[Federal Register Volume 68, Number 238 (Thursday, December 11, 2003)]
[Proposed Rules]
[Pages 69066-69069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30664]


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POSTAL SERVICE

39 CFR Part 111


Required Number of Pieces Increased for 5-Digit and 5-Digit 
Scheme Packages of Low-Weight Standard Mail Flats

AGENCY: Postal Service.

ACTION: Proposed rule.

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SUMMARY: The Postal Service proposes amending Domestic Mail Manual 
(DMM) standards by raising the minimum number of pieces at which 
required 5-digit and optional 5-digit scheme presort destination 
packages may be prepared in a Standard Mail job consisting of flat-size 
pieces that weigh no more than 5 ounces (0.3125 pound) and measure no 
more than \3/4\ inch thick. The maximum thickness permitted for 
nonautomation flats under DMM C050.3.0 and flats prepared in 5-digit 
scheme presort destination packages under DMM L007 is \3/4\ inch.
    Under current standards, mailers have the option to prepare 5-digit 
and 5-digit scheme presort destination packages (collectively referred 
to in this proposed rule as 5-digit packages) of flat-size pieces not 
more than \3/4 \ inch thick, regardless of weight, whenever there are 
as few as 10 pieces to the same 5-digit ZIP Code or the same 5-digit 
scheme destination in DMM L007. Under those same standards, mailers 
must prepare such packages when there are 17 or more pieces to these 
destinations. If a mailer selects an optional minimum 5-digit package 
size from 10 to 16 pieces, that same size must be used consistently 
throughout the mailing job for all 5-digit packages.
    Under the proposed changes, for Standard Mail mailings of flat-size 
pieces that weigh no more than 5 ounces, mailers would be required to 
prepare 5-digit packages whenever there are 15 or more pieces to a 
destination. Mailers would not be permitted to prepare such pieces in 
5-digit packages when there are fewer than 15 pieces to a 5-digit ZIP 
Code or optional 5-digit scheme destination. For mailings of pieces 
that weigh more than 5 ounces, mailers would be required to prepare 5-
digit packages whenever there are 10 or more pieces to a destination.

DATES: Comments must be received on or before January 12, 2004.

ADDRESSES: Send written comments to the Manager, Mailing Standards, 
ATTN: Neil Berger, U.S. Postal Service, 1735 North Lynn Street, Room 
3025, Arlington, VA 22209-6038. Written comments may be submitted via 
fax to 703-292-4058. Copies of all written comments will be available 
for inspection and photocopying between 9 a.m. and 4 p.m., Monday 
through Friday, at Postal Service Headquarters Library, 475 L'Enfant 
Plaza, SW., Room 11800, Washington, DC 20260-1540.

FOR FURTHER INFORMATION CONTACT: Cheryl Beller, Product Redesign, at 
(703) 292-3747; or Neil Berger, Mailing Standards, at (703) 292-3645.

SUPPLEMENTARY INFORMATION: Effective September 5, 2002, DMM M610 for 
nonautomation rate Standard Mail flats, DMM M820 for automation rate 
Standard Mail flats, and DMM 950 for advanced preparation options of 
Standard Mail flat-size pieces were revised to allow mailers to select 
a number from 10 to 17 as the minimum number of pieces at which 5-digit 
packages are prepared in a Standard Mail job of flat-size pieces no 
more than \3/4\ inch thick, without regard to the weight of the 
individual pieces. Prior to that date, mailers were required to prepare 
5-digit packages whenever there were 10 or more pieces to a 
destination. Effective January 9, 2003, mailing standards in the DMM 
were amended to permit the preparation of optional 5-digit scheme 
packages (DMM L007) using the same flexible minimum of 10 to 17 pieces. 
Under the current standards, mailers may prepare 5-digit (and 5-digit 
scheme) packages with as few as 10 pieces.

