[Federal Register Volume 67, Number 88 (Tuesday, May 7, 2002)]
[Rules and Regulations]
[Pages 30571-30574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-11310]


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POSTAL SERVICE

39 CFR Part 111


Realignment of Buffalo and Pittsburgh Postal Facilities for 
Deposit of DBMC Rate Standard Mail and Package Services Machinable 
Parcels

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM) 
standards adopted by the Postal Service requiring mailers to deposit, 
at the Pittsburgh Bulk Mail Center (BMC), Standard Mail machinable 
parcels and Package Services machinable parcels, currently required to 
be taken to the Buffalo, New York, Auxiliary Service Facility (ASF), in 
order to claim destination bulk mail center (DBMC) rates. This mail, 
where applicable, will be required to be zoned from the Pittsburgh BMC.

DATES:  Effective. Compliance is optional as of May 7, 2002. Compliance 
will be required on January 5, 2003.

FOR FURTHER INFORMATION CONTACT: OB Akinwole, (703) 292-3643 or Cheryl 
Beller (703) 292-3747.

SUPPLEMENTARY INFORMATION: On January 17, 2002, the Postal Service 
published, for public comment, a notice in the Federal Register (67 FR 
2388), proposing to realign permissible points for mailer deposit of 
Standard Mail machinable parcels and Package Services machinable 
parcels currently required, by DMM Standard, to be entered at the 
Buffalo, New York, Auxiliary Service Facility (ASF) in order to be 
claimed at destination bulk mail center (DBMC) rates.
    Mailers will now be required to enter mail, addressed for delivery 
within the ZIP Code range of the Buffalo ASF service area, as defined 
for the appropriate class of mail in DMM Exhibit E650.5.1 and Exhibit 
E751.1.3, at the Pittsburgh BMC to claim the DBMC rates. As part of 
this final rule, all machinable and nonmachinable parcels (Parcel Post, 
Parcel Select, and Bound Printed Matter) deposited at the Pittsburgh 
BMC are also required to be zoned from Pittsburgh using Postal Service 
zone chart 150. As an option, mailers may also deposit nonmachinable 
parcels for the Buffalo ASF service area ZIP Codes listed in DMM 
labeling list L602 at the Pittsburgh BMC, provided that these 
nonmachinable parcels are commingled in bedloads with the DBMC rate 
machinable parcels. These nonmachinable parcels would also be eligible 
for the DBMC rates. Otherwise, nonmachinable parcels must continue to 
be deposited at the Buffalo ASF in order to be eligible for the DBMC 
rates. Barcoded machinable parcels for the Buffalo ASF service will be 
eligible for the parcel barcode discount when entered at the Pittsburgh 
BMC. Under this final rule, entry of Standard Mail, Parcel Select, and 
Bound Printed Matter machinable parcels sorted to the 5-digit ZIP Codes 
within the Buffalo sectional center facility (SCF) service area, as 
defined in DMM L005, would continue to be required to be deposited at 
the Buffalo SCF in order to qualify for the destination sectional 
center facility (DSCF) rate. Standard Mail machinable parcels claimed 
at DSCF rates and entered at Buffalo will continue to be eligible for a 
parcel barcode discount.
    Currently, all machinable parcels entered at the Buffalo ASF are 
sorted manually by the Postal Service to the first three digits of the 
delivery address ZIP Codes. Those parcels destined to addresses within 
the Buffalo ASF service are either further sorted to the Buffalo SCF or 
transported to SCFs in Rochester, Syracuse, Elmira, and Utica. At the 
SCFs, the parcels are sorted by 5-digit ZIP Code to the associated 
delivery offices and subsequently transported to those delivery 
offices.
    In contrast to this manual operation in Buffalo, the Pittsburgh BMC 
sorts machinable parcels on parcel sorting machines (PSMs) and 
finalizes the parcels to 5-digit ZIP Codes in one or two passes. 
Parcels destined for the Buffalo ASF service area are then transported 
directly from the Pittsburgh BMC to the appropriate SCFs. This rule 
change will minimize more costly and slower manual processing and 
provide more direct transportation of such parcels. The Postal Service 
believes that this realignment of ZIP Codes for DBMC rate eligibility 
between between the Pittsburgh BMC and the Buffalo ASF will provide 
consistent customer service by eliminating at least one step in the 
transportation process.
    This rule change will eliminate any confusion concerning the 
applicable standards for the deposit of DBMC machinable parcels in the 
affected service areas. This final rule contains the DMM standards 
adopted by the Postal Service after review of the comments that were 
submitted.

