[Federal Register Volume 72, Number 244 (Thursday, December 20, 2007)]
[Notices]
[Pages 72395-72419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-24528]


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POSTAL REGULATORY COMMISSION

[Docket No. PI2008-1; Order Nos. 48 and 49]


Administrative Practice and Procedure, Postal Service

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: This document informs the public that the Commission is 
seeking comments on proposed service standard measurement and reporting 
systems for market dominant products. The proposal responds to 
provisions in a law enacted this year which require consultation 
between the Commission and the Postal Service on the establishment of 
service standards. The law also requires the use of an objective 
external measurement, unless the Commission approves an internal 
measurement system. Comments will assist the Commission in carrying out 
its legal obligations. This document identifies revised comment 
deadlines and reflects minor changes, reformatting, and footnote 
numbering.

DATES: Initial comments due January 18, 2008; reply comments due 
February 1, 2008.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 
202-789-6820 and [email protected].

SUPPLEMENTARY INFORMATION: Regulatory History, 72 FR 34424 (June 22, 
2007).

I. Background

    Section 301 of the Postal Accountability and Enhancement Act 
(PAEA), Public Law 109-435, 120 Stat. 3218, requires the Postal 
Service, in consultation with the Postal Regulatory Commission 
(Commission), to establish by regulation a set of modern service 
standards for market dominant products by December 20, 2007.\1\ By 
statute, the service standards must be measured by an objective 
external performance measurement system, unless the Commission approves 
the use of an internal measurement system. 39 U.S.C. 3691(b)(1)(D) and 
(b)(2).
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    \1\ Section 301 of the PAEA is codified at 39 U.S.C. 3691. The 
Postal Service published its proposed service standards October 17, 
2007. See 72 FR 58946.
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    The Commission and Postal Service have held a series of meetings to 
discuss service performance measurement issues.\2\ In response to those 
meetings, the Postal Service has submitted a formal proposal to the 
Commission setting forth several proposed systems for measuring the 
service performance of market dominant products.\3\ The

[[Page 72396]]

Proposal describes the measurement approaches the Postal Service seeks 
to use to measure the service performance of its various market 
dominant mail products. These approaches include, for example, the 
External First-Class (EXFC) measurement system to measure single-piece 
First-Class Mail, Delivery Confirmation for parcel-shaped mail, and a 
hybrid system for presort letters and flats that relies on Intelligent 
Mail Barcode (IMB) scans and independent, third-party reporters. In 
addition, the Proposal sets forth by product (or class of mail) the 
manner in which and the frequency with which the Postal Service 
proposes to report the service performance data. Lastly, because not 
all the proposed service performance measurement systems are fully 
operational, the Postal Service provides an adoption timeline and 
interim measurement solutions pending development and adoption of 
longer term measures.
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    \2\ During the course of developing service standards, the 
Postal Service has also discussed service performance measurement 
systems with workgroups of the Mailers Technical Advisory Committee.
    \3\ See USPS Service Performance Measurement Proposal, received 
November 29, 2007 (Proposal), which is reproduced below. The 
Proposal is also available on the Commission's Web site, http://www.prc.gov.
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    Measurements from existing systems, e.g., EXFC and Delivery 
Confirmation, will be utilized to report service performance in FY 
2008.\4\ Beginning in January 2009, when the use of IMBs will be a 
prerequisite for certain rate discounts, the Postal Service anticipates 
being able to report service performance data for all products, except 
for Within County Periodicals.
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    \4\ In FY 2008, pilot programs involving IMBs may yield 
performance measurements as well.
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    The Postal Service seeks approval to move forward with the 
development of the proposed measurement systems ``with the 
understanding that the approval is for the conceptual approach 
[discussed in the Proposal] and is subject to review of the implemented 
systems.'' Id. at 7. More specifically, it requests that the 
Commission:
    1. Approve the EXFC measurement system for service performance 
measurement of First-Class Mail single-piece letters and flats, and as 
a proxy for First-Class Mail presort flats. Id. at 7; see also id. at 
8, 17, and 22; \5\
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    \5\ To measure First-Class presort flats, the Postal Service 
proposes to use EXFC data for machine-addressed flats only. Id. at 
22.
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    2. Approve Delivery Confirmation service for service performance 
measurement of parcel-shaped market dominant mail. Id. at 7; see also 
id. at 22-23, 39, 52, and 53;
    3. Approve a hybrid measurement system based on IMB scans and 
independent, third-party stop-the-clock scans for service performance 
measurement of presort letters and flats, i.e., First-Class presort 
letters, Standard Mail letters and flats, and Periodicals letters and 
flats. Id. at 7; see also id. at 9, 20, 33, 35-36, and 43-44; \6\
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    \6\ Presort Package Services flats will be measured using the 
same approach as Presort Standard flats and be reported on a 
consolidated basis. Id. at 6, n.8, and 35. The Postal Service 
proposes not to measure single-piece Package Services flats due to 
the relatively small quantities of such mail. Id. at 6, n.9.
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    4. Approve the use of Red Tag and DelTrak as interim service 
performance measurements for Periodicals until adoption of IMBs is 
sufficient to permit use of a hybrid internal and external measurement 
system. Id. at 7; see also id. at 43-44;
    5. Approve the International Mail Measurement System (IMMS) for 
service performance measurement of First-Class Mail International 
letters, EXFC measurement of domestic single-piece First-Class Mail 
flats as a proxy for single-piece First-Class Mail International flats, 
and the measurement of single-piece First-Class Mail parcels as a proxy 
for First-Class Mail International parcels. Id. at 6-7; see also id. at 
27-30;
    6. Approve the use of internal data for service performance 
measurement of certain Special Services. Id. at 7; see also id. at 56-
59; and
    7. Approve the various service performance measurement reporting 
proposals specified in the Proposal. Id. at 7; see also id. at 25, 30, 
40, 46, 54, and 60.
    The Commission's role under section 3691 of title 39 is to consult 
with the Postal Service concerning the establishment of service 
standards for market dominant products. The service standards are 
required to be measured by an objective external performance 
measurement system, unless the Commission approves the use of an 
internal measurement system. Section 3691(b)(1)(D) and (b)(2). Given 
its obligations under the PAEA and the Postal Service's Proposal, which 
characterizes the various measurement approaches as either external or 
internal, the Commission is initiating this docket to solicit public 
comment on the Postal Service's proposed service performance 
measurement systems. Interested persons are invited to comment on any 
or all aspects of the proposed service performance measurement and 
reporting systems. Comments are due January 18, 2008.\7\ Reply comments 
may be filed no later than February 1, 2008.\8\ The Commission intends 
to evaluate the comments received and use those suggestions to help 
carry out its performance measurement responsibilities under the PAEA. 
All comments will be available for review on the Commission's Web site, 
http://www.prc.gov.
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    \7\ Changed from January 7, 2008 (per Order No. 48) by Order No. 
49.
    \8\ Changed from January 18, 2008 (per Order No. 48) by Order 
No. 49.
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[II.] United States Postal Service Service Performance Measurement

[A.] Notices

    CONFIRM[supreg], Express Mail[supreg], First-Class Mail[supreg], 
Intelligent Mail[supreg], Planet Code[supreg], PostalOne![supreg], 
Priority Mail[supreg], Standard Mail[supreg], usps.com[supreg], U.S. 
Postal Service[supreg], ZIP+4[supreg], Certified MailTM, 
Delivery ConfirmationTM, Onecode ACSTM, Post 
OfficeTM, Postal ServiceTM, P.O. 
BoxTM, Signature ConfirmationTM, and ZIP 
CodeTM are among the many trademarks owned by the United 
States Postal Service[supreg].\9\
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    \9\ (copyright) 2007 United States Postal Service. All rights 
reserved.
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[B.] Glossary of Terms

    The description of the proposed approach for service performance 
measurement includes references to certain postal terminology. For 
clarification, the following brief definitions and descriptions are 
provided.
    A service standard is defined as ``a stated goal for service 
achievement for each mail class.'' See Publication 32, Glossary of 
Postal Terms (May 1997, updated with Postal Bulletin revisions through 
July 5, 2007). The service standard for each market-dominant mail 
service incorporates the days-to-deliver for each 3-digit ZIP Code 
origin-destination pair within the Postal Service network. The 
standards serve as the benchmark for measuring service performance.
    The critical entry time (CET) is the latest time mail can be 
received at designated induction points in the postal network in order 
for it to be processed and dispatched in time to meet service 
standards.
    The start-the-clock is the date/time when the mail piece enters the 
mailstream. If the Postal Service accepts a mail piece before the 
posted CET for that day, the day of entry is designated as the ``start-
the-clock'' date. If the mail piece is accepted after the CET or 
dropped at a collection box, business mail chute, or Post Office 
location after the last posted pickup time or on a day when pickup does 
not occur, the mail piece will have a ``start-the-clock'' date of the 
following applicable processing day.
    The stop-the-clock is the date/time when delivery occurs or is 
initially attempted.

[[Page 72397]]

    The service performance is the number of calendar days from the 
``start-the-clock'' to the ``stop-the-clock.'' However, if the day of 
receipt occurs after a non-delivery day (Sunday or a holiday), then one 
day is subtracted for each non-delivery day.
    The Annual Compliance Report is the national service performance 
report for market-dominant mail service that is subject to compliance 
review on a fiscal year basis.

[C. Description of Proposal]

1. Introduction
    Among many requirements, the Postal Accountability and Enhancement 
Act (PAEA) instructs the United States Postal Service (Postal Service) 
to establish modern service standards for its market-dominant mail 
products by December 20, 2007. These standards should be designed with 
the intent of providing a system of objective external performance 
measurement. However, the law allows for the implementation of an 
internal measurement system instead of an external one, with the 
approval of the Postal Regulatory Commission (PRC).\10\
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    \10\ Postal Accountability and Enhancement Act. 39 U.S.C. 
3691(b)(1)(D) and 3691(b)(2). http://www.prc.gov/notices/PL109-435PAEA.pdf.
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    The proposed service performance measurement system is designed to 
provide the Postal Service and its customers with data sufficiently 
accurate and reliable for purposes of assessing the quality of mail 
service in a cost effective manner. The measurement system is also 
intended to provide the PRC with the ability to perform its 
responsibilities under the PAEA with a high degree of confidence. The 
following table summarizes the proposed measurement system. Each 
``start-the-clock'' and ``stop-the-clock'' event is described in detail 
in later sections.

                                                   Table 1.--Measurement Approach at Full Rollout \1\
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                                                         Single-piece                                                   Presort
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                                        Letters              Flats              Parcels             Letters              Flats              Parcels
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First-Class Mail................  EXFC..............  EXFC..............  Start: Delivery     Start: Documented   EXFC as Proxy \2\.  Start: Documented
                                                                           Confirmation        Arrival Time at                         Arrival Time at
                                                                           delivery scan.      Unit.                                   Unit.
                                                                          Stop: Delivery      Stop: External                          Stop: Delivery
                                                                           Confirmation        reporting.                              Confirmation
                                                                           delivery scan.                                              delivery scan.
Single-Piece First-Class Mail     IMMS \3\..........  EXFC as proxy \4\.  Single-Piece First- N/A...............  N/A...............  N/A.
 International                                                             Class Mail
                                                                           parcels as proxy
                                                                           \5\.
Periodicals \6\.................  N/A...............  N/A...............  N/A...............  Start: Documented   Start: Documented   N/A.
                                                                                               Arrival Time at     Arrival Time at
                                                                                               Unit.               Unit.
                                                                                              Stop: External      Stop: External
                                                                                               reporting.          reporting..
Standard Mail...................  N/A...............  N/A...............  N/A...............  Start: Documented   Start: Documented   Start: Documented
                                                                                               Arrival Time at     Arrival Time at     Arrival Time at
                                                                                               Unit.               Unit.               Unit.
                                                                                              Stop: External      Stop: External      Stop: Delivery
                                                                                               reporting.          reporting \7\.      Confirmation
                                                                                                                                       delivery scan.
Package Services................  N/A...............  N/A \8\...........  Start: Delivery     N/A...............  ..................  Start: Documented
                                                                           Confirmation                                                Arrival Time at
                                                                           delivery scan.                                              Unit.
                                                                          Stop: Delivery                                              Stop: Delivery
                                                                           Confirmation                                                Confirmation
                                                                           delivery scan.                                              delivery scan.
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\1\ Special Services are not included in Table 1 as they have different methods to ``start-the-clock'' and ``stop-the-clock'' from the market-dominant
  mail classes. The approach for measuring Special Services is explained in detail later in this document.
\2\ The Postal Service will use the External First-Class Mail Measurement System (EXFC) measurement for single-piece flats as a proxy for Presort First-
  Class Mail flats due to small volumes. The external measurement contractor will create test mail pieces with characteristics of Presort mail and seed
  them into the mailstream via retail.
\3\ The International Mail Measurement System (IMMS) is an external measurement system for which an independent measurement contractor seeds mail into
  the mailstream with a wide range of mail characteristics representing international mail.
\4\ The EXFC measurement for domestic single-piece First-Class Mail flats will serve as a proxy for single-piece First-Class Mail International flats
  due to the small volume in this category. After clearing customs, single-piece First-Class Mail International flats enter the domestic mailstream and
  are handled with domestic single-piece First-Class Mail flats.
\5\ The Postal Service will use the measurement for domestic single-piece First-Class Mail parcels as a proxy for single-piece First-Class Mail
  International inbound surface parcels due to the small volume in this category. After clearing customs, single-piece First-Class Mail International
  inbound surface parcels enter the domestic mailstream and are handled the same way as domestic single-piece First-Class Mail parcels.
\6\ Two external systems, Red Tag and Time Inc.'s DelTrak, will be used for measurement during FY 2009, as the Postal Service transitions to a
  statistically viable long-term solution.
\7\ Presort Package Services flats consist primarily of Bound Printed Matter, which has similar physical characteristics as Presort and can be scanned
  by external reporters. Accordingly, Presort Package Services flats will be measured via the same approach as Presort Standard Mail flats and reported
  together.
\8\ Single-piece Package Services flats make up less than 4% of all Package Services flats (excluding retail Media Mail, which was discontinued as a
  result of PRC Docket No. R2006-1) and only 1% of the total Package Services mail base; therefore, the Postal Service does not propose a single-piece
  Package Services flats measure. As a result, the Package Services measurement will be strictly parcel volume.


