer to the co-packaging 
option in M950, as follows (the remainder of 2.1e is unchanged):]
    e. Automation rate 5-digit packages and Presorted rate 5-digit 
packages, including automation rate and Presorted rate pieces co-
packaged under M950, must be copalletized with carrier route packages 
on merged 5-digit scheme and merged 5-digit pallets as follows:
* * * * *
    [Revise the first sentence of 2.3, as follows:]

2.3  5% Threshold Standard

    5-digit packages and carrier route packages for 5-digit ZIP Codes 
with a ``B'' or ``D'' indicator in the City State Product, may be 
placed on the same merged 5-digit pallet under 2.4 or on the same 
merged 5-digit or 5-digit scheme pallet under 2.5 if all of the 
following conditions are met:
* * * * *
    [Revise the first sentence of 2.3c, as follows (the remainder of 
2.3c is unchanged):]
    c. Except when packages are prepared under the co-packaging option 
in M950, all mail in a logical 5-digit package must be able to be 
placed on the logical pallet using the 5% limit.* * *
    [Insert the following clause at the beginning of 2.3d (the 
remainder of 2.3d is unchanged):]
    d. Except for packages prepared under the co-packaging option in 
M950, * * *
    [Insert new 2.3e to permit mailers using the co-packaging option in 
M950 to place a portion of a logical 5-digit package on a merged 5-
digit scheme or merged 5-digit pallet with carrier route mail, as 
follows:]
    e. For mailing jobs prepared using the co-packaging option in M950, 
if the total number of pieces prepared in a logical 5-digit package 
(containing automation rate and Presorted rate pieces) exceeds the 5% 
limit for a 5-digit ZIP Code in 2.3a, a mailer may, for each 5-digit 
ZIP Code, choose to place a portion of the pieces prepared in the 
logical 5-digit package on a merged 5-digit or 5-digit scheme pallet 
using one of the options below. Regardless of the option selected, a 
minimum of 10 pieces must be prepared in 5-digit package(s) placed on 
the merged pallet and a minimum of 10 remaining pieces prepared in 5-
digit package(s) not placed on the merged pallet, with the total number 
of pieces not exceeding the 5% limit. The options are:
    (1) Place either all automation rate pieces or all Presorted rate 
pieces for the 5-digit ZIP Code on the merged pallet.
    (2) Place a portion of either the automation rate pieces or the 
Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.
    (3) Place either all the automation rate pieces plus a portion of 
the Presorted rate pieces or all the Presorted rate pieces plus a 
portion of the automation rate pieces for the 5-digit ZIP Code on the 
merged pallet.
* * * * *
    [Add new section M950 to provide requirements for co-packaging of 
automation rate and Presorted rate First-Class Mail, Periodicals, and 
Standard Mail, to read as follows:]

M950  Co-Packaging Automation Rate and Presorted Rate Pieces

Summary

    M950 describes the eligibility and preparation requirements for co-
packaging flat-size automation rate and Presorted rate First-Class 
Mail, nonletter-size automation rate and Presorted rate Periodicals, 
and flat-size automation rate and Presorted rate Standard Mail.
1.0  FIRST-CLASS MAIL

1.1  Basic Standards

    Effective March 31, 2002, mailers may choose to co-package (see 
M011) automation rate and Presorted rate pieces as an option to the 
basic packaging requirements in M910, subject to the following 
conditions:
    a. The pieces in the automation rate mailing and the Presorted rate 
mailing must be part of the same mailing job and must be reported on 
the appropriate postage statement.
    b. The pieces in the mailing job must be flat-size and meet any 
other size and mailpiece design requirements applicable to the rate 
category for which they are prepared.
    c. The basic standards in M910 must be met.
    d. A minimum of 500 automation rate pieces and 500 Presorted rate 
pieces are required. The total number of automation rate and Presorted 
rate pieces must be used to meet the minimum volume requirements for 
packages and containers to a presort destination.
    e. Presorted rate pieces must contain a 5-digit barcode and be co-
packaged with automation rate pieces for the same presort destination. 
If this optional preparation method is used, all automation rate and 
Presorted rate pieces in the same mailing job and reported on the same 
postage statement must be co-packaged.
    f. Within a package, all pieces must meet the FSM 881 requirements 
or all pieces must meet the FSM 1000 requirements described in C820.
    g. Mailers must sort automation rate pieces and Presorted rate 
pieces for each presort destination so that only one physical package 
for each logical presort destination (see M011) includes both 
automation rate pieces (containing a ZIP+4 or delivery point barcode) 
and Presorted rate pieces (containing a 5-digit barcode).

