[Federal Register Volume 74, Number 122 (Friday, June 26, 2009)]
[Notices]
[Pages 30646-30647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-15135]



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POSTAL REGULATORY COMMISSION

[Docket Nos. MC2009-26 and CP2009-36; Order No. 228]


New Postal Product

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is noticing a recently filed Postal Service 
request to add Direct Entry Parcels (DEP) Contracts, International 
Return Service, and Harmonization Service to the Competitive Product 
List. The Postal Service has also filed a related contract. This notice 
addresses procedural steps associated with these filings.

DATES: Comments are due June 29, 2009.

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:

I. Introduction

    On June 11, 2009, the Postal Service filed a formal request 
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Direct 
Entry Parcels (DEP) Contracts, International Return Service, and 
Harmonization Service to the Competitive Product List.\1\ The Postal 
Service indicates that Governors' Decision No. 09-7, filed June 10, 
2009, establishes prices and classifications not of general 
applicability for the three products.\2\ The Request has been assigned 
Docket No. MC2009-26.
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    \1\ Request of the United States Postal Service to Add Direct 
Entry Parcels Contracts, International Return Service, and 
Harmonization Service to the Competitive Products List, and Notice 
of Filing (Under Seal) of Contract and Enabling Governors' Decision, 
June 11, 2009 (Request).
    \2\ Governors' Decision No. 09-10, filed June 10, 2009, 
establishes prices and classifications not of general applicability 
for Direct Entry Parcels Contracts, International Return Service and 
Harmonization Service Offered with Customized Agreements.
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    The Postal Service contemporaneously filed a DEP contract related 
to the new products pursuant to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. 
Request at 1. The contract has been assigned Docket No. CP2009-36.
    Request. The Request incorporates (1) A statement of supporting 
justification as required by 39 CFR 3020.32; (2) Governors' Decision 
No. 09-7 authorizing the new products, which include certification of 
the vote, requested changes to the Mail Classification Schedule (MCS) 
product list, and certification of the pricing formulas for compliance 
with 39 U.S.C. 3633(a); (3) price formulas and related information for 
DEP contracts, International Return Service and Harmonization Service 
Offered with Customized Agreements; and (4) Certification of Compliance 
with 39 U.S.C. 3633(a) for contract prices and ancillary services.\3\ 
Substantively, the Request seeks to add the Direct Entry Parcels 
Contracts, International Return Service, and Harmonization Service to 
the Competitive Product List. Id. at 1.
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    \3\ Attachment 1 to the Request consists of the Statement of 
Supporting Justification. Attachment 2 is the Decision of the 
Governors of the United States Postal Service on the Establishment 
of Prices and Classifications for Direct Entry Parcels Contracts, 
International Return Service Offered with Customized Agreements and 
Harmonization Service Offered with Customized Agreements (Governors' 
Decision No. 09-7). The Governors' Decision includes Attachment A-1, 
requested changes in the MCS product list; Attachment A-2, a 
Description of International Service Offered with Customized 
Agreements; Attachment A-3, Description of Harmonization Service 
Offered with Customized Agreements; Attachment B-1 Formulas for 
Prices Under Applicable Direct Entry Parcels Contracts; Attachment 
B-2, Formulas for Prices Under International Return Service Offered 
with Customized Agreements; Attachment B-3, Formulas for Prices 
Under Harmonization Service Offered with Customized Agreements; 
Attachment C-1, Analysis of the Formulas for Prices Under Direct 
Entry Parcels Contracts; Attachment C-2, Formulas for Prices Under 
International Return Service Offered with Customized Agreements; 
Attachment C-3, Formulas for Prices Under Harmonization Service 
Offered with Customized Agreements; and Attachment D, Certification 
as to the Formulas for Prices Offered Under Applicable Direct Entry 
Parcels Contracts, International Return Service Offered with 
Customized Agreements, and Harmonization Service Offered with 
Customized Agreements.
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    In the statement of supporting justification, Frank Cebello, Global 
Business Management, asserts that the service to be provided under the 
contract will cover its attributable costs, make a positive 
contribution to institutional costs, and increase contribution toward 
the requisite 5.5 percent of the Postal Service's total institutional 
costs. Id., Attachment 1. Thus, Mr. Cebello contends there will be no 
issue of subsidization of competitive products by market dominant 
products as a result of this contract. Id.
    Related contract. A redacted version of the instant contract is 
included with the Request. The Postal Service represents that the 
contract is consistent with 39 U.S.C. 3633(a), 39 CFR 3015.5 and 39 CFR 
3015.7. See id., Attachment 2. The DEP contract includes International 
Return Service and Harmonization Service as optional features which 
reflect the proposed MCS language in Attachments A-2 and A-3 of the 
Governors' Decision, respectively.\4\ DEP contracts provide for mail 
acceptance within the United States, transportation to a receiving 
country of parcels bearing the appropriate foreign indicia, 
transportation to customs within the receiving country, and customs 
clearance and prepayment of customs duties and taxes to the receiving 
country. The Postal Service explains that International Return Service 
provides for the return of refused or undeliverable items. It states 
that Harmonization Service offers review of outbound items by a 
licensed customs broker and the broker's assignment of Harmonized 
Tariff Schedule codes to facilitate assessment of customs duties. 
Request at 2-3. The Postal Service notes that the latter two services 
will only be available through customized agreements, in particular 
through DEP contracts similar to the instant contract.
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    \4\ The Postal Service states that the Governors' Decision 
establishes prices and classifications for Direct Entry Parcels 
Contracts. In addition, the Governors' Decision also establishes 
prices and classifications for both Harmonization Service and 
International Return Service which serve as ancillary services for 
the parcel service offered for DEP contracts. The Postal Service 
intends the complement of services offered for DEP to include 
Harmonization Service and International Return Service.
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    The contract becomes effective within 30 days after the Postal 
Service notifies the customer that it has received all required reviews 
and the Commission has provided all necessary regulatory approvals. The 
term of the agreement is one year from the effective date.
    The Postal Service filed much of the supporting materials, 
including Governors' Decision 09-7, and financial information, 
including analysis of the instant contract in redacted versions and 
under seal. In its Request, the Postal Service maintains that the 
contracts and related financial information, including the customers' 
names and the accompanying analyses that provide prices, terms, 
conditions, and financial projections, should remain under seal. Id. at 
3-4.
    The Postal Service requests that the Commission approve this DEP 
contract, as well as any subsequent functionally equivalent DEP 
contracts, as one product on the Competitive Product List. Id. at 1-2. 
The Request advances reasons why the DEP contracts as described in the 
proposed MCS language are in conformity with the requirements of 39 
U.S.C. 3642 as competitive products. Among other things, the Postal 
Service asserts the DEP contracts are intended for merchandise exempt 
from the Private Express Statutes; that that Postal Accountability and 
Enhancement Act