[[Page 72398]]

    The Postal Service believes that the proposed measurement and 
reporting systems described in greater detail below satisfy all 
legislative requirements and provide the PRC with sufficiently reliable 
data with which to perform its service performance accountability 
responsibilities. The proposed system is cost effective, statistically 
significant, sufficiently granular in detail, and includes numerous 
methods of auditability. The Postal Service is asking for approval to 
move forward with development of these systems with the understanding 
that the approval is for the conceptual approach documented here and is 
subject to review of the implemented systems. In order to begin 
reporting service performance metrics as quickly as possible, the 
Postal Service requests that the PRC do the following:
    Approve continued use of EXFC for service performance measurement 
of First-Class Mail single-piece letters and flats, and as a proxy for 
First-Class Mail Presort flats;
    Approve continued use of Delivery Confirmation service for service 
performance measurement of parcel-shaped components of each domestic 
market-dominant mail class;
    Approve the use of an external measurement system that supplements 
externally collected delivery data with Intelligent Mail scans for 
service performance measurement of Presort letters and flats;
    Approve the use of data from external measurement systems--Red Tag 
and DelTrak--as an interim service performance measurement for 
Periodicals until adoption of IMBs is sufficient to permit migration to 
the external measurement provider;
    Approve continued use of IMMS for service performance measurement 
of single-piece First-Class Mail International letters, and the use of 
domestic single-piece First-Class Mail flat performance as a proxy for 
single-piece First-Class Mail International flats;
    Approve the use of internal data for service performance 
measurement of Special Services; and
    Approve the reporting proposals specified.
2. Measurement Approach
    The Postal Service proposes continued use of EXFC to measure 
single-piece First-Class Mail letters and flats and IMMS to measure 
single-piece First-Class Mail International letters.\11\ For letter- 
and flat-shaped Presort mail within First-Class Mail, Periodicals, and 
Standard Mail services, the Postal Service has designed an external 
measurement approach that supplements mail scans available from an 
internal Intelligent Mail system with externally collected data. For 
parcel-shaped mail within First-Class Mail, Standard Mail, and Package 
Services,\12\ the Postal Service proposes to use an internal solution 
based on Delivery Confirmation scans obtained at acceptance and 
delivery. Additionally, the proposed performance measurement of various 
domestic special services will use an internal measurement approach.
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    \11\ The only major type of International Mail classified as 
market-dominant is single-piece First-Class Mail International. For 
single-piece First-Class Mail International flats and parcels, the 
Postal Service will use the domestic flats and parcel measurements 
as proxies, as explained in Section 4.
    \12\ Package Services market-dominant products include single-
piece Parcel Post, Bound Printed Matter, Library Mail, and Media 
Mail. For purposes of service standard establishment and service 
performance measurement, the market-dominant products designated by 
39 U.S.C. 3621(a) as single-piece Parcel Post, Bound Printed Matter, 
Library Mail, and Media Mail are grouped together as Package 
Services due to the small volumes.
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    The two critical elements for service performance measurement of a 
mail piece are the date/time when the mail piece enters the mailstream, 
otherwise known as the ``start-the-clock,'' and the date/time when 
delivery occurs or is attempted, otherwise known as the ``stop-the-
clock.'' The mail piece service performance can be viewed as the 
difference between the ``start-the-clock'' and ``stop-the-clock'' dates 
compared to the established service standard for the mail category. 
When assessing mail piece performance, the facility Critical Entry Time 
(CET) must be taken into account. The CET is the latest time mail can 
be received at designated induction points in the postal network in 
order for it to be processed and dispatched in time to meet service 
standards. If the Postal Service accepts a mail piece before the CET on 
a given processing day, the mail piece will have a ``start-the-clock'' 
date of the current day. If the mail piece is accepted after the CET, 
the mail piece will have a ``start-the-clock'' date of the following 
applicable processing day.

2.1 Presort Letter and Flat-Shaped Mail

    For Presort Standard Mail, First-Class Mail and Periodical letters 
and Standard and Periodical flats, the Postal Service proposes a 
service performance measurement system that uses the induction event to 
``start-the-clock,'' and an external, third-party ``stop-the-clock'' 
performed by reporters with scanners in their home. Additional data on 
mail piece tracking from Intelligent Mail Barcode (IMB) scans will also 
be used to supplement the external data. However, any data collected by 
the Postal Service will be provided to an independent, external 
contractor to calculate service measurement and compile the necessary 
reports.
    To facilitate an accurate ``start-the-clock,'' mailers will prepare 
mail with IMBs and submit electronic mailing information that describes 
the mail profile. During mail induction, the Postal Service will scan 
barcodes to record mail arrival at sites that are equipped with 
scanners. At other sites, the ``start-the-clock'' will be the 
documented arrival time at the Postal Service unit. In all cases, 
mailings are verified to ensure they meet acceptable mail preparation 
requirements to qualify for service performance measurement. Mail 
arrival times and mail preparation quality information will be made 
available to mailers to ensure validity.
    The proposed measurement system will determine the service 
performance by using data collected by the Postal Service on the time 
taken from the ``start-the-clock'' through processing. The external 
measurement contractor will combine this data with data from anonymous 
households and small businesses that report directly to an external 
service measurement contractor. The reporters in anonymous households 
will submit in-home delivery information to the external measurement 
contractor, and that information will be used to determine the ``stop-
the-clock'' service day. The end-to-end service measure will have two 
parts, (1) how long mail pieces take to get through processing, and (2) 
how long mail takes from the last processing scan to arrive in-home--
the second portion will be used as a delivery factor differential to 
determine the percent of mail not delivered on time even though it made 
through processing timely. For Presort letters and flats entered at 
Delivery Units that do not receive processing scans, postal delivery 
personnel will scan IMBs to indicate intention to deliver same-day. The 
delivery factor differential for the performance measurement between 
the date of the last IMB scan and the date reported in-home will be 
determined for each mail category. This factor represents last mile 
delivery performance. With this measurement approach, the core of the 
service performance score would be based on data provided by external 
reporters, which would make it easily auditable, and yet cost 
effective.
    Using external reporters, barcoded mail that falls out of 
automation, such as non-machinable and not flat-

[[Page 72399]]

machinable (NFM) mail, will be included in service performance 
measurement. To ensure that the external service measurement contractor 
is able to measure service performance for properly prepared and 
addressed mail pieces, the Postal Service will provide the contractor 
with mail quality information that it derives by scanning IMBs.
    The proposed approach leverages data from internal systems to 
enhance measurement for Presort letters and flat-shaped mail has 
several key advantages: greater representation of mail characteristics; 
allows for richer diagnostics; and provides opportunities to reduce the 
cost of measurement.

2.2 Requirements for Presort Mailers

    Since the Postal Service measurement system for letter and flat-
shaped mail is dependent on the IMB, the Postal Service will require 
the use of IMBs to qualify for automation discounts as of January 2009. 
It is important to note that the IMB alone does not provide enough 
information for service performance measurement. The mailer adoption 
rates projected throughout this document include both adoption of the 
IMB as well as the adoption of electronic mailing information. For 
service performance measurement purposes, mailers will need to:
    Prepare mailings using the Intelligent Mail series of barcodes to 
provide a sufficient level of uniqueness and abide by mail preparation 
requirements to ensure that the mailings are automation-compatible; 
\13\ and
    Submit electronic mailing information describing the mail contents 
and Intelligent Mail barcodes used.
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    \13\ Domestic Mail Manual sections 200.3.1 through 200.3.14. 
Physical Standard Mails for Automation Letters and Cards. Domestic 
Mail Manual sections 300.3.1 through 300.3.14.
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    Service performance measurement will depend on high-quality mail 
presented to the Postal Service. The Postal Service requires that mail 
meet the required mail preparation criteria. The quality of the mail 
will be verified by either Seamless Acceptance, semi-automated 
verification such as MERLIN, or manual verification processes. Under 
the Seamless Acceptance verification process, certain characteristics 
of mail will be inspected while mail is processed in the mailstream. 
Because incorrectly addressed pieces and improperly prepared mail make 
it impossible in many cases to meet the service standard, only mailings 
that meet acceptable mail preparation criteria will be included for 
service measurement.

2.3 Parcels

    For parcel-shaped mail within First-Class Mail, Standard Mail, and 
Package Services, the Postal Service will use an internal solution 
based on Delivery Confirmation scans obtained at acceptance and 
delivery. The Postal Service currently measures service performance for 
Retail parcels via Delivery Confirmation barcode scans. The existing 
Delivery Confirmation performance reports for mail originating at 
postal retail units can be used in the short-term to measure the 
service performance of all Package Services until service measurement 
can be extended to Presort parcels. For reporting purposes, First-Class 
Mail parcels will be included with the First-Class Mail aggregated 
performance results, Standard Mail parcels will be included with the 
Standard Mail aggregated performance results, and the Package Services 
aggregated performance results will include only parcel volume.
    Parcel-shaped Retail mail will use the Delivery Confirmation scan 
at the retail counter as the ``start-the-clock.'' Parcel-shaped Presort 
mail will use the documented arrival time at the postal unit as the 
``start-the-clock.'' For Presort parcels, validation similar to that 
for letters and flats will be performed to ensure that the proper 
parcels were dropped at the correct postal facility.
    The ``stop-the-clock'' is the Delivery Confirmation scan performed 
by postal delivery personnel at delivery.\14\ Since postal personnel 
scan virtually every piece with a Delivery Confirmation scan at 
delivery, the measurement system is truly an end-to-end performance 
system. In addition, the sender has access to the Delivery Confirmation 
``stop-the-clock'' information from usps.com and, thus, can 
independently verify the delivery date.
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    \14\ Carriers en-route and clerks at post office boxes.
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    More detail on parcels can be found under the specific class 
descriptions below.

2.4 Reporting

    The Postal Service will use an independent, external contractor to 
prepare service performance reports for domestic First-Class Mail, 
Periodicals, Standard Mail, and single-piece First-Class Mail 
International letters. For the letter- and flat-shaped components of 
its market-dominant mail classes, the Postal Service's external 
contractor will employ reporters equipped with handheld scanners who, 
each day, will scan the IMB on live mail pieces received at their 
delivery addresses. The reporters will transmit scan data back to the 
external contractor and the scans will be used as the ``stop-the-
clock'' for the mail pieces. Since there is considerable set-up 
associated with this type of system, the Postal Service will begin 
reporting from this system in FY 2009.
    External ``stop-the-clock'' scanning offers many benefits to the 
Postal Service, the PRC, and mailers concerning the accuracy and 
auditability of service performance measurement:
    Last-mile sampling data will be used to provide the granularity 
required for the district level reporting;
    Association of the reporter scan data to the final Mail Processing 
Equipment scan will be used to assess and correct any last mile 
failures;
    Mail pieces used will have no distinguishing features; and
    The volume of mail going to a reporter will remain unchanged.

The Postal Service plans to continue collecting performance data for 
parcels within each domestic market-dominant mail class as it does 
today based on Delivery Confirmation acceptance and delivery scans. The 
Postal Service will send performance data for First-Class Mail parcels 
and Standard Mail parcels to the external service performance 
contractor for consolidated reporting into each mail class' reporting 
measurement. Service Performance for Package Services parcels and 
Special Services will be reported by the Postal Service. Quarterly 
reports will include data on the percentage of mail delivered on time 
as well as the percentage of mail delivered within 1-day, 2-days, and 
3-days of the standard being measured. Annual compliance reports will 
include the annual goal and the annual percentage of mail for each 
class delivered on time or the percentage of special services provided 
on time by service.

2.5 Timeline

    The Postal Service will use a phased rollout of the service 
performance measurement system, which will correspond with Presort-
mailer adoption of the IMBs and other needed electronic mailing 
information. A significant adoption of IMBs by presort mailers is 
expected by FY 2009. This will provide sufficient representative volume 
to provide statistically valid judgment.\15\
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    \15\ Excludes Periodicals Mail, which will cutover in 2009.
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    Some components of the proposed measurement system are already in 
place. The Postal Service will continue

[[Page 72400]]

to use EXFC to measure single-piece First-Class Mail letters and flats, 
as well as IMMS to measure single-piece First-Class Mail International 
letters. EXFC and IMMS are specifically designed to be representative 
of those mailstreams and already provide an external, statistically 
valid performance measurement. Measurement is also becoming available 
for Package Services parcels entered at retail.\16\ The existing 
Delivery Confirmation performance reports for mail originating at 
postal retail units can be used in the short-term to measure the 
service performance of all Package Services until service measurement 
can be extended to Presort parcels.
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    \16\ Under Order No. 43, the PRC has classified all inbound 
single-piece surface parcels tendered at Universal Postal Union 
inward land rates in the market-dominant category. This mail 
includes surface parcels, which enter the United States via surface 
transportation at the New Jersey International Bulk Mail Center, as 
well as surface airlift parcels, which enter at the five 
International Service Centers in Miami, Chicago, Los Angeles, New 
York JFK, and San Francisco. Once surface parcels clear customs, 
they are transferred from the acceptance facility to a Bulk Mail 
Center (BMC). Once entered into the BMC network, inbound parcels 
undergo the same processing as domestic single-piece Package 
Services parcels. Because the volume of the inbound surface parcels 
is small in proportion to other market-dominant categories, creating 
a separate measurement system for these parcels is not cost-
justified. Given that inbound surface parcels are handled through 
the domestic BMC network, the Postal Service submits that the 
service performance measurement statistics for corresponding 
domestic surface parcels serves as a reasonable proxy for 
International Mail inbound surface parcels.
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    Although use of the IMB will not be required until January 2009, 
several Presort mailers have already adopted the IMB and submit 
electronic mailing information. Pilot programs are currently underway 
for measurement of Presort First-Class Mail and Standard Mail. Mailer 
adoption rates are expected to continue growing.
    Toward the end of 2008, external reporters will be trained to use a 
new scanning device for in-home delivery reporting of all mail received 
that contains an IMB. Beginning in 2009, IMB and electronic mailing 
information adoption will occur in sufficient quantity that measurement 
based on scans generated by external reporters will provide 
statistically valid measurements for service performance of Presort 
First-Class Mail letters and Standard Mail.
    For Periodicals mailers, adoption of IMBs and electronic mailing 
information is projected to be slower. Measurements from DelTrak and 
Red Tag, which are two external measurement systems, will be used for 
measurement during a portion of FY 2009 as the Postal Service 
transitions to a statistically viable long-term solution using the same 
methodology explained above.

                                  Table 2.--Measurement Implementation Timeline
----------------------------------------------------------------------------------------------------------------
                                             January 2008               FY 2009                  FY 2010
----------------------------------------------------------------------------------------------------------------
First-Class Mail Single-Piece Letters  EXFC...................  EXFC...................  EXFC.
 and Flats.
First-Class Mail Presort Flats and     EXFC as Proxy..........  EXFC as Proxy..........  EXFC as Proxy.
 Single-Piece International Mail
 Flats.
Single-Piece First-Class Mail          IMMS...................  IMMS...................  IMMS.
 International Letters.
First-Class Mail Presort Letters.....  Intelligent Mail Pilot.  Reporter + IMB/          Reporter + IMB/
                                                                 Electronic Mailing       Electronic Mailing
                                                                 Information (25-50% of   Information (50-75% of
                                                                 system).                 system).
First-Class Mail Parcels\1\ and        System Setup and         Retail and Presort       Retail and Presort
 International Mail Parcels.            Development.             Delivery Confirmation    Delivery Confirmation
                                                                 Sample (5-10% system).   Sample (5-10% system).
Standard Mail Letters and Flats \2\..  Intelligent Mail Pilot.  Reporter + IMB/          Reporter + IMB/
                                                                 Electronic Mailing       Electronic Mailing
                                                                 Information (25-50% of   Information (50-75% of
                                                                 system).                 system).
Standard Mail Parcels \3\............  System Setup and         Delivery Confirmation    Delivery Confirmation
                                        Development.             Sample (5-10% of         Sample (10-25% of
                                                                 system).                 system).
Periodicals Letters and Flats........  Red Tag/DelTrak System   Red Tag/DelTrak          Reporter + IMB/
                                        Review.                  Reporter + IMB \4\.      Electronic mailing
                                                                                          information \5\ (25-
                                                                                          75% of system).
Periodicals: Within County \6\.......                           Red Tag................
Package Services Parcels (includes     Retail Only (15%         Retail and Presort       Retail and Presort
 Bound Printed Matter, Library Mail,    Retail).                 Delivery Confirmation    Delivery Confirmation
 Media Mail and Parcel Post).                                    Sample (5-10% system).   Sample (10-25%
                                                                                          system).
Special Services.....................  System Setup and         Internal Measurement...  Internal Measurement.
                                        Development.
----------------------------------------------------------------------------------------------------------------
\1\ First-Class Mail parcels will be rolled into the First-Class Mail measurement based on percent of mail.
\2\ Presort Package Services flats are included with Standard Mail flats.
\3\ Standard Mail parcels will be rolled into the Standard Mail measurement based on percent of mail.
\4\ Once a threshold is met for IMB statistical validity, which the Postal Service expects to occur in 2009, the
  Postal Service plans to cutover to reporting via IMB scanning. Red Tag and DelTrak will be used for reporting
  in 2009 until the cutover occurs; however, the long-term measurement approach for Periodicals is planned for
  2010, subject to the considerations expressed above in fn. 16.
\5\ The Postal Service may elect to have its external provider use data from DelTrak or Red Tag even in future
  years if it proves to increase the overall robustness of the data and the statistical validity.
\6\ The Postal Service is still attempting to determine how an accurate measurement system for In-County
  Periodicals could be developed. In the interim, the Postal Service is hopeful that existing systems like Red
  Tag could be expanded to provide data in the short-term and that mailer adoption of IMBs will provide
  additional granularity in the long-term.