Evaluation of Comments From the Proposed Rule

    The Postal Service received written comments on the January 17 
proposed rule from three mailers and one mailer association.
    One commenter questioned the accuracy of the statement in the 
proposed rule that ``current records indicate that more than three 
years have passed since the Buffalo ASF has received any drop 
shipments.''
    The Postal Service acknowledges that the statement should have read 
``current records indicate that more than three years have passed since 
the Buffalo ASF has received any drop shipments of machinable 
parcels.''
    The same commenter suggested that the exception to allow mailers to 
divert machinable parcels from the Buffalo ASF to the Pittsburgh BMC is 
the real issue to be addressed. According to this commenter, mailers 
not party to the exception should not be penalized.
    This final rule formally designates the Pittsburgh BMC as the 
appropriate deposit point for machinable parcels claimed at DBMC rates 
destined for the Buffalo ASF service area. Moreover, the Postal Service 
believes that this change will ensure a fair and uniform rate 
application to all mailers depositing machinable parcels at the 
Pittsburgh BMC. Many of those mailers have been depositing machinable 
parcels destined

[[Page 30572]]

for the Buffalo ASF service area and zoning and rating those parcels 
from the Pittsburgh BMC.
    Another commenter implied that the proposed changes stem from 
possible mismanagement of operational resources at the Buffalo ASF, 
including inappropriate mail processing equipment. The commenter 
further states that the Postal Service is imposing increased DBMC rates 
on customers because of its own inadequacies. The commenter believes 
that the proposed changes are tantamount to a ``poorly concealed rate 
increase.''
    The changes announced in this final rule are not the result of 
mismanagement or inappropriate resource allocation but rather a 
reflection of effective cost management for mailers and the Postal 
Service. In addition, the changes in this final rule are not an attempt 
to increase rates by use of a technical regulatory change. Part of this 
management is the long-term strategy of realigning the Postal Service 
processing and transportation networks as a viable means to raise 
productivity, stabilize costs, and minimize postage rate increases.
    The diversion to the Pittsburgh BMC of machinable parcels destined 
for the Buffalo ASF service area is not the outcome of recent 
redirection of that volume by the Buffalo ASF. Almost from the 
inception of the DBMC entry rates on February 24, 1991, the majority of 
dropship parcel mailers have been depositing at the Pittsburgh BMC 
machinable parcels and some nonmachinable parcels destined for the 
Buffalo ASF. In fact, about 31 percent of the current parcel volume 
processed at the Pittsburgh BMC is destined for the Buffalo ASF. This 
large percentage is not surprising because western New York is not an 
originating area for large parcel shippers. As a result, the majority 
of parcel shippers who have parcels destined for the Buffalo ASF are 
also likely to have parcels destined for the Pittsburgh BMC service 
area.
    Based on the expected additional costs that the commenters or their 
clients may incur, all four commenters objected to the realignment, 
particularly the requirement to zone mail entered at the Pittsburgh BMC 
using the Pittsburgh zone chart instead of the Buffalo zone chart. 
Alternatives suggested included extending the effective date, either to 
the end of calendar year 2002, or the beginning of calendar year 2003, 
and developing an optional sort rate for packages presorted and 
containerized by 3-digit ZIP Codes prefixes and entered at the Buffalo 
ASF for cross-docking to SCFs. The comment suggesting the development 
of an optional sort rate for packages presorted and containized by 3-
digit ZIP Code prefixes and entered at the Buffalo ASF for cross-
docking to SCFs is beyond the scope of this rulemaking and is not 
addressed in this final rule.
    The Postal Service is indeed concerned about any financial burden 
that this final rule will place on parcel shippers. As a consequences, 
the Postal Service will delay required implementation of these changes 
to January 5, 2003. This delay should reduce any financial impact on 
mailers this year and, at the same time provide sufficient time to plan 
for significant or individual changes that would affect their current 
operations.
    One commenter noted that zoning Buffalo Parcel Select from 
Pittsburgh will raise customer rates by $0.89 per parcel. This 
commenter implied that DBMC rates as a whole are going up faster than 
DSCF and DDU rates frequently used by large package consolidators, 
leading the commenter to believe that the intent of the Postal Service 
is to drive customers to competitors.
    On one hand, the Postal Service does acknowledge that there will be 
some adjustments in postage paid because of the requirement that 
mailers zone machinable parcels destined for the Buffalo ASF from the 
Pittsburgh BMC. Not all increased costs, however, are attributed solely 
to postage. Depending on the size, weight, and distance of the parcel 
as well as associated transportation costs, mailers can benefit from 
the changes in this final rule because they are permitted to use one 
facility rather than two for the deposit of their mail for the same 
geographic area. In essence, they can benefit from reduced 
transportation costs.
    Although both the DDU and the DSCF rates for Parcel Select will 
have increases effective with the June 30, 2001, implementation of 
R2001-1 as announced in the Federal Register on April 16, 2001, 
adjustments were made to the DBMC rates to reflect increased postal 
costs for handling. The Postal Service introduced a separate 1-pound 
Parcel Post rate to mitigate increases in rates for lighter weight 
parcels. Increases in the DBMC rates are not part of any strategy to 
drive customers to competitors but to provide universal service within 
the guidelines of the standards that govern the Postal Service. 
Furthermore, customers who use package consolidators actually pay those 
consolidators higher rates for these services than the published DDU 
and DSCF rates.
    After full consideration of the comments received the Postal 
Service believes it appropriate to adopt, without revisions, the 
proposed changes in eligibility requirements.
    The Domestic Mail Manual is revised as follows: These changes are 
incorporated by reference in the Code of Federal Regulations. See 39 
CFR part 111.