[[Page 30647]]

classifies bulk international mail as competitive; and that classifying 
the DEP contracts as competitive is consistent with Commission 
precedent. It contends that even though the senders of DEP items may 
mail individual pieces, the contract customer has committed to 
compensate the Postal Service for a bulk volume of DEP items. The 
Postal Service also notes that Direct Entry Parcels, Harmonization, and 
International Return Services are contractual services not available to 
individual retail customers. Id. at 4-5.

II. Notice of Filings

    The Commission establishes Docket Nos. MC2009-26 and CP2009-36 for 
consideration of the Request to add Direct Entry Parcels Contracts, 
International Return Service, and Harmonization Service to the 
Competitive Product List, and the related DEP Contract, respectively. 
In keeping with practice, these dockets are addressed on a consolidated 
basis for purposes of this order; however, future filings should be 
made in the specific docket in which issues being addressed pertain.
    Interested persons may submit comments on whether the Postal 
Service's filings in the captioned dockets are consistent with the 
policies of 39 U.S.C. 3632, 3633, or 3642, 39 CFR part 3015, and 39 CFR 
3020 subpart B. Comments are due no later than June 29, 2009. The 
public portions of these filings can be accessed via the Commission's 
Web site (http://www.prc.gov).
    The Commission appoints Emmett Rand Costich to serve as Public 
Representative in these dockets.

III. Ordering Paragraphs

    It is Ordered:
    1. The Commission establishes Docket Nos. MC2009-26 and CP2009-36 
for consideration of the matters raised in each docket.
    2. Pursuant to 39 U.S.C. 505, Emmett Rand Costich is appointed to 
serve as officer of the Commission (Public Representative) to represent 
the interests of the general public in these proceedings.
    3. Comments by interested persons in these proceedings are due no 
later than June 29, 2009.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.

Steven W. Williams,
Secretary.
[FR Doc. E9-15135 Filed 6-25-09; 8:45 am]
BILLING CODE 7710-FW-P