3. First-Class Mail

3.1 Background

    First-Class Mail pieces represented 46.0% of the overall mail 
volume in FY 2006,\17\ with nearly 98 billion pieces. Of First-Class 
Mail, 42.5% are single-piece letters or flats, 0.36% are single-piece 
parcels, 55.9% are Presort letters, 1.0% are Presort flats, and 0.194% 
are Presort parcels. The Postal Service plans to measure each of these 
different segments and report a weighted average measurement. Below 
Table 3--First-Class Mail Volume illustrates the make-up of First-Class 
Mail by entry volume and shape. The table also illustrates the 
percentage that the First-Class Mail segments represent within the 
overall mailstream.
---------------------------------------------------------------------------

    \17\ http://www.usps.com/financials/_pdf/Fy2006_RPWsummaryreport.pdf.

[[Page 72401]]



                                                            Table 3.--First-Class Mail Volume
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                            Single-piece                             Presort
                                                              ------------------------------------------------------------------------------    Total
                                                                 Letters       Flats       Parcels      Letters       Flats       Parcels     (percent)
                                                                (percent)    (percent)    (percent)    (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
First-Class Mail.............................................        39.06         3.49         0.36         55.9          1.0         0.19          100
Overall Mailstream...........................................         18.0          1.6         0.17         25.7         0.47         0.09         46.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

3.2 First-Class Mail Single-Piece Letters and Flats

    Collection boxes and office building chutes are the primary methods 
for entering First-Class Mail single-piece letters and flats. Combined, 
this mail represents 19.6% of the total mailstream. Service performance 
is currently measured though EXFC and, subject to PRC approval, the 
Postal Service plans to continue to use EXFC for this purpose.
    EXFC currently has approximately 13,000 reporters and measures 2.7 
million mail pieces each year. EXFC continuously measures 463 3-digit 
ZIP Code service areas selected based on geography and volume density. 
Approximately 90% of First-Class Mail volume originates and 80% 
destinates in these EXFC measurement areas. EXFC mail pieces are 
designed to resemble the rest of the mailstream; pieces are hand- or 
machine-addressed, stamped or metered, and are of different colors, 
sizes, and weights. The Postal Service intends to expand the use of 
EXFC in FY 2009 to cover nearly all 3-digit ZIP Code areas.
3.2.1 Statistical Validity
    Each EXFC postal administrative reporting district currently 
receives approximately 5,000 EXFC mail pieces with an overnight service 
standard, 1,500 pieces with a two-day standard, and 1,500 pieces with a 
three-day standard each quarter. The original EXFC system used a 
precision level of +/-3% to produce statistically valid results at the 
postal administrative district level over an entire postal quarter. To 
reach this level of statistical validity, a certain number of pieces 
must be mailed during a given test period. Over the years, the Postal 
Service has increased the original sample size, which has driven the 
precision level to a much narrower variance and enhanced the system's 
accuracy. Precision levels at the district level for the annual results 
are now typically under +/-1% for each service standard. To ensure the 
integrity of the measurement, the Postal Service does not know where 
EXFC mail is being dropped or received.
    At the national level, the current system has a precision level of 
+/-0.05% across all three days in the current First-Class Mail service 
standard range (overnight, two-day, three-day) over an entire fiscal 
year.
    The EXFC system has been in place since 1990 and provides accurate, 
independent, and externally generated service performance results. 
Quality reviews are conducted for droppers and reporters, and data are 
reviewed on a daily, weekly, cross-weekly, monthly, and quarterly 
basis.
3.2.2 ``Start-the-Clock''
    The date/time that the mail piece is dropped into the collection 
box, business mail chute, or at a Post Office location is the ``start-
the-clock.'' Mail piece droppers report the ``start-the-clock'' 
directly to the external service measurement contractor. If a mail 
piece is dropped at a collection box, business mail chute, or Post 
Office location after the last posted pickup time or on a day when 
pickup does not occur, the next pickup day will be used as the ``start-
the-clock.''
    The induction points for the ``start-the-clock'' are determined 
before the start of each quarter. Droppers are provided with a listing 
of collection boxes that they are allowed to use for their assigned 
inductions in a given 3-digit ZIP Code service area. Enough locations 
are chosen to ensure a certain amount of overage, to accommodate any 
unforeseen issues that may arise with the selected induction points. 
The collection boxes are chosen in a random selection process with 
replacement, meaning that the same induction location may be chosen 
multiple times. The induction points are weighted going into the 
selection process, so that locations in 5-digit ZIP Code areas with a 
larger number of collection boxes have a greater chance of being 
selected than locations in ZIP Codes areas with a smaller number of 
collection boxes. The external contractor monitors drop compliance 
continuously throughout the quarter to ensure proper diversification of 
mail locations.
    EXFC origin-destination mail flows are based on estimated 3-digit 
ZIP Code origin-destination pair volume flows for corresponding 3-digit 
ZIP Code pairs over the past three fiscal years. The number of pieces 
entered from each district is proportionate to the origin-destination 
volumes by service standard. The measurement system will be expanded to 
nearly all 3-digit ZIP Codes in FY 2009.
3.2.3 ``Stop-the-Clock''
    The date/time that the mail piece is received at a household, small 
business, or Post Office Box is reported as the ``stop-the-clock'' 
directly by the reporter to the external contractor for EXFC reporting 
purposes. The service performance is the number of calendar days from 
the ``start-the-clock'' to the ``stop-the-clock.'' However, if the day 
of receipt occurs after a non-delivery day (Sunday or a holiday), then 
one day is subtracted for each non-delivery day.

3.3 First-Class Mail Presort Letters

    The primary induction method for Presort letters is bulk entry at 
postal mail processing plants and Business Mail Entry Units (BMEUs) 
across the United States. Presort First-Class Mail letters represent 
25.7% of the total mailstream. The measurement approach proposed by the 
Postal Service uses externally generated scans of mail pieces 
containing IMBs by reporters to record in-home delivery dates. In 
combination with Intelligent Mail scan data collected by the Postal 
Service, this approach enables the granular level of reporting being 
sought by the mailing industry.
3.3.1 Adoption Rates
    Participation in the Intelligent Mail pilot, the benefits of the 
IMB for special services, and the expectation that the Postal Service 
will require IMBs on mail subject to automation discounts are factors 
that, in combination, are expected to generate 13.6 billion Presort 
letters with IMBs and the other needed electronic mail information by 
January 2009. This volume will satisfy the conditions for performance 
measurement in FY 2009. With required use by January 2009, the minimum 
estimates for mailer adoption are:
    January 2009: 25% of First-Class Mail Presort letters; and

[[Page 72402]]

    January 2010: 50% of First-Class Mail Presort letters.
3.3.2 Statistical Validity
    We plan to use the last mile estimate based on combined data from 
presorted First-Class letters with IMBs and the EXFC pieces with IMBs. 
Assuming that 25% of presorted First-Class mail will have an IMB and be 
measurable, the average district will have approximately 6,775 pieces 
per quarter upon which to base the last mile estimates when presorted 
First-Class mail is combined with available data from EXFC. The last 
mile factor estimate with a 95% confidence interval would be +/-0.5% at 
the district level on average. Current EXFC data indicates that 
district last mile factors vary over time and geography, but generally 
fall in the 2-3% range. The Postal Service anticipates a precision 
between +/-0.5% and +/-0.6% as illustrated in the table below.

                            Table 4.--Precision for First-Class Mail Presort Letters
----------------------------------------------------------------------------------------------------------------
                                                                                    Coverage of
                                                                     Last mile         IMB +
                                                    Confidence        factor        electronic       Precision
                                                     interval        estimate         mailing        (percent)
                                                     (percent)       (percent)      information
                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
First-Class Mail Presort Letters................              95               2              25          +/-0.5
Presort Letters.................................              95               3              25          +/-0.6
----------------------------------------------------------------------------------------------------------------

    It should also be noted that the last mile factor is one piece of 
the overall service performance estimate, with the performance of the 
acceptance to final processing scan being the other. The availability 
of billions of data records to sample from to form these estimates 
means that the Postal Service can economically take large samples for 
individual report cells (e.g. Baltimore SCF-entry Standard Mail, 
Chicago 3-day First-Class Presorted Mail). The estimated precision 
levels will be shared with the PRC during the development process.
3.3.3 ``Start-the-Clock''
    Mailers are required to prepare mail with IMBs and submit 
electronic mailing information listing the IMBs used. Mail is verified 
to ensure it meets mail preparation criteria. Mail that does not meet 
mail preparation standards will be excluded from service performance in 
order to ensure that the system produces a valid, reliable measurement 
score. The ``start-the-clock'' will be the documented arrival time at 
the Postal Service unit. Mail arrival times and mail preparation 
quality information will be made available to mailers.
3.3.4 ``Stop-the-Clock''
    External reporters will be equipped with handheld scanners capable 
of scanning IMBs and reporters will scan all mail they receive that 
contains an IMB. These scan data will be transmitted to the external 
reporting system and will be the ``stop-the-clock'' for the 
individually scanned mail pieces. By comparing the date of the final 
Postal Service scan with the actual receipt date for these pieces, the 
external measurement contractor will calculate a factor for the actual 
service performance of the last mile for First-Class Mail Presort 
letters. This factor will be combined with the Intelligent Mail data to 
report the end-to-end service performance measurement.
    The use of external reporters will allow for measurement of 
manually processed mail and mail that falls out of automation to be 
included in service performance measurement. The external reporters 
will provide the actual ``stop-the-clock'' and the external provider 
will calculate the service performance for those pieces.

3.4 First-Class Mail Presort Flats

    Presort First-Class Mail flats represent only 0.47% of the total 
mailstream, producing one of the smallest mail categories. This low 
volume makes creating a statistically valid measurement system 
difficult. Since there are four times as many single-piece First-Class 
Mail flats as there are Presort flats, and the single-piece and Presort 
flats mailstreams are combined in operations, the Postal Service will 
use the EXFC measurement of single-piece First-Class Mail flats as a 
proxy for Presort flats. In order to determine a more accurate estimate 
for First-Class Mail Presort flats, the portion of EXFC that reflects 
this mail category, i.e., machine-addressed flats, rather than hand-
addressed, will be used.

3.5 First-Class Mail Retail Parcels

    The Postal Service currently measures service performance for 
retail parcels via Delivery Confirmation barcode scans. This approach 
for measuring performance is working well, so the Postal Service will 
continue using this measurement approach for this mail shape. For 
reporting purposes, performance results will be sent to the external 
measurement contractor for inclusion into the First-Class Mail 
aggregated performance results. First-Class Mail Retail parcels 
represent under 0.4% of all First-Class Mail and less than 0.2% of the 
total mailstream.
3.5.1 Statistical Validity
    In 2006, just over 14 million First-Class Mail Retail parcels 
included Delivery Confirmation service, representing 4% of these 
parcels. While this represents low usage of the Delivery Confirmation 
service, it is still representative of the population and, hence, 
provides an acceptable basis for service performance measurement. The 
Postal Service will continue to use Delivery Confirmation scans as long 
as they continue to provide accurate, auditable data for service 
performance measurement.
3.5.2 ``Start-the-Clock''
    Primarily, the ``start-the-clock'' occurs at the retail counter 
when customers purchase Delivery Confirmation for parcels they intend 
to mail. When postal retail clerks apply Delivery Confirmation forms to 
these parcels, they scan the Delivery Confirmation barcodes on the 
forms. The scan is captured via either a Point-of-Sale (POS) terminal 
at the retail counter or an Intelligent Mail handheld scanning device. 
Since the customer is present at the ``start-the-clock'' event and 
receives a time-stamped receipt with purchase, there are several 
validation points.
3.5.3 ``Stop-the-Clock''
    At delivery, the carrier will scan the Delivery Confirmation 
barcode to denote delivery or that delivery was attempted, either of 
which will serve to ``stop-the-clock'' for service performance 
measurement.
    Retail parcel reporting for service performance measurement will 
use the date of the ``start-the-clock'' event and count the days 
between the ``start-the-clock'' and the ``stop-the-clock'' to determine 
delivery performance. A

[[Page 72403]]

comparison is then made to the relevant service standard to determine 
if the parcel received on-time service performance.

3.6 First-Class Mail Presort Parcels

    One differentiating characteristic of First-Class Mail Presort 
parcels is the propensity of mailers to apply Delivery Confirmation. 
First-Class Mail Presort parcels with Delivery Confirmation service 
comprise almost half of the mail category. This demonstrates that there 
are ample parcels that can be included in service performance 
measurement of this mail category. Using Delivery Confirmation scan 
data, performance results will be calculated by the Postal Service and 
then sent to the external measurement contractor for inclusion into the 
First-Class Mail service aggregated performance results.
3.6.1 Adoption Rates
    Many mailers already meet the electronic mailing information 
requirements necessary for performance measurement; however, the Postal 
Service plans to expand internal Delivery Confirmation sampling 
processes that verify shipment contents and the accuracy of the 
electronic mailing information. As verification becomes more prevalent, 
the volume of parcels that are measured will increase.
3.6.2 Statistical Validity
    With the selected approach, the performance of an estimated 4.5 
million parcels will be sampled for service measurement in FY 2009. 
Since half of the mail category contains Delivery Confirmation service, 
concerns about the representativeness of the sample used to measure 
service performance are minimal.
3.6.3 ``Start-the-Clock''
    For service performance measurement, mailers are required to 
prepare mail with the Delivery Confirmation barcode and submit 
electronic mailing information listing the Delivery Confirmation 
barcodes used. Mail is verified to ensure it meets mail preparation 
criteria. Mail that does not meet mail preparation standards will be 
excluded from service performance in order to ensure that the system 
produces a valid, reliable measurement score. The ``start-the-clock'' 
will be the documented arrival time at the Postal Service unit. Mail 
arrival times and mail preparation quality information will be made 
available to mailers.
3.6.4 ``Stop-the-Clock''
    Postal delivery personnel scan the Delivery Confirmation barcode 
upon delivery and can denote the delivery or attempted delivery, either 
of which will serve to ``stop-the-clock'' for service performance 
measurement.

3.7 Reporting for First-Class Mail

3.7.1 Quarterly Reporting
    The Postal Service proposes to continue reporting single-piece 
First-Class Mail performance as it does today, with the addition of 
single-piece First-Class Mail parcels.
    For Presort First-Class Mail pieces, the Postal Service proposes 
quarterly reporting that will measure service performance separately by 
day, i.e., overnight, 2-day, and 3-day/4-day, for each district. This 
greatly expands the number of performance measures reported, yet is 
consistent with the way EXFC currently reports single-piece First-Class 
Mail service. The use of data from the final Intelligent Mail scans 
allows reporting at a higher degree of granularity. The quarterly 
reports will provide on-time performance for letter, flat, and parcel-
shaped Presort First-Class Mail pieces. The Postal Service will send 
performance data for First-Class Mail parcels to the external service 
performance contractor for consolidated reporting purposes.
    The proposed quarterly report format for on-time performance of 
Presort First-Class Mail is as follows:

   Table 4-A1.--Quarterly Service Performance for Presort First-Class Mail; Sample Quarterly Report Format for
                                            Presort First-Class Mail
----------------------------------------------------------------------------------------------------------------
                                                                                                 Three-day/ four-
                           District                             Overnight  on-    Two-day  on-     day  on-time
                                                               time  (percent)  time  (percent)     (percent)
----------------------------------------------------------------------------------------------------------------
CAPITAL METRO AREA...........................................              XX               XX               XX
Baltimore District...........................................              XX               XX               XX
Capital District.............................................              XX               XX               XX
South Carolina District......................................              XX               XX               XX
Greensboro District..........................................              XX               XX               XX
Mid-Carolinas District.......................................              XX               XX               XX
No. Virginia District........................................              XX               XX               XX
Richmond District............................................              XX               XX              XX
----------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 1 in the Proposal has been changed to Table 4-A.