List of Subjects in 39 CFR Part 111

    Administrative Practice and Procedure, 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, 3001-
3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Amend Domestic Mail Manual (DMM) modules E and L as follows:

Domestic Mail Manual (DMM)

E  Eligibility

* * * * *

E600  Standard Mail

* * * * *

E650  Destination Entry

* * * * *
5.0  DBMC DISCOUNT

5.1  Definition

    [Amend Exhibit 5.1 by showing realignment of eligible destination 
ZIP Codes for machinable parcels for the Buffalo ASF and Pittsburgh BMC 
entry facilities to read as follows:]

------------------------------------------------------------------------
 Eligible destination ZIP Codes               Entry facility
------------------------------------------------------------------------
 
*                  *                  *                  *
                            *                  *
130-136, 140-149 [Except         ASF BUFFALO NY 140
 machinable parcels].
150-168, 260-266, 439-447        BMC PITTSBURGH PA 15195
 [Except machinable parcels].
130-136, 140-168, 260-266, 439-  BMC PITTSBURGH PA 15195
 447 [Machinable parcels only
 or machinable parcels combined
 with bedloaded nonmachinable
 parcels].

[[Page 30573]]

 
 
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                            *                  *
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* * * * *

5.5  Additional Standards for Machinable Parcels

    [Amend 5.5a by adding the phrase ``except as shown in Exhibit 5.1'' 
to the second sentence to explain when sortation of parcels to ASFs is 
optional to read as follows:]
* * * * *
    a. Destination BMC/ASF Containers. Machinable parcels pallelized 
under M045 or sacked under M610 may be sorted to destination BMCs under 
L601 or to destination BMCs and ASFs under L601 and L602. When 
machinable parcels are sorted to both destination BMCs and ASFs under 
L601 and L602, they qualify for DBMC rates under 5.2. Except as 
provided in Exhibit 5.1, sortation of machinable parcels to ASFs is 
optional but is required for the ASF mail to be eligible for DBMC 
rates. * * *
* * * * *

E700  Package Services

* * * * *

E750  Destination Entry

E751  Parcel Select

* * * * *
1.0  BASIC STANDARDS
* * * * *
1.3  Definition
    [Amend Item and Exhibit 1.3 by showing realignment of eligible 
destination ZIP Codes for machinable parcels for the Buffalo ASF and 
Pittsburgh BMC entry facilities to read as follows:]
* * * * *
    b. Except as provided in Exhibit 1.3, pieces deposited at each BMC 
or ASF must be addressed for delivery within the ZIP Code range of that 
facility.