1.2  Package Preparation

    Package size, preparation sequence, and labeling:
    a. 5-digit: required (10-piece minimum, fewer not permitted); red 
Label D or optional endorsement line (OEL).
    b. 3-digit: required (10-piece minimum, fewer not permitted); green 
Label 3 or OEL.
    c. ADC: required (10-piece minimum, fewer not permitted); pink 
Label A or OEL.
    d. Mixed ADC: required (no minimum); tan Label MXD or OEL.
2.0  PERIODICALS

2.1  Basic Standards

    Effective March 31, 2002, mailers may choose to co-package (see 
M011) automation rate and Presorted rate pieces as an option to the 
basic packaging requirements in M210 and M820, subject to the following 
conditions:
    a. The pieces in the automation rate mailing and the Presorted rate 
mailing must be part of the same mailing job and must be reported on 
the appropriate postage statement.
    b. The pieces in the mailing job must be nonletter-size and meet 
any other size and mailpiece design requirements applicable to the rate 
category for which they are prepared.
    c. Mailings prepared in sacks must meet the basic standards in M910 
or M920.
    d. Mailings prepared on pallets must meet the basic standards in 
M045, M920, M930, or M940.
    e. The total number of automation rate and Presorted rate pieces 
must be used to meet the minimum volume requirements for packages and 
containers.

[[Page 58952]]

    f. Presorted rate pieces must contain a 5-digit barcode and be co-
packaged with automation rate pieces for the same presort destination. 
If this optional preparation method is used, all automation rate and 
Presorted rate pieces in the same mailing job and reported on the same 
postage statement must be co-packaged.
    g. Within a package, all pieces must meet the FSM 881 requirements 
or all pieces must meet the FSM 1000 requirements described in C820.
    h. Mailers must sort Presorted rate pieces and automation rate 
pieces for each presort destination so that only one physical package 
for each logical presort destination (see M011) includes both 
automation rate pieces (containing a ZIP+4 or delivery point barcode) 
and Presorted rate pieces (containing a 5-digit barcode).

2.2  Package Preparation

    Package size, preparation sequence, and labeling:
    a. Firm: optional (for Presorted rate pieces only under M210.1.4) 
(two-piece minimum); blue Label F or optional endorsement line (OEL).
    b. 5-digit: required (six-piece minimum, fewer not permitted except 
under 2.3); red Label D or OEL.
    c. 3-digit: required (six-piece minimum, fewer not permitted except 
under 2.3); green Label 3 or OEL.
    d. ADC: required (six-piece minimum, fewer not permitted); pink 
Label A or OEL.
    e. Mixed ADC: required (no minimum); tan Label MXD or OEL.

2.3  Low-Volume Packages in Sacks or on Pallets

    Periodicals 5-digit and 3-digit packages prepared under 2.2, may 
contain fewer than six pieces when the publisher determines that such 
preparation improves service. These low-volume packages may be placed 
in merged 5-digit scheme, merged 5-digit, 5-digit, 3-digit, and SCF 
sacks or on merged 5-digit scheme, merged 5-digit, 5-digit, 3-digit, or 
SCF pallets. Presorted rate pieces in such low-volume packages must be 
claimed at the applicable basic Presorted rate. Automation rate pieces 
in such low-volume packages must be claimed at the applicable basic 
automation rate.
3.0  STANDARD MAIL

3.1  Basic Standards

    Effective March 31, 2002, mailers may choose to co-package (see 
M011) automation rate and Presorted rate pieces as an option to the 
basic packaging requirements in M610 and M820, subject to the following 
conditions:
    a. The pieces in the automation rate mailing and the Presorted rate 
mailing must be part of the same mailing job and must be reported on 
the appropriate postage statement.
    b. The pieces in the mailing job must be flat-size and meet any 
other size and mailpiece design requirements applicable to the rate 
category for which they are prepared.
    c. Mailings prepared in sacks must meet the basic standards in M910 
or M920.
    d. Mailings prepared on pallets must meet the basic standards in 
M045, M920, M930, or M940.
    e. A minimum of 200 pieces or 50 pounds of automation rate pieces 
are required; the Presorted rate mailing may meet the residual volume 
requirements in E620. The total number of automation rate and Presorted 
rate pieces must be used to meet the minimum volume requirements for 
packages and containers.
    f. Presorted rate pieces must contain a 5-digit barcode and be co-
packaged with automation rate pieces for the same presort destination. 
If this optional preparation method is used, all automation rate and 
Presorted rate pieces in the same mailing job and reported on the same 
postage statement must be co-packaged.
    g. Within a package, all pieces must meet the FSM 881 requirements 
or all pieces must meet the FSM 1000 requirements described in C820.
    h. Mailers must sort Presorted rate pieces and automation rate 
pieces for each presort destination so that only one physical package 
for each logical presort destination (see M011) includes both Presorted 
rate pieces (containing a 5-digit barcode) and automation rate pieces 
(containing a ZIP+4 or delivery point barcode).

3.2  Package Preparation

    Package size, preparation sequence, and labeling:
    a. 5-digit: required (10-piece minimum, fewer not permitted); red 
Label D or optional endorsement line (OEL)
    b. 3-digit: required (10-piece minimum, fewer not permitted); green 
Label 3 or OEL.
    c. ADC: required (10-piece minimum, fewer not permitted); pink 
Label A or OEL.
    d. Mixed ADC: required (no minimum); tan Label MXD or OEL.
* * * * *
    An appropriate amendment to 39 CFR part 111 to reflect these 
changes will be published.

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 01-29299 Filed 11-23-01; 8:45 am]
BILLING CODE 7710-12-P