    The mail variance for Presort First-Class Mail pieces will be 
reported separately with the percentage of mail that is delivered 
within one-day, two-days, and three-days of the applicable standard. 
The proposed quarterly report format with mail variance for Presort 
First-Class Mail is as follows:

 Table 4-B\1\.--Quarterly Service Performance for Presort First-Class Mail--Mail Variance; Sample Quarterly Report Format With Mail Variance for Presort
                                                                    First-Class Mail
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Overnight                               Two-day                           Three-day/four-day
                                    --------------------------------------------------------------------------------------------------------------------
              District               Within  +1-  Within  +2-  Within  +3-  Within  +1-  Within  +2-  Within  +3-  Within  +1-  Within  +1-  Within  +2-
                                         day          day          day          day          day          day          day          day          day
                                      (percent)    (percent)    (percent)    (percent)    (percent)    (percent)    (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CAPITAL METRO AREA.................          XX           XX           XX           XX           XX           XX           XX           XX           XX
Baltimore District.................          XX           XX           XX           XX           XX           XX           XX           XX           XX
Capital District...................          XX           XX           XX           XX           XX           XX           XX           XX           XX
South Carolina District............          XX           XX           XX           XX           XX           XX           XX           XX           XX
Greensboro District................          XX           XX           XX           XX           XX           XX           XX           XX           XX

[[Page 72404]]

 
Mid-Carolinas District.............          XX           XX           XX           XX           XX           XX           XX           XX           XX
No. Virginia District..............          XX           XX           XX           XX           XX           XX           XX           XX           XX
Richmond District..................          XX           XX           XX           XX           XX           XX           XX           XX           XX
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 2 in the Proposal has been changed to Table 4-B.

3.7.2 Annual Reporting
    Separate national measures will be compiled for each First-Class 
Mail grouping (single-piece and Presort) and by service standard (one-
day, two-day, and three-day/four-day) for letter, flat, and parcel-
shaped First-Class Mail.
    Annual performance consists of a weighted average for each First-
Class Mail segment that allots weight based on the volume of mail in 
each district. If the segments are not representatively distributed, 
the weighting will ensure that each district counts for its fair share 
in the national aggregate.
    The proposed report format for First-Class Mail Annual Compliance 
Report is as follows:

  Table 4-C \1\.--Annual Compliance Report Format for First-Class Mail
            Sample Annual Report Format for First-Class Mail
------------------------------------------------------------------------
                                                             On-time
              Mail class                Goal  (percent)     (percent)
------------------------------------------------------------------------
First-Class Mail:
    Single-Piece Overnight............              XX               XX
    Single-Piece Two-Day..............              XX               XX
    Single-Piece Three-Day/Four-Day...              XX               XX
    Presort Overnight.................              XX               XX
    Presort Two-Day...................              XX               XX
    Presort Three-Day/Four-Day........              XX              XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 3 in the
  Proposal has been changed to Table 4-C.

4. Single-Piece First-Class Mail International

4.1 Background

    Outbound single-piece First-Class Mail International pieces are 
accepted by the United States Postal Service for processing and 
transfer to foreign postal administrations for delivery in other 
countries. The service standard for the outbound domestic transit of 
this mail is the same as for First-Class Mail pieces from the domestic 
3-digit ZIP Code of origin to the domestic 3-digit ZIP Code area in 
which the Postal Service International Service Center (ISC) designated 
for that origin is located. \18 \
---------------------------------------------------------------------------

    \18\ The postal mail processing network includes a handful of 
ISCs each of which serves a region of the postal network and is 
responsible for conducting the initial international processing for 
outbound international mail or the final international processing 
for inbound international mail. For outbound mail, the ISC for a 
postal network region may be the gateway facility from which mail is 
transported from the postal network to the custody of a foreign 
postal administration. In a small percentage of cases, outbound mail 
may be transported from its designated ISC to another ISC for the 
outbound gateway processing that precedes its exit from the postal 
network.
---------------------------------------------------------------------------

    Inbound single-piece First-Class Mail International originates from 
other countries and is destined for delivery to addresses in 3-digit 
ZIP Code areas of the United States. The service standard for the 
inbound domestic transit of this mail is the same as for First-Class 
Mail that originates from the 3-digit ZIP Code in which the ISC is 
located to the 3-digit ZIP Code area of the delivery address.
    Service performance for the domestic transit of both inbound and 
outbound single-piece First-Class Mail International is currently 
measured through the International Mail Measurement System (IMMS), 
which is operated by an external service performance measurement 
contractor. The Postal Service plans to continue to use IMMS for this 
purpose.
    IMMS utilizes only letter-shaped mail pieces, which is the 
predominant shape of both outbound and inbound single-piece First-Class 
Mail International. The processing of single-piece First-Class Mail 
International--during either outbound transit from domestic origin to 
the designated ISC or inbound transit from the designated ISC to the 
domestic delivery address--is the same as for domestic single-piece 
First-Class Mail flats and parcels, which are discussed above in 
Sections 3.2 and 3.5, respectively. The domestic transit service 
standards are the same. Accordingly, the Postal Service proposes that 
the data (EXFC for flats, Delivery Confirmation for parcels) utilized 
to report for domestic single-piece First-Class Mail flats and parcels 
be used to serve as a proxy for estimating the service performance for 
outbound and inbound single-piece First-Class Mail International flats 
and parcels.
4.1.1 Statistical Validity
    The purpose of IMMS is to provide independently gathered, accurate, 
and reliable information on the transport time for the domestic leg of 
transit for letters. IMMS is designed as an area-level measurement, as 
International Mail volume varies substantially by postal administrative 
district. The volume of outbound IMMS test mail is based on estimated 
international origin-destination pair volumes. The import distributions 
are based on the mail profiles obtained from the System of 
International Revenue and Volume-Inbound. A minimum volume of 1,025 
pieces within each postal administrative area, per quarter, is used to 
deliver measurement results that have a precision of +/-3% at a 95% 
confidence level.

[[Page 72405]]

4.1.2 ``Start-the-Clock''
    To test outbound single-piece First-Class Mail International 
letters, sample international pieces are combined with the bundles 
created for the domestic EXFC testing program, which is described above 
in Section 3.2. The date/time that the test bundle is dropped into the 
collection box or business mail chute is the ``start-the-clock'' and is 
reported directly to the independent contractor.
    To test inbound single-piece First-Class Mail International letter 
service performance, sample letters addressed to reporters in the 
United States employed by the contractor are mailed from foreign 
countries by droppers employed by the contractor. The IMMS service 
performance measurement contractor has worldwide operations. To 
maintain the confidentiality of the program, the identities and 
addresses of the reporters and droppers (as well as the participating 
foreign countries of the droppers) are known only to the contractor. 
The inbound ``start-the-clock'' tracking begins with the first scan of 
the PLANET Code series on a piece at the ISC designated for the region 
of the USPS network that includes the delivery address.
4.1.3 ``Stop-the-Clock''
    As an outbound international mail letter travels through the 
domestic processing system, the PLANET Code \19\ information is 
captured and used to measure its progress. When the letter is sorted at 
the designated ISC, it receives a PLANET Code scan. The ``stop-the-
clock'' date for an outbound mail piece is the date of the last scan at 
this facility, unless the scan is after 8 p.m. For example, if the last 
PLANET Code scan for a piece occurs at 11:30 p.m. on Thursday, July 26, 
2007, then the ``stop-the-clock'' date is Friday, July 27, 2007. The 
number of transit days for outbound mail is the difference between the 
induction date and the last PLANET Code read at the designated ISC. 
Because the ``stop-the-clock'' event takes place at an ISC, as opposed 
to a delivery point, the transit days calculation includes Sundays and 
holidays.
---------------------------------------------------------------------------

    \19\ The PLANET Code is a barcode printed on mail pieces by 
mailers participating in the CONFIRM program. CONFIRM enables 
mailers to receive detailed scan information about the pieces they 
mail in order to track mail through the postal network.
---------------------------------------------------------------------------

    An inbound international mail letter flows through the USPS network 
from the ISC to the delivery addresses. The ``stop-the-clock'' data for 
inbound mail is the date the mailpiece is delivered to a reporter 
employed by the service measurement contractor. The reporter is part of 
the EXFC survey group and is responsible for receiving the mail and 
reporting the date of delivery. The number of transit days for inbound 
test mail is the difference between the delivery date and the date of 
the first PLANET Code read or ID tag at the designated ISC. Sundays and 
holidays are not included in the transit days calculation for import 
mailpieces.
    Because the service standards for both outbound and inbound single-
piece First-Class Mail International flats and parcels are based on the 
domestic transit of such mail, on-time performance is measured against 
the same set of origin-destination 3-digit ZIP Code area service 
standards as domestic First-Class Mail. To determine if a mailpiece is 
on time, the number of transit days is compared to the service standard 
for the applicable origin-destination 3-digit ZIP Code pair.

4.2 Reporting Single-Piece First-Class Mail International Letters

4.2.1 Quarterly Reporting
    Since not all postal administrative districts have sufficient 
volumes for reporting, the Postal Service proposes reporting quarterly 
service performance at a postal administrative area level. Each 
measurement will include the percent delivered on time for outbound and 
for inbound single-piece First-Class Mail International letters. All 
scores are weighted at the area level using proportions derived from a 
rolling average of estimated volumes for 12 fiscal quarters.
    The proposed quarterly report format for single-piece First-Class 
Mail International letters is as follows:

  Table 4-D\1\.--Quarterly Service Performance for Single-Piece First-
  Class Mail International; Sample Quarterly Report Format for Single-
              Piece First-Class Mail International Letters
------------------------------------------------------------------------
                                                    Outbound/Inbound on-
                       Area                            time (percent)
------------------------------------------------------------------------
Northeast Area....................................                    xx
New York Metro Area...............................                    xx
Eastern Area......................................                    xx
Capital Metro Area................................                    xx
Southeast Area....................................                    xx
Great Lakes Area..................................                    xx
Western Area......................................                    xx
Southwest Area....................................                    xx
Pacific Area......................................                    xx
NATIONAL..........................................                    xx
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 4 in the
  Proposal has been changed to Table 4-D.

    The mail variance for single-piece First-Class Mail International 
letters will be reported separately with the percentage of mail that is 
delivered within one-day, two-days, and three-days of the applicable 
standard. The proposed quarterly report format is as follows:

[[Page 72406]]



   Table 4-E \1\--Quarterly Service Performance for Single-Piece First-Class Mail International Mail Variance;
  Sample Quarterly Report Format with the Mail Variance for Single-Piece First-Class Mail International Letters
----------------------------------------------------------------------------------------------------------------
                                                                Within + 1-day    Within +  2-     Within +  3-
                             Area                                 (percent)     days  (percent)  days  (percent)
----------------------------------------------------------------------------------------------------------------
Northeast Area...............................................              XX               XX               XX
New York Metro Area..........................................              XX               XX               XX
Eastern Area.................................................              XX               XX               XX
Capital Metro Area...........................................              XX               XX               XX
Southeast Area...............................................              XX               XX               XX
Great Lakes Area.............................................              XX               XX               XX
Western Area.................................................              XX               XX               XX
Southwest Area...............................................              XX               XX               XX
Pacific Area.................................................              XX               XX               XX
NATIONAL.....................................................              XX               XX              XX
----------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 5 in the Proposal has been changed to Table 4-E.

4.2.2 Annual Reporting
    The Postal Service proposes reporting national measures for the 
percentage of single-piece First-Class Mail International letters 
delivered on time. Annual performance consists of a weighted average 
that allots weight based on the volume of mail in every area. If the 
data are not representatively distributed, the weighting will ensure 
that each area counts for the correct portion of the national 
aggregate.
    The proposed report format for the single-piece First-Class Mail 
International Annual Compliance Report is as follows:

  Table 4-F. \1\--Annual Compliance Report; Sample Annual Report Format
         for Single-Piece First-Class Mail International Letters
------------------------------------------------------------------------
                                                             On-time
              Mail class                 Goal (percent)     (percent)
------------------------------------------------------------------------
Single-Piece International First-Class              XX              XX
 Mail.................................
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 6 in the
  Proposal has been changed to Table 4-F.

5. Standard Mail

5.1 Background

    Standard Mail pieces represented 48.25% of the overall mail volume 
in FY 2006.\20\ At over 100 billion mail pieces per year, it is the 
largest class of mail. Of Standard Mail, 60.48% are letters, 38.95% are 
flats, and 0.56% are parcels. Table 5--Standard Mail Volume below 
illustrates the make-up of Standard Mail. The table also illustrates 
the percentage that Standard Mail letters, flats, and parcels represent 
in relation to the overall mailstream. Because the categories of 
Standard Mail have different requirements for mailers and thus are 
measured differently, this section has been separated into the 
following sub-sections: non-carrier route letters, non-carrier route 
flats, saturation letters and carrier route flats, and saturation 
flats.
---------------------------------------------------------------------------

    \20\ http://www.usps.com/financials/_pdf/Fy2006_RPWsummaryreport.pdf.

                                         Table 5.--Standard Mail Volume
----------------------------------------------------------------------------------------------------------------
                                                                                    Presort
                                                             ---------------------------------------------------
                                                                                                        Total
                                                                Letters      Flats\1\     Parcels     (percent)
----------------------------------------------------------------------------------------------------------------
Standard Mail...............................................        60.48        38.95         0.56          100
Overall Mailstream..........................................        29.18        18.79         0.27       48.25
----------------------------------------------------------------------------------------------------------------
\1\ Service performance measurement results for Standard Mail flats will include Package Services flats.

5.2 Standard Mail Non-Carrier Route Letters

    The primary induction method for non-saturation Standard Mail 
letters is bulk entry. Standard Mail letters represent 24.68% of the 
total mailstream. The Postal Service will base service performance 
measurement on mail induction, and in-home IMB scan data provided by 
external reporters.
5.2.1 Adoption Rates
    Participation in the Intelligent Mail pilot, the benefits of the 
IMB for special services, and the upcoming requirement to use the IMB 
for automation discounts are expected to generate over 13 billion 
Standard Mail non-carrier route letters with IMBs and electronic mail 
information by January 2009. This volume will satisfy the conditions 
for performance measurement in FY 2009. The estimates for mailer 
adoption of the IMB and electronic mailing information are:

[[Page 72407]]

    January 2009: 25% of Standard Mail non-carrier route letters; and
    January 2010: 50% of Standard Mail non-carrier route letters.
5.2.2 ``Start-the-Clock''
    Mailers are required to prepare mail with IMBs and submit 
electronic mailing information listing the IMBs used. Mail is verified 
to ensure it meets preparation requirements. Mail that does not meet 
mail preparation requirements will be excluded from service performance 
in order to ensure that the system produces a valid, reliable 
measurement score. Drop shipment mailers create appointments for 
Standard Mail non-carrier route letters in the Facility Access and 
Shipment Tracking (FAST) system at designated facilities, which provide 
electronic advance notification of the mail profile including arrival 
times. At sites that are equipped with scanners, containers with 
Intelligent Mail Container barcodes will be scanned to record arrival 
times. At other sites, the ``start-the-clock'' will be the documented 
arrival time at the Postal Service unit. Mail arrival times and mail 
preparation quality information will be made available to mailers.
5.2.3 ``Stop-the-Clock''
    External reporters will be equipped with handheld scanners capable 
of scanning the IMB and will scan all mail they receive containing an 
IMB. These data will be sent to the external reporting system and will 
be the ``stop-the-clock'' for the individually scanned mail pieces. By 
comparing the date of the final Postal Service scan with the actual 
receipt date for these pieces, the external service performance 
measurement contractor will calculate a factor for the actual service 
performance of the last mile for Standard Mail letters. This factor 
will be combined with the Intelligent Mail data to form the end-to-end 
service performance.
    The use of external reporters will allow for mail that is not 
exposed to or that falls out of automation to be included in service 
performance measurement. The external reporters will provide the actual 
``stop-the-clock'' on such pieces, and the external measurement 
contractor will calculate the service performance for those pieces that 
go to the external reporters.

