[Federal Register Volume 77, Number 135 (Friday, July 13, 2012)]
[Proposed Rules]
[Pages 41336-41337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-16570]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2012-5; Order No. 1388]


Analytical Methods Used in Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of filing.

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SUMMARY: The Commission is noticing a recently-filed Postal Service 
request to initiate an informal rulemaking proceeding to consider 
changes in analytical methods used in periodic reporting. This notice 
addresses procedural steps associated with the filing.

DATES: Comments are due July 31, 2012.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at http://www.prc.gov. Commenters who cannot submit their 
views electronically should contact the person identified in FOR 
FURTHER INFORMATION CONTACT by telephone for advice on alternatives to 
electronic filing.

FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel 
at 202-789-6820.

SUPPLEMENTARY INFORMATION: On June 26, 2012, the Postal Service filed a 
petition pursuant to 39 CFR 3050.11 requesting that the Commission 
initiate an informal rulemaking proceeding to consider changes in the 
analytical methods approved for use in periodic reporting.\1\
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    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposals One through Five), June 26, 2012 
(Petition).
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    Proposal One. Elimination of Separate Delivery Costs for Carrier 
Route Letters, Flats, and Parcels. The Postal Service proposes to 
eliminate the separate, shape-based reporting of unit costs within 
Standard Mail Carrier Route. The Postal Service states that ``Carrier 
Route flats represent over 99

[[Page 41337]]

percent of Carrier Route volume,'' and that Carrier Route letter costs 
are unreliable. Petition at 2-3. The Commission discussed the 
reliability issue in the 2011 Annual Compliance Determination Report. 
FY2011 ACD at 120-121. In the ACD, the Commission recognized the 
possibility of merging unit cost data for Carrier Route letters and 
flats, but did not discuss unit costs of Carrier Route parcels. Id. at 
121.
    Proposal Two. Calculation of City Carrier Scanning Costs for All 
Non-Accountable Delivery Scans. Last year, the Postal Service 
introduced the USPS Tracking Barcode to better track parcels. However, 
the Postal Service states that the costs of USPS Tracking Barcode 
delivery scans performed by city carriers during street activities are 
not calculated. The Postal Service proposes to extend the established 
methodology for calculating the city carrier street scanning costs to 
all non-accountable delivery scans performed by city carriers during 
street activities (Cost Segment 7). The methodology would also apply to 
other non-accountable delivery scans that the Postal Service may 
introduce in the future. Petition at 4. According to the Postal 
Service, Proposal Two would increase the attributable costs of domestic 
market dominant parcels by between 1.7 and 3.2 percent, increase the 
attributable costs of domestic competitive products by 1.9 percent, 
reduce the attributable costs of domestic market dominant ancillary 
services by between 0.3 and 0.6 percent, and reduce the attributable 
costs of International Mail by 0.2 percent. Id. at 5-6.
    Proposal Three. Changes in IOCS Encirclement Rules. Currently, all 
Registered mail, both domestic and International, is encircled in all 
operations.\2\ According to the Postal Service, this is consistent with 
operations for domestic Registered and outbound International 
Registered, because such pieces receive hand-to-hand transfers. 
However, in 2009, the Postal Service says that it changed the operating 
procedures for inbound Registered mail such that those pieces now 
travel in the regular letters and flats mailstreams rather than in the 
Registered mailstream. The Postal Service proposes to update the 
encirclement rules for inbound Registered mail and for certain other 
Extra Services to reflect changes in operations and to correct 
inconsistencies. For the C.O.D., Certified, Insured, and Signature 
Confirmation Extra Services, encirclement would be added for certain 
mail processing and window operations. Petition at 7-8.
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    \2\ Encirclement is the process of allocating the cost of 
handling a mailpiece with an Extra Service to the Extra Service 
rather than to the host mailpiece. Encirclement is appropriate when 
an Extra Service is the main reason that an employee handles a 
mailpiece. Id. at 7.
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    Proposal Three would affect attributable costs in Cost Segment 3. 
Inbound Registered mail attributable costs would decline by 38.3 
percent. Attributable costs of competitive products would decline by 
0.1 percent. Attributable costs of First-Class mail would decline by 
0.7 percent. Attributable costs of Parcel Post would decline by 0.4 
percent. Attributable costs of Inbound LC/AO would increase by between 
6.5 and 13.8 percent. Attributable costs of certain Extra Services 
would increase by between 1.7 and 64.8 percent. Id. at 9.
    Proposal Four. Changes in IOCS Reporting Codes. The Postal Service 
proposes to make changes to In-Office Cost System activity codes and 
operation codes. These changes are:
    1. Streamline activity codes by eliminating codes that are no 
longer used for costing;
    2. Combine the operation codes for Outgoing Primary Distribution 
and Outgoing Secondary Distribution into one code;
    3. Add a code for Managed Mail Distribution; and
    4. Add or change codes to account for the recent transfers of 
Parcel Select Lightweight and First-Class Package Service to the 
competitive product list. Id. at 10-12. The Postal Service asserts that 
Proposal Four will have no impact on product costs. Id. at 13.
    Proposal Five. Changes to Methodology of Distributing Costs 
Incurred by Vehicle Service Drivers. The Postal Service proposes a new 
distribution key for allocating the attributable costs of Vehicle 
Service Drivers (Cost Segment 8). The new distribution key is derived 
from a new subsystem of the Transportation Cost System (TRACS) called 
TRACS-VSD. The current distribution key relies on the costs of intra-
sectional center facility purchased highway transportation in Cost 
Segment 14. The Postal Service believes that it has developed a 
sampling frame that enables the development of a statistical system 
similar to the four TRACS subsystems representing purchased highway 
transportation. Id. at 14-15.
    For most classes of mail, the Postal Service shows a change in unit 
attributable cost in mills (tenths of a cent). However, the unit 
attributable cost of Media and Library Mail declines by 4.5 cents and 
the unit attributable cost of International Mail rises by 1.7 cents. 
Id. at 16.
    The Petition, and an accompanying Appendix, are available for 
review on the Commission's Web site, http://www.prc.gov.
    Pursuant to 39 U.S.C. 505, James Callow is designated as Public 
Representative to represent the interests of the general public in this 
proceeding. Comments are due no later than July 31, 2012.
    It is ordered:
    1. The Petition of the United States Postal Service Requesting 
Initiation of a Proceeding To Consider Proposed Changes in Analytical 
Principles (Proposals One through Five), filed June 26, 2012, is 
granted.
    2. The Commission establishes Docket No. RM2012-5 to consider the 
matters raised by the Postal Service's Petition.
    3. Interested persons may submit comments on Proposals One through 
Five no later than July 31, 2012. Reply comments are due no later than 
August 10, 2012.
    4. James Callow is appointed to serve as the Public Representative 
to represent the interests of the general public in this proceeding.
    5. The Secretary shall arrange for publication of this notice in 
the Federal Register.

    By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2012-16570 Filed 7-12-12; 8:45 am]
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