------------------------------------------------------------------------
 Eligible destination ZIP Codes               Entry facility
------------------------------------------------------------------------
 
*                  *                  *                  *
                            *                  *
130-136, 140-149 [Except         ASF BUFFALO NY 140
 machinable parcels].
150-168, 260-266, 439-447        BMC PITTSBURGH PA 15195
 [Except machinable parcels].
130-136, 140-168, 260-266, 439-  BMC PITTSBURGH PA 15195
 447 [Machinable parcels only
 or machinable parcels combined
 with bedloaded nonmachinable
 parcels].
 
*                  *                  *                  *
                            *                  *
------------------------------------------------------------------------

* * * * *

E752  Bound Printed Matter

* * * * *

2.0  Destination Bulk Mail Center (DBMC) Rates

* * * * *

2.3  Presorted Machinable Parcels

    [Amend 2.3 by adding the phrase ``except as shown in Exhibit 
E751.1.3'' to the third sentence to read as follows:]
    Presorted machinable parcels in sacks or on pallets at all sort 
levels may claim DBMC rates Machinable parcels palletized under M045 or 
sacked under M722 maybe sorted to destination BMCs under L601 or to 
destination BMCs and ASFs under L601 and L602. Except as provided in 
Exhibit E751.1.3, sortstation of machinable parcels to ASFs its 
optional but is required for the ASF mail to be eligible for DBMC 
rates. * * *
* * * * *

L  Labeling Lists

* * * * *

L600  Standard Mail and Package Services

L601  BMCs

    [Amend L601 by revising items to read as follows:]
* * * * *
    a. Standard Mail machinable parcels except ASF mail (other than 
mail for the Buffalo ASF service area) prepared and claimed at DBMC 
rates. Machinable parcels for the Buffalo ASF service area prepared and 
claimed at DBMC rates must be sorted to the Pittsburgh BMC.
* * * * *
    c. Bound Printed Matter machinable parcels except ASF mail (other 
than mail for the Buffalo ASF service area) prepared and claimed at 
DBMC rates. Machinable parcels for the Buffalo ASF service area 
prepared and claimed at DBMC rates must be sorted to the Pittsburgh 
BMC.
    e. Parcel Post except for ASF mail (other than mail for the Buffalo 
ASF service area) prepared and claimed at DBMC rates and nonmachinable 
BMC Presort or OBMC Presort rate mail. Machinable parcels for the 
Buffalo ASF service area prepared and claimed at DBMC rates must be 
sorted to the Pittsburgh BMC. Nonmachinable parcels for the Buffalo ASF 
service area claimed at DBMC rates may be sorted to the Pittsburgh BMC 
if bedloaded and presented with machinable parcels.
* * * * *

L602  ASFs

    Amend L602 by revising L602a, L602c, and L602e to read as follows:]
    L602 defines the service area by individual 3-digit ZIP Code prefix 
for Standard Mail and Package Services mail that must be sorted to 
ASFs.
    Use this list for:
    a. Standard Mail machinable parcels if ASF mail (other than mail 
for the Buffalo ASF service area) is prepared and claimed at DBMC 
rates. Machinable parcels for the Buffalo ASF service area prepared and 
claimed at DBMC rates must be sorted to the Pittsburgh BMC under L601.
* * * * *
    c. Bound Printed Matter machinable parcels if ASF mail (other than 
mail for the Buffalo ASF service area) is prepared and claimed at DBMC 
rates. Machinable parcels for the Buffalo ASF service area prepared and 
claimed at DBMC rates must be sorted to the Pittsburgh BMC under L601.
* * * * *
    e. Parcel Post machinable parcels if ASF mail (other than mail for 
the Buffalo ASF service area) is prepared

[[Page 30574]]

and claimed at DBMC rates. Machinable parcels for the Buffalo ASF 
service area prepared and claimed at DBMC rates must be sorted to the 
Pittsburgh BMC under L601. Nonmachinable parcels for the Buffalo ASF 
service area claimed at DBMC rates may be sorted to the Pittsburgh BMC 
under L601 if bedloaded and presented with machinable parcels.
* * * * *
[An appropriate amendment to 39 CFR part 111.3 will be published to 
reflect these changes.]

Stanley F. Mires,
Chief Counsel, Legislative.
[FR Doc. 02-11310 Filed 5-6-02; 8:45 am]
BILLING CODE 7710-12-M