5.3 Standard Mail Non-Carrier Route Flats

    The primary induction method for Presort non-carrier route flats is 
bulk entry. Presort flats represent 6.51% of the total mailstream and, 
when combined with Standard Mail carrier route flats, are the third 
largest mail segment behind Presort First-Class Mail letters and 
Standard Mail letters. Since Package Services flats are operationally 
handled in the same manner as Standard Mail non-carrier route flats, 
the Postal Service plans to include the measurement of Package Services 
flats in the Standard Mail performance results.
5.3.1 Adoption Rates
    Participation in the Intelligent Mail pilot, the benefits of the 
IMB for special services, and the upcoming requirement to use the IMB 
for automation discounts are expected to generate over 3.4 billion 
Standard Mail non-carrier route flats with IMBs and electronic mail 
information by January 2009. This volume will satisfy the conditions 
for performance measurement in FY 2009. The estimates for mailer 
adoption of the IMB and electronic mailing information are:
    January 2009: 25% of Standard Mail non-carrier route flats; and
    January 2010: 50% of Standard Mail non-carrier route flats.
5.3.2 ``Start-the-Clock''
    Mailers are required to prepare mail with IMBs and submit 
electronic mailing information listing the IMBs used. Mail is verified 
to ensure it meets mail preparation criteria. Mail that does not meet 
mail preparation standards will be excluded from service performance in 
order to ensure that the system produces a valid, reliable measurement 
score. Drop shipment mailers create appointments for Standard Mail 
flats in FAST at designated facilities providing advance notification 
of the mail profile including arrival times. At sites that are equipped 
with scanners, containers with Intelligent Container barcodes will be 
scanned to record arrival times. At other sites, the ``start-the-
clock'' will be the documented arrival time at the Postal Service unit. 
Mail arrival times and mail preparation quality information will be 
made available to mailers.
5.3.3 ``Stop-the-Clock''
    External reporters will be equipped with handheld IMB scanners and 
will scan all mail they receive that bears an IMB. The scan data will 
be sent to the external reporting system and will be the ``stop-the-
clock'' for the individually scanned mail pieces. By comparing the date 
of the final postal mail processing scan with the actual receipt date 
for these pieces, the external service measurement contractor can 
calculate a factor for the actual service performance of the last mile 
for Standard Mail flats. This factor will be combined with the 
Intelligent Mail data to form end-to-end service performance estimates.

5.4 Standard Mail Carrier Route Flats and Saturation Letters

    For carrier route flats and saturation letters, the primary 
induction method is Sectional Center Facility or Delivery Unit dropped 
bundles and saturation trays. Carrier route flats represented 12.29% of 
the total mailstream in FY 2006. Due to the distinct characteristics of 
carrier route flats and saturation letters, the Postal Service is 
proposing a measurement approach specific to these mail types.
5.4.1 Adoption Rules
    In order to be included in service performance measurement, Presort 
saturation letter mailers must provide electronic mailing information 
and use the Intelligent Mail series of barcodes. Currently, mailers are 
not required to print a barcode on carrier route flats.
    Starting in January 2009, mailer use of IMBs will be required for 
automation discounts and mailer adoption is expected to rise 
substantially during the weeks immediately prior to the effective date. 
Furthermore, as described in the previous section, non-saturation 
carrier route flats will migrate to automated processing, and mailers 
will be required to pre-apply IMBs to facilitate automated sequencing. 
Over 6.5 billion Standard Mail carrier route flats are expected to have 
IMBs by January 2009. This growth in IMB and electronic mailing 
information adoption will provide sufficient volume and representation 
of the mail category to enable external measurement. The estimates for 
mailer adoption of the IMB and electronic mailing information are 
January 25% of Standard Mail carrier route flats and saturation 
letters; and January 50% of Standard Mail carrier route flats and 
saturation letters.
5.4.2 ``Start-the-Clock''
    Mailers are required to prepare mail with IMBs and submit 
electronic mailing information listing the IMBs used. Mail is verified 
to ensure it meets mail preparation criteria. Mail that does not meet 
mail preparation standards will be excluded from service performance in 
order to ensure that the system produces a valid, reliable measurement 
score. Drop shipment mailers create appointments for Standard Mail in 
FAST at designated facilities providing advance notification of the 
mail profile including arrival times. At sites that are equipped with 
scanners, containers with Intelligent Container barcodes will be 
scanned to

[[Page 72408]]

record arrival times. At other sites, the ``start-the-clock'' will be 
the documented arrival time at the Postal Service unit. Mail arrival 
times and mail preparation quality information will be made available 
to mailers.
5.4.3 ``Stop-the-Clock''
    As with non-carrier route Standard Mail flats, carrier route flats 
with IMBs will be scanned by external reporters to ``stop-the-clock.'' 
However, unique barcodes are not required on carrier route or 
saturation flats. Though the Postal Service expects an increased 
adoption of IMBs on these pieces as automation of current carrier route 
flat mail base increases, there will likely be a portion without unique 
barcodes on each piece. The Postal Service is exploring methods for 
external reporters to capture the ``stop-the-clock,'' such as 
encouraging mailer adoption of the IMBs for this mail category or 
through the application of alternate barcodes that will allow postal 
delivery unit personnel to ``stop-the-clock'' via scanning. As a 
contingency, the external service measurement contractor will be 
required to train reporters to identify carrier route flats mail and 
have them report delivery of such pieces without an IMB scan. These 
data will be sent to the external reporting system and will be the 
``stop-the-clock'' for the individual mail pieces. The external service 
measurement contractor will calculate the service performance for the 
pieces that go to the external reporters.

5.5 Standard Mail Saturation Flats

    The primary induction method for saturation flats are Sectional 
Center Facility or Delivery Unit dropped bundles. Due to the distinct 
characteristics of saturation flats, the Postal Service is proposing a 
measurement approach specific to this mail.
5.5.1 Adoption Rates
    In order to be included in service performance measurement, 
Standard Mail saturation flats mailers must provide electronic mailing 
information.
5.5.2 ``Start-the-Clock''
    The ``start-the-clock'' for Standard Mail saturation flats will be 
the documented arrival time at the Postal Service unit.
5.5.3 ``Stop-the-Clock''
    Unique barcodes are not required on saturation bundled flats. The 
Postal Service is exploring methods for external reporters to capture 
the ``stop-the-clock,'' such as encouraging mailer adoption of the IMBs 
for this mail, or through the application of alternate barcodes that 
will allow postal delivery unit personnel to ``stop-the-clock'' via 
scanning. As a contingency, the external service measurement contractor 
will be required to train its reporters to identify saturation flats 
and to have those reporters record delivery of such pieces without an 
IMB scan. These data will be sent to the external reporting system and 
will be the ``stop-the-clock'' for the individual mail pieces. The 
external service measurement contractor will calculate the service 
performance for these pieces that go to the external reporters.

5.6 Standard Mail Parcels

    Many Presort Standard Mail parcel shippers chose to purchase 
special services such as Delivery Confirmation for their mail. For 
reporting purposes, performance results will be calculated by the 
Postal Service then sent to the external measurement contract for 
inclusion into the Standard Mail aggregated results. Standard Mail 
parcels represent 0.3% of the total mailstream, and 9% of Standard Mail 
parcels have Delivery Confirmation service. This sample size is more 
than adequate for service performance measurement of this mail 
category.
5.6.1 Adoption Rates
    Many Presort mailers already meet the electronic mailing 
information requirements necessary for performance measurement. The 
Postal Service plans to expand internal Delivery Confirmation sampling 
processes that verify shipment contents and the accuracy of the 
electronic mailing information. As verification becomes more prevalent, 
the volume of parcels that are measured will increase.
5.6.2 ``Start-the-Clock''
    The ``start-the-clock'' for Standard Mail parcels will be the 
documented arrival time at the Postal Service unit. For mail that is 
presented at the BMEU, the acceptance of the mailing will be used as 
the ``start the-clock'' as long as the mailing meets the preparation 
requirements.
5.6.3 ``Stop-the-Clock''
    Postal delivery personnel scan Delivery Confirmation barcodes upon 
delivery of parcels for which Delivery Confirmation service has been 
purchased. They can denote the delivery or attempted delivery, either 
of which will serve to ``stop-the-clock.''

5.7 Reporting for Standard Mail

5.7.1 Quarterly Reporting
    The Postal Service proposes quarterly reporting for Standard Mail 
that will measure service performance by administrative district 
separately for destination entry mail and end-to-end mail. Reporting 
destination entry mail and end-to-end mail separately by day 
significantly expands the number of performance measures reported and 
the number of external reporters required. The proposed measurements 
provide ample detail to assess the quality of service without becoming 
cost prohibitive for the Postal Service.
    The quarterly reports will provide service performance scores for 
letter, flat, and parcel-shaped Standard Mail. The Postal Service will 
send performance data for Standard Mail parcels to the external service 
performance contractor for consolidated reporting purposes.
    The proposed quarterly report format for Standard Mail is as 
follows:

 Table 5-A\1\.--Quarterly Service Performance for Standard Mail; Sample
                Quarterly Report Format for Standard Mail
------------------------------------------------------------------------
                                          Destination
               District                  entry on-time    End-to-end on-
                                           (percent)      time (percent)
------------------------------------------------------------------------
CAPITAL METRO AREA....................              XX               XX
Baltimore District....................              XX               XX
Capital District......................              XX               XX
South Carolina District...............              XX               XX
Greensboro District...................              XX               XX
Mid-Carolinas District................              XX               XX
No. Virginia District.................              XX               XX

[[Page 72409]]

 
Richmond District.....................              XX              XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 7 in the
  Proposal has been changed to Table 5-A.

    The mail variance for Standard Mail pieces will be reported 
separately with the percentage of mail that is delivered within one-
day, two-days, and three-days of the applicable standard. The proposed 
quarterly report format for Standard Mail variance is as follows:

      Table 5-B \1\.--Quarterly Service Performance for Standard Mail--Mail Variance; Sample Quarterly Report Format for Standard Mail Variance \2\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Destination entry                                      End-to-end
                                                   -----------------------------------------------------------------------------------------------------
                                                     Within +1-day    Within +2-day    Within +3-day    Within +1-day    Within +2-day    Within +3-day
                                                       (percent)        (percent)        (percent)        (percent)        (percent)        (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
CAPITAL METRO AREA................................              XX               XX               XX               XX               XX               XX
Baltimore District................................              XX               XX               XX               XX               XX               XX
Capital District..................................              XX               XX               XX               XX               XX               XX
South Carolina District...........................              XX               XX               XX               XX               XX               XX
Greensboro District...............................              XX               XX               XX               XX               XX               XX
Mid-Carolinas District............................              XX               XX               XX               XX               XX               XX
No. Virginia District.............................              XX               XX               XX               XX               XX               XX
Richmond District.................................              XX               XX               XX               XX               XX               XX
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 8 in the Proposal has been changed to Table 5-B.
\2\ Destination Entry includes DBMC, DSCF, DDU.

5.7.2 Annual Reporting
    The Postal Service proposes reporting a national aggregate measure 
for the percentage of Standard Mail delivered on time. This Annual 
Compliance Report includes letter, flat, and parcel-shaped Standard 
Mail and consists of a weighted average for each Standard Mail segment 
that allots weight based on the volume of mail in each district. If the 
segments are not representatively distributed, the weighting will 
ensure that each district counts for the appropriate portion of the 
national aggregate.
    The proposed report format for Standard Mail Annual Compliance 
Report is as follows:

  Table 5-C \1\.--Annual Compliance Report; Sample Annual Report Format
                            for Standard Mail
------------------------------------------------------------------------
                                                             On-time
              Mail class                      Goal          (percent)
------------------------------------------------------------------------
Standard mail.........................              XX               XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 9 in the
  Proposal has been changed to Table 5-C.

5.7.3 Statistical Validity
    The Postal Service anticipates that 25% of Standard Mail will have 
an IMB and be measurable by January 2009. Using this adoption rate, the 
average district will have approximately 4,750 pieces per quarter upon 
which to base the last mile factor estimates. At 50% IMB coverage, the 
volume increases to 9,500 pieces per quarter on average. Precision is 
affected by the last mile factor estimate and mailer adoption of the 
IMB and electronic mailing information. The Postal Service anticipates 
a precision between +/-0.5% and +/-0.9% as illustrated in the table 
below.

                                      Table 6.--Precision for Standard Mail
----------------------------------------------------------------------------------------------------------------
                                                                                    Coverage of
                                                                     Last mile         IMB +
                                                    Confidence        factor        electronic       Precision
                                                     interval        estimate         mailing        (percent)
                                                     (percent)       (percent)      information
                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
Standard Mail...................................              95               3              25         +/-0.75
                                                  ..............               3              50          +/-0.5
                                                  ..............               5              25          +/-0.9
                                                  ..............               5              50          +/-0.7
----------------------------------------------------------------------------------------------------------------


[[Page 72410]]

    The assumption of last mile factor estimates in the 3-5% range for 
Standard Mail service is based on the mix of letter and flat volumes, 
and is an estimate at this point, which can be refined when data is 
available.
    It should also be noted that the last mile factor is one piece of 
the overall service performance estimate, with the performance of the 
acceptance to final processing scan being the other. The availability 
of billions of data records to sample from to form these estimates 
means that we can economically take large samples for individual report 
cells (e.g. Baltimore SCF-entry Standard Mail, Chicago 3-day First-
Class Presorted Mail). The estimated precision levels will be shared 
with the PRC during the development process.
    In 2009, the performance of an estimated 2.7 million Standard Mail 
parcels will be sampled for end-to-end service measurement, 
representing 9% of these parcels. While this represents low usage of 
Delivery Confirmation service, it is still representative of the 
population and, hence, provides an acceptable basis for service 
performance measurement.

6. Periodicals

6.1 Background

    Periodicals represented just over 4% of the overall mail volume in 
FY 2006,\21\ with 9 billion mail pieces. Periodicals consist of letters 
and flats, most of which are destination dropped. The Postal Service 
will use the same measurement approach for both letters and flats. 
Since IMB and electronic mailing information adoption for Periodicals 
is projected to be slower than for Standard Mail and First-Class Mail, 
the Postal Service will use as an interim approach for performance 
measurement while IMB and electronic mailing information adoption rates 
grow. The interim approach relies on external reports generated by Red 
Tag and DelTrak, which conduct performance research independently.
---------------------------------------------------------------------------

    \21\ http://www.usps.com/financials/_pdf/Fy2006_RPWsummaryreport.pdf.
---------------------------------------------------------------------------

6.2 Periodicals Letters and Flats

    All Periodicals are bulk entry, and the vast majority of the volume 
is flats. Table 7--Periodicals Mail Volume illustrates the make-up of 
Periodicals Mail. It also illustrates the percentage that each 
Periodicals shape represents within the overall mailstream.