Increased Processing Efficiencies

    The Postal Service adopted the current optional 5-digit package 
minimum (optional with 10 to 16 pieces, required with 17 pieces) based 
in large part on an examination of the productivities and piece 
processing efficiencies of the automated flat sorting machine (AFSM) 
100, which can handle flat-size pieces up to \3/4\ inch thick.
    Initial analysis of piece, package, and container handling costs 
indicates that the appropriate minimum for 5-digit packages of Standard 
Mail flat-size pieces is, on average, above 10 pieces, and that the 
minimum could be increased for flats likely to be processed on the AFSM 
100. AFSM 100-compatible flats are limited to flat-size pieces 
measuring no more than 12 inches high, 15 inches long, and \3/4\ inch 
thick. Increasing the minimum for 5-digit packages could help reduce 
overall Postal Service processing costs with the additional AFSM 100 
piece handlings for pieces moving from 5-digit to 3-digit packages more 
than offset by reduced package handling costs. Package handling costs 
include processing the packages, either on a small parcel and bundle 
sorter (SPBS) or manually, and

[[Page 69067]]

opening the packages and preparing the mail for piece processing.

Reduced Mailer Production Costs

    Increasing the package minimum would also lower mailer production 
costs, as mailers would prepare fewer packages, with no negative impact 
on rates or service for pieces that move from 5-digit to 3-digit 
packages. Analysis of mailings that used a 17-piece minimum for 
preparing 5-digit packages showed reductions in the total number of 5-
digit and 3-digit packages.
    Specifically, for low-weight pieces, more packages were eliminated 
because more pieces that would have been prepared in small 5-digit 
packages of less than 17 pieces were added to existing 3-digit packages 
or combined into a single new 3-digit package, and these larger 
packages were still within the 20-pound maximum package weight. For 
heavier pieces, fewer packages were eliminated, and the savings in 
package handlings did not sufficiently offset the costs of the 
additional piece handlings.
    An informal survey of the mailing industry revealed that only a 
small number of mailers are taking advantage of the option to set their 
5-digit package minimum higher than 10 pieces (up to 17 pieces), 
particularly for mailings of low-weight pieces. With such limited 
participation by the mailing industry, the Postal Service and mailers 
are unable to realize the potential cost saving opportunities 
associated with fewer package handlings.

New Proposed Required Preparation

    Because the proposed changes in minimum package size would help 
reduce mail processing costs--which in turn would help to mitigate 
future rate increases--and because these proposed changes would have no 
negative impact on mailers' postage or Postal Service revenue, the 
Postal Service now believes that it would be in the mutual interests of 
the mailing industry and the Postal Service to implement the proposed 
changes before the next omnibus rate case.
    Pieces weighing 5 ounces or less represent approximately 80 percent 
of the volume of Standard Mail flats (both regular and nonprofit rates) 
not mailed at Enhanced Carrier Route rates. For heavier pieces weighing 
more than 5 ounces up to the maximum weight of less than 16 ounces, 
there is a significant drop in cost savings when a 5-digit package 
minimum higher than 10 pieces is used because fewer total packages, and 
associated reduced handlings, are eliminated to offset the increased 
piece handlings. The number of packages that can be eliminated is 
limited by the maximum package weight of 20 pounds and by restrictions 
on package height, such as the maximum height of 3 inches for some 
packages prepared in sacks, related to maintaining package integrity 
(see DMM M020).
    The fact that many mailers set their maximum package size below 20 
pounds (e.g., 15 pounds) for other reasons, such as creating more 
uniform packages for building pallets or to limit counterstacking 
within packages, also reduces the potential savings from using a higher 
package minimum. For pieces weighing up to 5 ounces, mailers would no 
longer be able to use an optional minimum higher than 15 pieces. 
Current standards permit a minimum up to 17 pieces. At the same time, 
under this proposed rule, mailers would not be permitted to prepare 5-
digit or optional 5-digit scheme packages when there are fewer than 15 
pieces to a 5-digit or 5-digit scheme destination.
    For Standard Mail mailing jobs consisting of flat-size pieces that 
weigh more than 5 ounces or that are more than \3/4\ inch thick 
(automation rate UFSM 1000-compatible pieces only), mailers would be 
required to prepare 5-digit and optional 5-digit scheme packages 
whenever there are 10 or more pieces to a 5-digit or 5-digit scheme 
destination. For ease of administration, mailers would also be required 
to use the 10-piece 5-digit package minimum for mailing jobs of 
nonidentical-weight pieces when those jobs include a combination of 
pieces that weigh up to and including 5 ounces and pieces that weigh 
more than 5 ounces. Mailers would no longer be permitted to use 
optional 5-digit package minimums greater than 10 pieces, and up to 17 
pieces, as currently permitted for such mailings.
    The Postal Service and mailers recognize that the optimal 5-digit 
package size can vary somewhat from mailing to mailing, based on 
mailing characteristics such as piece weight, presort density, piece 
thickness, maximum package size parameters selected, containerization 
methods, and manufacturing processes. However, for ease of use, a 
single minimum for pieces weighing up to and including 5 ounces and a 
single minimum for pieces weighing more than 5-ounces is proposed, 
rather than a range of minimums (that is, the current range of 10 to 17 
pieces).
    There are no changes proposed to the preparation standards for 
other classes of mail or for other Standard Mail processing categories 
and presort destination package levels. Mailers would continue to be 
required to prepare 3-digit and area distribution center (ADC) packages 
whenever there are 10 or more pieces to those destinations, and carrier 
route packages would continue to be required to contain a minimum of 10 
pieces. No changes are proposed for packages of automation rate flat-
size pieces measuring more than \3/4\ inch thick (UFSM 100-compatible 
pieces) or for any type of container (e.g., letter trays, sacks, 
pallets).