                                        Table 7.--Periodicals Mail Volume
----------------------------------------------------------------------------------------------------------------
                                                                      Letters          Flats           Total
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Periodicals.....................................................            1.56            98.4          100.0
Overall Mailstream..............................................            0.07             4.2            4.25
----------------------------------------------------------------------------------------------------------------

6.2.1 Adoption Rates
    Initial adoption of IMBs is projected to be slower for Periodicals 
than for First-Class Mail and Standard Mail. However, revisions to the 
technical specifications for the IMB and recent successful tests 
indicate the IMB is viable for Periodicals. With required use by 
January 2009, the conservative estimates for IMB and electronic mailing 
information adoption for Periodicals are:
    FY 2009: 10.25% of letters and flats; and
    FY 2010: 25+% of letters and flats.
    These estimates equate to just over 2.2 billion Periodicals with 
IMBs and electronic mailing information that satisfy the conditions for 
performance measurement in FY 2009.
6.2.2 Statistical Validity
    Different numbers of districts in each area, as well as varying 
mail volumes and mixes make it challenging to estimate the precision 
level for Periodicals at this time without the methodology for 
calculations being fully developed. The Postal Service will continue to 
work on trying to estimate what precision will likely be achieved, but 
do not currently have the data or assumptions necessary to make an 
educated estimate.
6.2.3 Interim Approach
    In FY 2008, the Postal Service is evaluating two existing mailer-
operated measurement systems, Red Tag and DelTrak, to measure 
Periodicals service performance. The ``start-the-clock'' for both 
systems is the mailer-reported induction time. For DelTrak, the 
transportation company hired by the mailer is required to enter the 
date/time when mail is dropped at a postal facility. The Postal Service 
has discussed adding the FAST appointment number to both DelTrak and 
Red Tag, so the reported ``start-the-clock'' could be audited in the 
same manner as is being planned for the long-term IMB-based approach. 
For Red Tag and DelTrak, the ``stop-the-clock'' is the delivery date 
reported online by the external reporters. These external reporters are 
mainly concentrated in postal administrative districts with high 
population density. Due to the limited number of reporters 
participating in these programs, data will only be statistically valid 
for the desired precision at a national aggregate level. In 2008, the 
Postal Service is conducting evaluations of these systems to ensure 
valid data can be available in FY 2008 and used for reporting in FY 
2009.
6.2.4 ``Start-the-Clock''
    Mailers are required to prepare mail with IMBs and submit 
electronic mailing information listing the IMBs used. Mail is verified 
to ensure it meets mail preparation criteria. Mail that does not meet 
mail preparation standards will be excluded from service performance in 
order to ensure that the system produces a valid, reliable measurement 
score. Drop shipment mailers provide advance notification in FAST at 
designated facilities, providing mail profile, to include arrival 
times. At sites that are equipped with scanners, containers with 
Intelligent Container barcodes will be scanned to record arrival times. 
At other sites, the ``start-the-clock'' will be the documented arrival 
time at the Postal Service unit. Mail arrival times and mail 
preparation quality information will be made available to mailers.
6.2.5 ``Stop-the-Clock''
    External reporters will be equipped with handheld IMB scanners and 
will scan any IMBs on mail that they receive. These scan data will be 
sent to the external reporting system and will be the ``stop-the-
clock'' for the individually scanned mail pieces. By comparing the date 
of the final postal mail processing scan with the actual receipt date 
for these pieces, the external service

[[Page 72411]]

measurement contractor can calculate a factor for the actual service 
performance of the last mile for Periodicals. This factor can be 
combined with the Intelligent Mail data to form the end-to-end service 
performance measure.

6.3 Reporting for Periodicals

6.3.1 Quarterly Reporting
    In 2008, the Postal Service is reviewing Red Tag and DelTrak data 
for reporting at the national level on a quarterly basis for the 
reasons stated above. The Postal Service is currently in discussions 
with both the operators of DelTrak and Red Tag to develop and setup the 
system for combined measurement no later than FY 2009; however, the 
initial proposed format includes national aggregate scores for percent 
delivered on time, and within 1-day, 2-days, and 3-days of the 
applicable standard.
    Due to the slower projected adoption rates for Periodicals, the 
Postal Service proposes reporting service performance at a postal 
administrative area level in the interim until the volume of 
Periodicals with IMBs and electronic mailing information is reliable 
enough to provide statistically significant results at a lower level of 
aggregation.\22\ As IMB and electronic mailing information adoption 
grows and additional performance data become available, the granularity 
will increase and allow for reporting at the district level.
---------------------------------------------------------------------------

    \22\ A postal area is the administrative level directly below 
national headquarters and is comprised of multiple subordinate 
postal districts. There are currently nine areas that span the 
entirety of the postal network; each of the 80 districts is part of 
one area.
---------------------------------------------------------------------------

    The proposed quarterly report format for Periodicals is as follows:

  Table 7-A\1\.--Quarterly Service Performance for Periodicals; Sample
                 Quarterly Report Format for Periodicals
------------------------------------------------------------------------
                                                             On-time
                          Area                              (percent)
------------------------------------------------------------------------
Northeast Area.........................................              XX
New York Metro Area....................................              XX
Eastern Area...........................................              XX
Capital Metro Area.....................................              XX
Southeast Area.........................................              XX
Great Lakes Area.......................................              XX
Western Area...........................................              XX
Southwest Area.........................................              XX
Pacific Area...........................................              XX
NATIONAL...............................................             XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 10 in the
  Proposal has been changed to Table 7-A.

    The mail variance for Periodicals will be reported separately, 
reflecting the percentage of mail that is delivered within one-day, 
two-days, and three-days of the applicable standard. The proposed 
quarterly report format with the mail variance for Periodicals is as 
follows:

 Table 7-B.\1\--Quarterly Service Performance for Periodicals Mail Variance; Sample Quarterly Report Format With
                                          Mail Variance for Periodicals
----------------------------------------------------------------------------------------------------------------
                                                                Within + 1-day  Within + 2-days  Within + 3-days
                             Area                                 (percent)         (percent)        (percent)
----------------------------------------------------------------------------------------------------------------
Northeast Area...............................................              XX               XX               XX
New York Metro Area..........................................              XX               XX               XX
Eastern Area.................................................              XX               XX               XX
Capital Metro Area...........................................              XX               XX               XX
Southeast Area...............................................              XX               XX               XX
Great Lakes Area.............................................              XX               XX               XX
Western Area.................................................              XX               XX               XX
Southwest Area...............................................              XX               XX               XX
Pacific Area.................................................              XX               XX               XX
NATIONAL.....................................................              XX               XX               XX
----------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 11 in the Proposal has been changed to Table 7-B.

6.3.2 Annual Reporting
    The Postal Service proposes reporting national measures for the 
percentage of Periodicals mail delivered on time.
    Annual performance consists of a weighted average for each 
Periodicals segment that allots weight based on the volume of mail in 
every district. If the data are not representatively distributed, the 
weighting will ensure that each district counts for the correct portion 
of the national aggregate.
    The proposed report format for Periodicals Mail Annual Compliance 
Report is as follows:

Table 7-C.\1\--Annual Compliance Report; Sample Annual Report Format for
                               Periodicals
------------------------------------------------------------------------
                                                             On-time
              Mail class                      Goal          (percent)
------------------------------------------------------------------------
Periodicals...........................              XX               XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 12 in the
  Proposal has been changed to Table 7-C.

7. Intelligent Mail Adoption

    As reflected in the three sections above pertaining to First-Class 
Mail, Standard Mail and Periodical pieces, the Postal Service intends 
to rely on Intelligent Mail Barcodes as a central component of service 
performance measurement. That is not the case for Package Services. 
Accordingly, before discussing Package Services below in Section 8, it 
is worthwhile to emphasize several important considerations

[[Page 72412]]

relevant to IMBs and electronic mailing information.
    During initial discussions with the PRC, concerns were raised 
regarding IMB adoption. Mailer participation and adoption of the 
Intelligent Mail series of barcodes and associated electronic mailing 
information is critical to the success of service performance 
measurement. The Postal Service is evaluating strategies to encourage 
mailer adoption and has been collaborating with the industry to 
mitigate potential adoption obstacles.

7.1 Intelligent Mail Pilot

    The Postal Service launched the Intelligent Mail system pilot with 
Presort First-Class Mail letters in September 2006. Following the 
success of the initial pilot, the program expanded to include Standard 
Mail letters and flats in July 2007. By the end of FY 2007, over 350 
mailings and 18 million mail pieces from five large mailers and presort 
companies have been tracked and service measurement calculated. The 
Postal Service is using this pilot to demonstrate the mailers' ability 
to meet the mail make-up requirements for service measurement and the 
Postal Service's ability to calculate measurement and Seamless 
Acceptance. When the service performance measurement system is 
implemented for letter and flat shaped mail, an external contractor 
will perform the calculations.
    The pilot is in the process of expanding by increasing the volume 
of tracked mail pieces and adding more mail acceptance sites. As of 
October 2007, the average Intelligent Mail volume is forecasted to 
increase to 1.4 million pieces per day and 7 million per week. In 
January 2008, the addition of new mailers to the pilot will increase 
Intelligent Mail volume to an average of 7 million pieces per day and 
35 million pieces per week. These volumes and mailer capabilities 
demonstrate the feasibility of the system.

7.2 Growth of Intelligent Mail Barcode (IMB) Adoption

    A major component of the new system is the IMB. The IMB has only 
been available to mailers for a little over a year. The chart below 
illustrates the capability of the industry to provide the volumes 
needed for measurement. The volumes show continued growth between June 
and September 2007. During the first year of use, postal mail 
processing equipment scanned over one billion IMBs. By September 2007, 
135 medium-to-large-volume postal customers and data consolidators were 
using IMBs, and approximately 2% of scans on postal automation 
equipment were IMBs.
    The following figure shows actual IMB scans for previous three 
months and an estimated trend line depicting the growth.
    [Figure 13, captioned ``Growth of IMBs,'' is not reproduced here. 
It can be viewed by accessing the pdf version of the Service 
Performance Measurement filing (December 5, 2007) posted on the 
Commission's web site.]
    With the January 2009 requirement to utilize IMBs, there is a 
potential for IMB volumes to exceed 2 billion per week and 100 billion 
per year at that point.
    The table below contains estimated mailer adoption rates of both 
the IMB and the electronic mailing information for performance 
measurement.

                Table 8.--Estimated Mailer Adoption Rates
------------------------------------------------------------------------
                                          2009 (percent)  2010 (percent)
------------------------------------------------------------------------
First-Class Mail:
    Presort Letters.....................           25-50           50-75
Standard Mail:
    Letters.............................           25-50           50-75
    Flats...............................           25-50           50-75
Periodicals:
    All.................................           10-25           25-75
------------------------------------------------------------------------

8. Package Services

8.1 Background

    Package Services market-dominant products include single-piece 
Parcel Post, Bound Printed Matter, Library Mail, and Media Mail. 
Presort Package Services flat-shaped mail is mainly composed of 
oversized catalogs, which are operationally handled the same as 
Standard Mail flats. Accordingly, the Postal Service will measure and 
report on Presort Package Services flats using the same approach as 
Standard Mail.
    Package Services parcel-shaped mail represented less than 0.3 of 
the overall mail volume in FY 2006.\23\ Among Package Services parcels, 
16 are Retail and 84 are Presort.
---------------------------------------------------------------------------

    \23\ http://www.usps.com/financials/_pdf/Fy2006_RPWsummaryreport.pdf.
---------------------------------------------------------------------------

    Measurement sample size for parcels is significantly higher than 
for letter and flat-shaped mail. This is due to the inclination of 
mailers to purchase Delivery Confirmation on parcels, especially 
Presort parcels. For Retail parcel-shaped Package Services mail, the 
Postal Service captures the ``start-the-clock'' at the retail counter 
as part of the Delivery Confirmation payment transaction. The ``stop-
the-clock'' is captured at delivery or attempted delivery. The result 
is an unparalleled scanning volume that creates a sample size more than 
sufficient for performance measurement. For Presort Package Services 
parcels, mailers are currently required to submit electronic mailing 
information, which will be used for verification of shipment contents 
and mail preparation quality. As the verification processes are rolled 
out nationally, the volume of Presort parcels that are measured will 
increase.
    Table 9--Package Services Parcel-Shaped Mail Volume illustrates the 
make-up of parcels by entry method. The table also illustrates the 
percentage that market-dominant Package Services parcel-shaped mail 
represents within the overall domestic mailstream.

[[Page 72413]]



                              Table 9.--Package Services Parcel-Shaped Mail Volume
----------------------------------------------------------------------------------------------------------------
                                                                      Retail          Presort          Total
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Package Services (Parcel-shaped)................................           16.0            84.0           100.0
Total Domestic Mailstream.......................................            0.04            0.23            0.27
----------------------------------------------------------------------------------------------------------------

8.2 Retail Package Services

    The Postal Service currently measures service performance for 
Package Services Retail mail via Delivery Confirmation scans. This 
approach for measuring performance is working well, so there are no 
plans to change the measurement method for this mail. Retail Package 
Services mail represents 16.0% of all Package Services parcels, but 
only 0.04% of the total mailstream. Delivery Confirmation is included 
on 15% of such parcels, which represents a significant portion of the 
mail.
8.2.1 Statistical Validity
    In 2006, over 14 million Package Services parcels included Delivery 
Confirmation service, representing 15% of these parcels. Since nearly 
all of these parcels are scanned at retail and delivery, this 
measurement is representative and, hence, provides an acceptable basis 
for service performance measurement.
    In 2009, the performance of an estimated 2.7 million parcels will 
be sampled for service measurement, representing 9% of these parcels. 
While this represents low usage of Delivery Confirmation service, it is 
still representative of the population and, hence, provides an 
acceptable basis for service performance measurement.
8.2.2 ``Start-the-Clock''
    The ``start-the-clock'' for Retail Package Services mail occurs at 
the retail counter when the customer purchases Delivery Confirmation. 
When retail clerks apply the Delivery Confirmation forms to parcels, 
they scan the Delivery Confirmation form barcodes. The scans are 
captured via either a POS terminal at the retail counter or an 
Intelligent Mail handheld scanning device. Because the customer is 
present at the ``start-the-clock'' event and receives a time-stamped 
receipt with purchase, there are several validation points.
8.2.3 ``Stop-the-Clock''
    Postal delivery personnel scan the Delivery Confirmation barcodes 
upon delivery or attempted delivery, either of which will serve to 
``stop-the-clock.''

8.3 Presort Package Services

    Presort Package Services mail represent 84.0% of all parcel-shaped 
Package Services mail volume and 0.23% of the total mailstream. 
Delivery Confirmation service is included on 21% of Presort Package 
Services mail pieces.
8.3.1 Adoption Rates
    Many mailers already meet the electronic mailing information 
requirements necessary for performance measurement. The Postal Service 
plans to expand internal Delivery Confirmation sampling processes that 
verify shipment contents and the accuracy of the electronic mailing 
information. As verification becomes more prevalent, the volume of 
parcels that are measured will increase.
8.3.2 Statistical Validity
    With the selected approach, the performance of an estimated 5 
million parcels will be sampled for service measurement in FY 2009. 
Since the 21% of the mail category contains Delivery Confirmation 
service, concerns about the representativeness of the sample used to 
measure service performance are minimal.
8.3.3 ``Start-the-Clock''
    The ``start-the-clock'' for Presort Package Services is the 
documented arrival time at the Postal Service unit. Since it is not 
practical to scan every parcel in the Presort shipment, the Postal 
Service will instead scan a subset of the parcels to validate shipment 
content. For mail that is presented at the BMEU, the acceptance of the 
mailing will be used as the ``start-the-clock'' as long as the mailing 
meets the preparation requirements. As with mailings that enter at the 
dock, the Postal Service will scan containers that have an Intelligent 
Mail Container barcode to validate mailer shipment content and the 
acceptance time.
8.3.4 ``Stop-the-Clock''
    Postal delivery personnel scan Delivery Confirmation barcodes upon 
delivery or attempted delivery, either of which will serve to ``stop-
the-clock'' for service performance measurement.

8.4 Reporting for Package Services

8.4.1 Quarterly Reporting
    The Postal Service proposes reporting quarterly on the percentage 
of mail that is delivered on time. The proposed quarterly report format 
for Package Services parcels is as follows:

   Table 9-A\1\.--Quarterly Service Performance for Package Services;
       Sample Quarterly Report Format for Package Services Parcels
------------------------------------------------------------------------
                                                             On-time
                        District                            (percent)
------------------------------------------------------------------------
CAPITAL METRO AREA.....................................              XX
Baltimore District.....................................              XX
Capital District.......................................              XX
South Carolina District................................              XX
Greensboro District....................................              XX
Mid-Carolinas District.................................              XX
No. Virginia District..................................              XX
Richmond District......................................              XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 14 in the
  Proposal has been changed to Table 9-A.

    The mail variance for Package Services parcels will be reported 
separately with the percentage of mail that is delivered within one-
day, two-days, and three-days of the applicable standard. The proposed 
quarterly report format with the mail variance for Package Services is 
as follows:

Table 9.-B\1\.--Quarterly Service Performance for Package Services Mail Variance; Sample Quarterly Report Format
                                 with Mail Variance for Package Services Parcels
----------------------------------------------------------------------------------------------------------------
                                                                  Within + 1-day   Within +  2-    Within +  3-
                            District                                 (percent)    days (percent)  days (percent)
----------------------------------------------------------------------------------------------------------------
CAPITAL METRO AREA..............................................              XX              XX              XX

[[Page 72414]]

 
Baltimore District..............................................              XX              XX              XX
Capital District................................................              XX              XX              XX
South Carolina District.........................................              XX              XX              XX
Greensboro District.............................................              XX              XX              XX
Mid-Carolinas District..........................................              XX              XX              XX
No. Virginia District...........................................              XX              XX              XX
Richmond District...............................................              XX              XX              XX
----------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 15 in the Proposal has been changed to Table 9-B.

8.4.2 Annual Reporting
    The Postal Service proposes reporting national measures for the 
percentage of Package Services mail delivered on time. Annual 
performance consists of a weighted average that allots weight based on 
the volume of mail in each district. If the data are not 
representatively distributed, the weighting will ensure that each 
district counts for its fair share in the national aggregate. The 
proposed report format for Parcels Annual Compliance Report is as 
follows:

Table 9-C.\1\--Annual Compliance Report; Sample Annual Report Format for
                            Package Services
------------------------------------------------------------------------
                                                             On-time
              Mail class                 Goal (percent)     (percent)
------------------------------------------------------------------------
Package Services......................              XX               XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 16 in the
  Proposal has been changed to Table 9-C.

9. Special Services

9.1 Background

    There are two categories of special services: ancillary and stand-
alone. Ancillary special services are purchased in addition to the 
postage applicable to First-Class Mail, Periodicals, Standard Mail, and 
Package Services. These optional special services are varied in nature 
and include Delivery Confirmation, Signature Confirmation, Certified 
Mail, Return Receipt, Registered Mail, Collect on Delivery, Address 
Correction Service, and CONFIRM, among others. In contrast to ancillary 
special services, stand-alone special services are not contingent on 
sending or receiving a particular mail piece and include services such 
as P.O. Box Service and Address List Services.

9.2 Delivery Confirmation, Signature Confirmation, Certified Mail, 
Registered Mail, Electronic Return Receipt, and Collect on Delivery

    A principal feature of these special services is the electronic 
provisioning of information by the Postal Service to the sender 
regarding the delivery status of a particular mail piece. That 
information may consist of confirmation that delivery was attempted, 
completed, or that a copy of the recipient's signature was captured.
    For a number of these services, delivery-related information is 
generated by postal scanning of mail pieces at delivery units or during 
delivery. Before the completion of daily work shifts, postal delivery 
personnel dock their portable handheld scanners, so that delivery 
information pertinent to each scanned mail piece can be transmitted to 
appropriate postal data systems. New scanners currently being deployed 
allow for signatures to be captured at delivery and transmitted with 
the delivery information. Delivery information captured is then made 
available to the purchaser of the special service.
    The service measurement for Delivery Confirmation, Signature 
Confirmation, Certified Mail, Registered Mail, electronic Return 
Receipt, and Collect on Delivery will use barcode scans to measure the 
time between when delivery information was collected and when that 
information was made available to the customer. When the delivery event 
scan is captured by the handheld scanner, a timestamp is associated to 
the scan; this is the ``start-the-clock.'' Once the device is docked, 
the delivery event scan information is transmitted to the centralized 
system where it is made available to customers and the posting time is 
recorded. The posting time is the ``stop-the-clock.''

9.3 CONFIRM and Address Correction

    Electronic information from the Postal Service to the sender is a 
key component for CONFIRM and automated Address Correction services as 
well. CONFIRM scanning of mail and identification of automated address 
correction of applicable mail pieces are performed passively by 
automated mail processing equipment, which then transmit information to 
postal data systems. Information from these systems is made available 
to the purchaser of the special service.
    The service measurement for CONFIRM and automated Address 
Correction will use the IMB to measure between the time scan 
information was collected and the time scan information was made 
available to the customer. When the piece is scanned, a timestamp is 
associated to the scan to provide the ``start-the-clock.'' When the 
scan information is transmitted to the centralized system and made 
available to customers, the posting time is recorded. The posting time 
is the ``stop-the-clock.''

9.4 P.O. Box Service

    Post Office Box Service will be internally measured using scanning 
technology to ensure timely availability of the mail by the posted 
``uptime.'' The ``uptime'' is the time of day by which customers can 
expect to collect the mail that is committed for that day from their 
P.O. Box. A barcode will be placed in the P.O. Box Section that the 
Postal Service will scan after the distribution of this mail is 
complete. USPS will evaluate performance by comparing the actual 
completion of the box

[[Page 72415]]

distribution for this mail compared to the posted ``uptime'' for the 
location.

9.5 Insurance Claims Processing

    The Customer Inquiry Claims Response System (CICRS) is an 
application used to process indemnity claims when insured articles are 
lost or damaged in the mail. For domestic claims, after the customer 
has completed the appropriate claim form, Postal Service employees 
complete the claim form and submit it for processing via the CICRS 
system. The claim is keyed into the system and the data is uploaded for 
processing. CICRS processing includes identifying claims that are not 
complete and require additional information from the customer. 
Correspondence is automatically generated and mailed to the customer 
requesting the missing information, which includes instructions with 
where to send the additional information. Once all information is 
received by CICRS, the system will proceed to the claims processing 
resolution phase. The date that all information is available for claims 
processing resolution is the ``start-the-clock.'' Depending on the 
value of the item lost or damaged, the claim may be automatically paid 
or denied by the system or sent for review by an adjudicator or 
consumer advocate. The adjudicator or consumer advocate decides if the 
claim should be paid, denied, or closed. The date either the system or 
the adjudicator pays, denies, or closes the claim is the ``stop-the-
clock.''

9.6 Money Order Inquiry Processing

    The Money Order Inquiry System (MOIS) is an application used to 
process Postal Money Order inquiries made by customers. After the 
customer has completed the appropriate form, Postal Service employees 
submit the form to a centralized unit for processing. The inquiry is 
scanned into the system and the data are uploaded for processing. MOIS 
processing includes verifying if the money order subject to inquiry has 
been cashed, by running the money order number against a database of 
cashed money orders. The system generates correspondence to customers 
regarding the status of the money order in question. The Postal Service 
intends to establish a service standard of 15 business days for this 
service. The ``start-the-clock'' is the date the Money Order Inquiry 
form is filed by the customer; the ``stop-the-clock'' is the date the 
money order inquiry information is issued to the customer by the Money 
Order Inquiry System.

9.7 Address List Services

    Address List Services are available to customers seeking correction 
of the addresses or ZIP Codes on their mailing lists, or the sequencing 
of their address cards. Address Changes for Election Boards, 
corrections of addresses or ZIP Codes on mailing lists, and Sequencing 
of Address Cards will use an external customer survey to measure 
customer satisfaction with the timeliness of receipt for their address 
list request. The service performance measure will include the customer 
satisfaction percentage.

9.8 Reporting

9.8.1 Quarterly Reporting
    The Postal Service proposes reporting Delivery Confirmation, 
Signature Confirmation, Certified Mail, Registered Mail, electronic 
Return Receipt, and Collect on Delivery as an aggregate score on a 
quarterly basis by district. The service standards for these special 
services are aggregated as they all measure the time elapsed from when 
the delivery information is captured by the Postal Service until it is 
available to the customer. The Post Office Box Service will also be 
reported quarterly by district.
    Since CONFIRM, Address Correction, Insurance Claims Processing, 
Money Order Inquiry Processing, and Address List Services are national 
services and are not linked with particular postal districts, they will 
be reported at a national level. The Postal Service proposes reporting 
quarterly on the percentage of those services that meet the service 
standard.
    The proposed quarterly report format for Special services is as 
follows:

  Table 9.-D \1\.--Quarterly Service Performance for Special Services;
   Sample Quarterly Report Format for Special Services Reported at the
                             District Level
------------------------------------------------------------------------
                                            Delivery
                                          information
                                            special      Post office box
               District                     services     service on-time
                                         combined score     (percent)
                                          \2\  on-time
                                           (percent)
------------------------------------------------------------------------
CAPITAL METRO AREA....................              XX               XX
Baltimore District....................              XX               XX
Capital District......................              XX               XX
South Carolina District...............              XX               XX
Greensboro District...................              XX               XX
Mid-Carolinas District................              XX               XX
No. Virginia District.................              XX               XX
Richmond District.....................              XX               XX
------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 17 in the
  Proposal has been changed to Table 9-D.
\2\ Includes Delivery Confirmation, Signature Confirmation, Certified
  Mail, Registered Mail, electronic Return Receipt, and Collect on
  Delivery.

    The proposed quarterly report format for CONFIRM, Address 
Correction, Insurance Claims Processing, Postal Money Order Inquiry 
Processing, and Address List Services is as follows:

[[Page 72416]]



        Table 9-E.\1\--Quarterly Report for Special Services; Sample Quarterly Report Format for Special Services Reported at the National Level
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Insurance                        Address list
                                                                                          Address           claims        Money order        services
                                                                     Confirm on-time   correction on-   processing on-  inquiry on-time     satisfied
                                                                                      time  (percent)  time  (percent)      (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
NATIONAL...........................................................              XX               XX               XX               XX               XX
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For purposes of publication, the reference to Figure 18 in the Proposal has been changed to Table 9-E.

9.8.2 Annual Reporting
    Due to the numerous different measurements presented in the Special 
Service category, the Postal Service will develop an annual index or 
indices that consolidate the multiple measurements into an aggregate 
score(s). The exact approach is still being developed; however, the 
methodology is intended to be similar to the aggregate measurement used 
for the Customer Service Measurement (CSM).

10. Service Performance Measurement Validation

    Every aspect of the service performance measurement system must 
reflect the highest degree of commitment to data integrity. 
Accordingly, the Postal Service will implement appropriate internal 
control processes in addition to the existing quality control processes 
in place for the external measurement systems (EXFC and IMMS). The 
existing measurement systems apply a proven and auditable approach to 
quality assurance backed up by 17 years experience in mail performance 
measurement.
    The Postal Service's proposed measurement approach includes 
internal validation processes to ensure data quality. Business rules 
will be defined to ensure that only mailings that do not meet mail 
preparation standards are excluded from service performance. In 
addition, service performance data will be made available to the Office 
of the Inspector General (OIG) for auditing purposes.

11. Appendix

11.1 Appendix I--Mail Volumes

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Single-piece                                                              Presort                                               ALL
                                     -----------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Letters       Flats              Parcels                   Letters                    Flats                          Parcels
                                     -----------------------------------------------------------------------------------------------------------------------------------------------
                                       2006 Total   2006 Total   2006 Total                2006 Total      2009      2006 Total      2009      2006 Total                   2009      2006 Total
                                         volume       volume       volume    2006 DelCon     volume      Adoption      volume      Adoption      volume    2006 DelCon     Sample
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      1. Total Mail Volume by Mail Classification (000's)**
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adoption Rate.......................  ...........  ...........  ...........  ...........  ...........          25%  ...........          25%  ...........  ...........           5%  ...........
First-Class.........................   38,127,475    3,405,121      350,979       14,208   54,550,677   13,637,669      993,985      248,496      189,216       89,782        4,489   97,617,453
Periodicals.........................  ...........  ...........  ...........  ...........      140,682       35,171    8,880,202    2,220,051  ...........  ...........  ...........    9,020,884
Standard............................  ...........  ...........  ...........  ...........   61,971,735   15,492,934   39,911,201    9,977,800      576,623       54,473        2,724  102,459,559
    Standard Carrier Route..........  ...........  ...........  ...........  ...........    9,561,885    2,390,471   26,087,072    6,521,768  ...........  ...........  ...........   36,648,967
    Standard Non Carrier Route......  ...........  ...........  ...........  ...........   52,409,850   13,102,463   13,824,129    3,456,032  ...........  ...........  ...........   66,810,602
Package Services \*\................  ...........       12,000       93,599       14,105  ...........  ...........      326,374       81,594      490,738      103,108        5,155      922,711
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Package Services excludes Parcel Select because it is not a market dominant product and Service Performance Measurement is not required.
** 2006 Total mail volume sums to 210 billion due the exclusion of Parcel Select because it is not a market dominant product.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    2. Percent of Mail Class
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
First-Class.........................      39.058%       3.488%       0.360%       0.015%       55.88%       13.97%        1.02%        0.25%        0.19%        0.09%        0.26%     100.000%
Periodicals.........................  ...........  ...........  ...........  ...........        1.56%        0.39%       98.44%       24.61%  ...........  ...........  ...........     100.000%
Standard............................  ...........  ...........  ...........  ...........       60.48%       15.12%       38.95%        9.74%        0.56%        0.05%        0.16%     100.000%
    Standard Carrier Route..........  ...........  ...........  ...........  ...........       26.82%        6.71%       73.18%       18.29%  ...........  ...........  ...........     100.000%
    Standard Non Carrier Route......  ...........  ...........  ...........  ...........       78.45%        8.42%       20.69%        9.69%  ...........  ...........  ...........     100.000%
Package Services....................  ...........       1.301%      10.144%       1.529%  ...........  ...........        0.92%        0.23%       53.18%       11.17%        0.30%     100.000%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 3. Percent of Total Mailstream
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
First-Class.........................      17,955%       1.604%       0.165%       0.007%      25.690%       6.422%       0.468%       0.117%       0.089%       0.042%       0.002%      45.971%
Periodicals.........................  ...........  ...........  ...........  ...........       0.066%       0.017%       4.182%       1.045%  ...........  ...........  ...........       4.248%
Standard............................  ...........  ...........  ...........  ...........      29.184%       7.296%      18.795%       4.699%       0.272%       0.026%       0.001%      48.252%
    Standard Carrier Route..........  ...........  ...........  ...........  ...........       4.503%       1.126%      12.285%       3.071%  ...........  ...........  ...........      16.788%
    Standard Non Carrier Route......  ...........  ...........  ...........  ...........      24.681%       6.170%       6.510%       1.628%  ...........  ...........  ...........      31.463%
Package Services....................  ...........       0.006%       0.044%       0.007%  ...........  ...........       0.154%       0.038%       0.231%       0.049%       0.002%       0.435%
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 72417]]


 
                                                          FY '09 IMB/
                                   FY '09 volume per  electronic mailing   FY '09 IMB volume  Volume at external
                                     household\*\         information        per household         reporters
                                                           adoption
----------------------------------------------------------------------------------------------------------------
                                    4. Estimated Volume to External Reporters
----------------------------------------------------------------------------------------------------------------
First-Class Mail--Single-piece..                 223                 N/A                 N/A                 N/A
First-Class Mail--Presort.......                 296                 25%                  74             740,000
Standard........................                 760                 25%                 190           1,900,000
Periodicals.....................                  59              10-25%           5.9-14.75      59,000-147,500
----------------------------------------------------------------------------------------------------------------
\*\Per 2006 Household Diary Study
----------------------------------------------------------------------------------------------------------------

    Table 1 includes the total mail volumes in FY 2006 for each mail 
category. This table also includes the projected IMB and electronic 
mailing information adoption rates for FY 2009 and the estimated 
volumes for each year. The estimated volumes for FY 2009 represent the 
total mail volumes that will be included in service performance 
measurement. All volumes are in thousands.
    Table 2 depicts the percent of the mail class that the mail 
category represents. For instance, single-piece First-Class Mail 
letters make up 39.058% of all First-Class Mail.
    Table 3 illustrates the percent of the total mailstream that the 
mail category represents. For example, single-piece First-Class Mail 
letters make up 17.955% of the entire mailstream.
    Table 4 provides an estimate of the volume expected to be received 
by the external reporters in FY 09. The volumes were estimated as 
follows:
    According to the 2006 USPS Household Diary Study, 1338 non-
expedited mail pieces were received per U.S. household during the past 
year broken down into the volumes shown in FY '09 Volume Per Household;
    Applying the Adoption Rates the result is FY '09 IMB Volume Per 
Household; and
    Since there will be 10,000 external reporters, the total mail 
volume scanned by external reporters is shown in Volume @ External 
Reporters.
    This estimate provides the number of pieces with end-to-end service 
measured by the external reporters in order to determine the factor 
differential for each mail category.
    This analysis assumes uniform distribution of the mail for each 
mail class and mail shape. It also assumes reporters never miss a day 
reporting and no mail received by reporters is excluded due to improper 
mailer preparation.