Current Recommended Preparation

    For mailings of pieces that weigh no more than 5 ounces and are 
currently prepared using a 10-piece package minimum, pieces now 
prepared in 5-digit packages containing from 10 to 14 pieces, would 
move either to an existing 3-digit package or be consolidated into new 
3-digit packages when the higher minimum of 15 pieces is used for 5-
digit package preparation. In either case, the overall number of 
packages prepared by mailers and processed by the Postal Service would 
decrease. For example, when the proposed 15-piece package minimum is 
used, 3.2-ounce catalogs currently prepared in five 5-digit packages 
that each contain from 10 to 14 pieces for different ZIP Codes within 
the same 3-digit ZIP Code destination, could be combined with other 
pieces already in a 3-digit package; alternatively, those pieces could 
be placed in one new 3-digit package (that weighs less than 20 pounds).
    The Postal Service recommends that mailers begin using a minimum of 
15 pieces for 5-digit and optional 5-digit scheme package preparation 
permitted under current mailing standards as soon as possible for 
mailings of pieces that weigh no more than 5 ounces. The Postal Service 
also recommends that mailers limit the number of packages they produce 
and take necessary steps to ensure package integrity, by setting their 
maximum package size as close to the maximums permitted in DMM M020, 
particularly for packages prepared on pallets (e.g., 20 pounds).
    Movement of pieces from 5-digit packages to 3-digit packages as a 
result of using a 15-piece minimum under the proposed changes would not 
impact postage paid by mailers because Standard Mail flats are eligible 
for the \3/5\ rates whether prepared in 5-digit or 3-digit packages, 
and placed on any pallet level, or when placed in 5-digit sacks, 
followed by 3-digit sacks, containing at least 125 pieces or 15 pounds 
of pieces.
    The Postal Service is proposing the required use of the 15-piece 5-
digit package minimum beginning April 4,

[[Page 69068]]