11.2 Appendix II--Enablers

    The success of the service performance measurement system relies on 
many efforts already underway at the Postal Service. The Postal Service 
expects completion of all components needed for service performance 
measurement by 2009.
11.2.1 Intelligent Mail Series of Barcodes
    The Postal Service has recently introduced three new Intelligent 
Mail barcodes that enable the tracking of pieces, handling units, and 
containers as they move across the Postal Service network. Each of 
these barcodes are mailer applied and have a common customer identifier 
called the Mailer ID (MID) which can be used to associate the mail 
asset to the appropriate mailer. Each barcode also has a field that is 
used to support a serial number allowing mailers of any size to 
identify their mail assets.
    The Mailer ID field within the Intelligent Mail barcodes is used to 
identify Mail Owners and/or Mailing Agents. The MIDs are assigned by 
the Postal Service to each Mail Owner and/or Mailing Agent that 
requests them. A MID can be a 9-digit field or a 6-digit identifier and 
is assigned based on the annual mail volume of the mailer. MIDs are 
used in the Intelligent Mail barcode, Intelligent Mail Tray barcode, 
and Intelligent Mail Container barcode. [Figure 19, captioned 
``Intelligent Mail Series of Barcodes'' is not reproduced here. It can 
be viewed by accessing the pdf version of the Service Performance 
Measurement filing (December 5, 2007) posted on the Commission's Web 
site.]
    Intelligent Mail Barcode (IMB). The Intelligent Mail barcode is a 
31-digit Postal Service barcode used to sort and track letters and 
flats. Unlike the POSTNET barcode that only contains the delivery point 
ZIP Code, the new Intelligent Mail barcode contains additional fields 
such as the Service Type Indicator, Mailer ID, and Serial Number. These 
fields expand the ability to track individual pieces and provide 
greater visibility into the mailstream. With this Intelligent Mail 
barcode, a mailer can request services such as tracking and address 
correction all in one barcode. The Intelligent Mail barcode allows the 
mailer to number mail so that each mailpiece in a mailing can be 
uniquely identified. It contains a Mailer ID field that allows the 
mailer to obtain data about mailings.
    Intelligent Mail Tray Barcode. A cornerstone of the overall 
tracking strategy is the capability to uniquely track handling units 
such as trays, sacks, and tubs. The tray label that is in use today is 
a 10-digit label used solely for routing. The new transitional label, 
the 10/24, has the old barcode on it and a new 24-digit Intelligent 
Mail Tray barcode. The 24-digit barcode includes routing information 
and data that can uniquely identify handling units and allows for the 
identification and tracking of the progress of trays, sacks, and tubs. 
The inclusion of the old 10-digit label is a transitional strategy as 
the Postal Service enhances all processing systems to read the new 24-
digit barcode.
    Ideally, mailpieces with the Intelligent Mail barcodes applied to 
them are placed into trays that are presorted and being routed to 
specific destinations. Using the Intelligent Mail Tray barcode allows 
the pieces within the tray to be linked to each specific tray prepared.
    [Figure 20, captioned ``Intelligent Mail Tray Barcode Affixed to 
Postal Service Mail Tray shows the Intelligent Mail Tray barcode 
affixed to a tray,'' is not reproduced here. It can be viewed by 
accessing the pdf version of the Service Performance Measurement filing 
(December 5, 2007) posted on the Commission's Web site.]
    Intelligent Mail Container Barcode. The Postal Service is 
transitioning to a new pallet label for application on containers. The 
new pallet label contains the Intelligent Mail Container barcode 
allowing mailers to uniquely identify each container in a mailing. The 
Intelligent Mail Container barcode is applied to a customer's 
containers that contain trays and sacks. This barcode is applied by 
mailers and scanned at induction and at other points of the mailstream 
by handheld scanners.
    [Figure 21, captioned ``Intelligent Mail Container Barcode Affixed 
to a Mailer Pallet shows the Intelligent Mail Container barcode affixed 
to a pallet,'' is not reproduced here. It can be viewed by accessing 
the pdf version of the Service Performance Measurement filing (December 
5, 2007) posted on the Commission's Web site.]
    Intelligent Mail package Barcode. The Intelligent Mail Package 
barcode conforms to different barcoding

[[Page 72418]]

standards to accommodate the package market, but its benefits are 
similar to those created by the Intelligent Mail barcode for letters 
and flats. It contains information about the package and the mailer, 
which is used to sort and track the packages.
    [Figure 22, captioned ``Intelligent Mail Package Barcode Affixed to 
a Parcel shows the Intelligent Mail Package barcode affixed to a 
parcel,'' is not reproduced here. It can be viewed by accessing the pdf 
version of the Service Performance Measurement filing (December 5, 
2007) posted on the Commission's web site.]
11.2.2 Electronic Mailing Information
    There are three forms of electronic mailing information 
transmission for letter and flat-shaped mail: Mail.dat[reg], Web 
Services, and Postage Statement Wizard[reg]. All involve sending 
information to the Postal Service's PostalOne![reg] system. All three 
of these options provide customers the ability to submit electronic 
information about their mailings, which the Postal Service can use to 
generate the necessary documentation to support verification, payment, 
and ``start-the-clock.'' This electronic information can also be used 
to automate payment processes using electronic payment options such as 
ACH Credit or Debit.
    PostalOne! System. The PostalOne! system enables Intelligent Mail 
by serving as the single point of entry for all electronic mailing 
information used in service performance measurement to validate mail 
piece scan data. The PostalOne! system manages business mailing 
transactions and streamlines the mail acceptance process by 
facilitating the electronic exchange of mailing information between 
mailers and the Postal Service. This collaboration gives customers a 
streamlined process for mail entry, payment, tracking and reporting.
    Customers select one of the electronic mailing information 
transmission methods (Mail.dat, Web Services, Postage Statement Wizard) 
and send the electronic information using the PostalOne! system. This 
information management system provides an electronic linkage between a 
customer's mailing information and Postal Service business mail 
acceptance and induction processes. The PostalOne! system translates 
this customer generated electronic information into mailing 
documentation. Thus, mailers are able to avoid the creation of paper 
based forms and use technology to manage their mailing data. PostalOne! 
can also use this information to automate payment processes using ACH 
Debit or Credit payment methods. With the PostalOne! system, mailers 
have 24X7 access to their mailing documentation and financial 
transaction information.
    Mail.dat[reg]. Mail.dat is a composite file structure that was 
developed by the IDEAlliance[reg] organization for the industry to 
communicate mailing information across the mail supply chain. Mail.dat 
files are sent electronically to the PostalOne! system where they are 
stored and used to generate documentation to support verification and 
payment.
    Web Services. Web Services enables customers to submit mailing 
information using a Web Service over a secure connection (HTTPS) with 
the Postal Service. Web Services use a SOAP protocol to submit 
information in an XML format that ensures that the data can be sent and 
received by applications written in various languages and deployed on 
various platforms.
    Postage Statement Wizard. The Postage Statement Wizard (PSW) is a 
tool that provides a secure way to submit a postage statement online 
using a PostalOne! account. The PSW verifies completed information for 
an online postage statement. The PSW automatically populates the permit 
holder section of the postage statement based on the account number 
provided. It guides the user through the items needed to complete the 
statement based on information provided. When entering mailing 
information through PSW, it automatically calculates the postage and 
validates the information entered. Once the postage statement is 
completed online, the electronic statements will be submitted directly 
to the acceptance unit.
    There is one method of electronic mailing information for parcel-
shaped mail--the Confirmation Services file. The Confirmation Services 
file is submitted to the Product Tracking System (PTS). Electronic 
mailing information is a requirement for Presort parcel mailers to 
qualify for the electronic rate option.
    Product Tracking System. The Product Tracking System (PTS) provides 
tracking information for Confirmation Services, i.e., Delivery 
Confirmation and Signature Confirmation, as well as Express Mail. 
Parcel mailers create manifests and submit them electronically to the 
Product Tracking System. The electronic manifests are processed in PTS 
and then sent to PostalOne! for financial reconciliation.
    Confirmation Services file. To qualify for the reduced rates of the 
electronic Confirmation Services option, mailers are required to send a 
file electronically with a listing of all the barcodes and some related 
shipping information. The electronic file contains information about 
the mailer, the date and time of mailing, the entry facility, the 
tracking number, and the destination ZIP Code for each parcel. Delivery 
information about the mail pieces is made available electronically in 
extract files. The Delivery information includes an ``electronic 
receipt'' for each mail piece submitted and associated scan events. 
Payment for the postage is unaffected by this service.
11.2.3 Facility Access and Shipment Tracking (FAST)
    The Facility Access and Shipment Tracking (FAST) system is an 
electronic appointment system that mailers use to schedule the deposit 
of mail at postal facilities. Customers may schedule appointments 
online using the FAST web site or they may submit appointment requests 
using the Transaction MessagingTM specifications submitted 
through PostalOne!/FAST Web Services. This convenient messaging 
protocol provides customers the opportunity to integrate the 
appointment scheduling process into their supply chain management 
software and receive information about their appointments from the 
Postal Service electronically. FAST takes into account mail shape 
(e.g., letters, flats, and parcels) and pallet presort-level 
information to maximize the capacity offered at each facility. All 
Periodicals, Standard Mail, and Package Services drop shipment 
customers are required to schedule appointments using FAST at 
designated facilities. First-Class Mail will be enabled in 2008.
11.2.4 Seamless Acceptance
    Seamless Acceptance streamlines the business mail acceptance 
process by automating the Business Mail Entry (BME) mail verification 
processes for letter and flat mail. By applying unique barcodes on mail 
pieces, handling units and containers, and providing barcode 
information in electronic mailing information, Seamless Acceptance 
mailers support the automation of verification processes. Seamless 
Acceptance mail receives Postal Service mail-processing scans of the 
barcodes and the Postal Service uses the information gathered to verify 
the electronic mailing information submitted by the mailers and to 
determine mail preparation quality.
    The business benefits envisioned from the implementation of 
Seamless Acceptance include, but are not limited to:

[[Page 72419]]

    Increasing the quality of the mail and mailers' electronic mailing 
information by providing timely feedback to mailers through actionable 
mail quality reports;
    Allowing mailers additional flexibility in selecting the timeframe 
and location of mail entry;
    Improving the accuracy of the verification process through analysis 
of a larger percentage of mail pieces of a mailing;
    Introducing more accountability for all participants by basing 
verification results on mail processing data instead of clerk performed 
tests;
    Enhancing automation compatibility based on results from Postal 
Service mail processing equipment;
    Identifying and eliminating systemic problems in Postal Service 
mail handling and mailer preparation;
    Providing near real-time visibility for both mailers and the Postal 
Service;
    Decreasing cycle time and reduce costs across the mail supply 
chain;
    Increasing amount of time Postal Service clerks are available for 
customer service; and
    Reducing/removing sampling procedures during verification.
11.2.5 Mail Processing Equipment
    As mail processing equipment sorts a mail piece, information is 
gathered from machine scans to determine the piece's location within 
the postal network. All major mail processing equipment has the ability 
to scan the Intelligent Mail barcode on mail pieces during processing. 
The machines with mail piece barcode scanning capability include:
    Letters: Delivery Barcode Sorters (DBCS), Mail Processing Barcode 
Sorters (MPBCS), and Carrier Sequence Barcode Sorters (CSBCS);
    Flats: AFSM 100 and UFSM 1000; \24\
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    \24\ UFSM 1000 can read barcodes printed at original 
specifications and will be updated in early 2008 to read barcodes 
printed according to the revised specifications.
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    Packages: Automated Package Processing System (APPS) and Small 
Package Bundle Sorter (SPBS).
11.2.6 Intelligent Mail Device (IMD)
    The Intelligent Mail Device (IMD) is an ergonomically designed, 
handheld computer capable of running mail processing applications and 
scanning barcodes. The Postal Service has rolled out new Intelligent 
Mail Devices to carriers, mail handlers, and drivers. The Intelligent 
Mail Devices currently in the field can read IMBs, but will need a 
software upgrade in order to collect data using new start- and ``stop-
the-clock'' event codes, parse the data in the codes, and make that 
data available to other USPS systems.
11.2.7 Intelligent Mail Data Acquisition System (IMDAS)
    IMDAS has replaced the handheld scanners that carriers, mail 
handlers, and drivers formerly used to scan IMBs on handling units and 
Delivery Confirmation forms.
    The Intelligent Mail Data Acquisition System (IMDAS) program is 
implementing a standardized hardware and software platform for mobile 
data collection and data transfer through scanning technology. The 
IMDAS program promotes a family of handheld data acquisition devices to 
support the current scanning needs of Postal Service products and 
services, as well as support the future scanning needs of Intelligent 
Mail products and services. The IMDAS supports tracking mail pieces, 
unit loads, transportation, inventory and performance operations using 
a standardized family of mobile devices. This program includes 
replacing the current Mobile Data Collection Device (MDCD) scanners, 
which postal personnel use for delivery operations, dock operations, 
and customer service operations. The Intelligent Mail Data Acquisition 
System was developed using integrated architecture and infrastructure 
that are consistent with industry best practices. The IMDAS yields an 
accurate, reliable, and stable flow of data, and is required to 
interface successfully with the existing postal infrastructure.

III. Ordering Paragraphs

    It is ordered:
    1. Docket No. PI2008-1 is established for the purpose of receiving 
comments regarding the Postal Service's proposed service performance 
measurement systems.
    2. Interested persons may submit written comments on any or all 
aspects of the Postal Service's proposed service performance 
measurement systems and reporting systems by no later than January 18, 
2008.\25\
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    \25\ Changed from January 7, 2008 (per Order No. 48) by Order 
No. 49.
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    3. Reply comments may be filed by no later than February 1, 
2008.\26\
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    \26\ Changed from January 18, 2008 (per Order No. 48) by Order 
No. 49.
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    4. Kenneth E. Richardson, acting director of the Office of the 
Consumer Advocate, is designated to represent the interests of the 
general public in this docket.
    5. The Secretary shall arrange for publication of this Notice in 
the Federal Register.

    (Authority: 39 U.S.C. 3691(b)(1)(D) and (b)(2)).

Steven W. Williams,
Secretary.
 [FR Doc. E7-24528 Filed 12-19-07; 8:45 am]
BILLING CODE 7710-FW-P