2004. At that time, mailings consisting of flat-size pieces that weigh 
more than 5 ounces or automation rate pieces that are more than \3/4\ 
inch thick regardless of weight would no longer be permitted to use a 
5-digit package minimum greater than 10 pieces. Also on that date, 
mailings of flat-size pieces that weigh no more than 5 ounces (and 
measure no more than \3/4\ inch thick) would not be permitted to use a 
5-digit package minimum other than 15 pieces.
    The April 4, 2004 required implementation date would allow mailers 
adequate time to install any software changes needed for compliance 
with the new standards and to test their systems. It will also ensure 
that all Postal Service personnel and systems are prepared for the 
change. April 4 is the first Sunday following the required use date 
(April 1, 2004) of the Postal Service Address Information System (AIS) 
database released February 1, 2004. This should enable software vendors 
to include the proposed changes in a regularly scheduled release of 
their software. Although mailers using the new 15-piece 5-digit package 
minimum would not be required to use Presort Accuracy Validation and 
Evaluation (PAVE)-certified software (except for palletized mailings 
prepared under the package reallocation option in DMM M045, or mailings 
prepared under DMM M920, M930 or M940), PAVE tests would be available 
for presort software vendors to test this new minimum.
    Although exempt from the notice and comment requirements of the 
Administrative Procedure Act [5 U.S.C. 553 (b), (c)] regarding proposed 
rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on 
the following proposed revisions of the Domestic Mail Manual (DMM) 
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, 414, 
416, 3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

    2. Revise the following sections of the Domestic Mail Manual (DMM) 
as follows:

Domestic Mail Manual (DMM)

* * * * *

E Eligibility

* * * * *

E600 Standard Mail

* * * * *

E620 Presorted Rates

1.0 BASIC STANDARDS

1.1 All Pieces

* * * * *

[Revise 1.1b to read as follows:]

    b. Except as provided in 1.2, be part of a single mailing of at 
least 200 pieces or 50 pounds of pieces qualifying for Presorted 
Standard Mail. Basic rate and \3/5\ rate pieces prepared as part of the 
same mailing are subject to a single minimum volume standard. Regular 
and Nonprofit mailings must meet separate minimum volumes.
* * * * *
2.0 RATES

[Revise 2.0 by reorganizing text to read as follows:]

2.1 Application

    Presorted rates for Regular and Nonprofit Standard Mail apply to 
letters, flats, and machinable and irregular parcels that meet the 
eligibility standards in E610 and the preparation standards in M045, 
M610, or, for flat-size mail only, M900.

2.2 Basic Rate

    The basic rate applies to pieces that do not meet the standards for 
\3/5\ rates described in 2.3.

2.3 \3/5\ Rates

    The \3/5\ rate applies to qualifying pieces if they are presented:
    a. For letter-size pieces (see C050.2.0), in quantities of 150 or 
more pieces for a single 3-digit area, prepared in 5-digit or 3-digit 
trays.
    b. For flat-size pieces (see C050.3.0):
    (1) In a 5-digit or 5-digit scheme (under M950) package of 10 or 
more pieces, or 15 or more pieces, as applicable; or in a 3-digit 
package of 10 or more pieces; placed in a 5-digit, 5-digit scheme 
(under M920), or 3-digit sack containing at least 125 pieces or 15 
pounds of pieces.
    (2) In a 5-digit package of 10 or more pieces, or 15 or more 
pieces, as applicable, that is part of a group of packages sorted to a 
merged 5-digit sack or merged 5-digit scheme sack (under M920) that 
contains either at least one qualifying carrier route package of 10 or 
more pieces, or contains at least 125 pieces or 15 pounds of pieces 
prepared in 5-digit packages (both automation and Presorted rate 5-
digit packages count toward the 125-piece or 15-pound sack minimum).
    (3) In a 5-digit or 5-digit scheme package of 10 or more pieces, or 
15 or more pieces, as applicable; or in a 3-digit package of 10 or more 
pieces; palletized under M045, M920, M930, or M940.
    c. For machinable parcels (see C050.4.0):
    (1) In a 5-digit scheme, 5-digit, ASF, or BMC sack containing at 
least 10 pounds of parcels. (The \3/5\ rates are available for parcels 
in 5-digit scheme or 5-digit sacks only when all possible 5-digit 
scheme and 5-digit sacks are prepared.)
    (2) On a 5-digit scheme, 5-digit, ASF, or BMC pallet. (The \3/5\ 
rates are available for parcels on 5-digit scheme or 5-digit pallets 
only when all possible 5-digit scheme and 5-digit pallets are 
prepared.)
    d. For irregular parcels (see C050.5.0), in a 5-digit scheme, 5-
digit, or 3-digit sack containing at least 125 parcels or 15 pounds of 
parcels.
    e. For commingled machinable and irregular parcels, in a 5-digit 
scheme or 5-digit sack containing at least 10 pounds of parcels. (The 
\3/5\ rates are available for parcels in 5-digit scheme or 5-digit 
sacks only when all possible 5-digit scheme and 5-digit sacks are 
prepared.)
* * * * *

E640 Automation Rates

1.0 REGULAR AND NONPROFIT RATES
* * * * *

1.5 Rate Application--Flats

    Automation rates apply to each piece that is sorted under M045, 
M820, or M900 into the qualifying groups:

[Revise 1.5a to read as follows:]

    a. Pieces in 5-digit or 5-digit scheme packages of 10 or more 
pieces, or 15 or more pieces, as applicable; or in 3-digit packages of 
10 or more pieces qualify for the \3/5\ automation rate.
* * * * *

M Mail Preparation and Sortation

* * * * *

M600 Standard Mail (Nonautomation)

M610 Presorted Standard Mail

* * * * *
4.0 PREPARATION--FLAT-SIZE PIECES
* * * * *

[[Page 69069]]

4.2 Packaging and Labeling

    Preparation sequence, package size, and labeling:

[Revise 4.2a to read as follows:]

    a. 5-digit (required):
    (1) For pieces each weighing no more than 5 ounces (0.3125 pound): 
15-piece minimum; red Label 5 or OEL.
    (2) For pieces each weighing more than 5 ounces (0.3125 pound): 10-
piece minimum; red Label 5 or OEL.
* * * * *

M800 All Automation Mail

* * * * *

M820 Flat-Size Mail

* * * * *
5.0 STANDARD MAIL
5.1 Packaging and Labeling
    Preparation sequence, package size, and labeling:

[Revise 5.1a and 5.1b to read as follows:]

    a. 5-digit scheme (optional):
    (1) For pieces weighing no more than 5 ounces (0.3125 pound) each: 
15-piece minimum; optional endorsement line (OEL) required.
    (2) For pieces weighing more than 5 ounces (0.3125 pound) each: 10-
piece minimum; OEL required.
    b. 5-digit (required):
    (1) For pieces weighing no more than 5 ounces (0.3125 pound) each 
and measuring no more than \3/4\ inch thick: 15-piece minimum; red 
Label 5 or OEL.
    (2) For pieces weighing more than 5 ounces (0.3125 pound) each or 
measuring more than \3/4\ inch thick: 10-piece minimum; red Label 5 or 
OEL.
* * * * *

M900 Advanced Preparation Options for Flats

* * * * *

M950 Co-Packaging Automation Rate and Presorted Rate Pieces

* * * * *
3.0 STANDARD MAIL
* * * * *

3.2 Package Preparation

    Package size, preparation sequence, and labeling:

[Revise 3.2a and 3.2b to read as follows:]

    a. 5-digit scheme (optional):
    (1) For pieces weighing no more than 5 ounces (0.3125 pound) each: 
15-piece minimum; optional endorsement line (OEL) required.
    (2) For pieces weighing more than 5 ounces (0.3125 pound) each: 10-
piece minimum; OEL required.
    b. 5-digit (required):
    (1) For pieces weighing no more than 5 ounces (0.3125 pound) each 
and measuring no more than \3/4\ inch thick: 15-piece minimum; red 
Label 5 or OEL.
    (2) For pieces weighing more than 5 ounces (0.3125 pound) each or 
measuring more than 3/4 inch thick: 10-piece minimum; red Label 5 or 
OEL.
* * * * *
    We will publish an appropriate amendment to 39 CFR 111.3 to reflect 
these changes if the proposal is adopted.

Neva R. Watson,
Attorney, Legal Policy and Ratemaking Law.
[FR Doc. 03-30664 Filed 12-10-03; 8:45 am]
BILLING CODE 7710-12-P