[Federal Register Volume 79, Number 189 (Tuesday, September 30, 2014)]
[Notices]
[Pages 58831-58832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23241]
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POSTAL REGULATORY COMMISSION
[Docket No. MT2014-1; Order No. 2197]
Market Test of Experimental Product-Customized Delivery
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Commission is noticing a recently-filed Postal Service
proposal to conduct a market test of an experimental product called
Customized Delivery. This notice informs the public of the filing,
invites public comment, and takes other administrative steps.
DATES: Comments are due: October 9, 2014.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at http://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Background
III. Notice of Filing
IV. Ordering Paragraphs
I. Introduction
On September 23, 2014, the Postal Service filed a notice, pursuant
to 39 U.S.C. 3641, announcing its intent to conduct a market test of an
experimental product called Customized Delivery.\1\ Customized Delivery
is a package delivery service offering that will provide customers with
delivery of groceries and other prepackaged goods during a 3 a.m. to 7
a.m. delivery window. Id. at 1. The market test will begin on or
shortly after October 24, 2014 and continue for two years. Id. at 6.
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\1\ Notice of the United States Postal Service of Market Test of
Experimental Product--Customized Delivery, September 23, 2014
(Notice). The Notice includes an Application for Non-Public
Treatment of Materials related to the Postal Service's pricing plans
for the market test.
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II. Background
On September 23, 2014, the Postal Service filed the Notice
proposing the Customized Delivery market test.\2\ It states that
grocery delivery services are expanding across the nation. Notice at 2.
It asserts that with its operational reach, the Postal Service can
provide retailers a nationwide solution offering a trained workforce
and the trust and reliability of the Postal Service brand. Id. The
Postal Service contends that it can garner profitable revenue through
new revenue streams by expanding its carrier services and offering
customized delivery. Id.
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\2\ On August 28, 2014, the Commission issued an order adopting
final rules for market tests of experimental products under 39
U.S.C. 3641. Docket No. RM2013-5, Order No. 2173, Order Adopting
Final Rules for Market Tests of Experimental Products, August 28,
2014. The rules were published in the Federal Register and will
become effective on October 14, 2014. 79 FR 54552 (September 11,
2014).
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Operational testing. The Postal Service recently began operational
testing for early morning grocery delivery. Id. The testing involves a
retailer packing groceries into retailer-branded totes, some of which
are chilled or include freezer packs.\3\ The retailer brings the totes
directly into Postal Service destination delivery units (DDU) between
1:30 a.m. and 2:30 a.m. Id. The totes, which have a Quick Response (QR)
code on the outside, are all the same size and color. Id. The retailer
provides a manifest file to the Postal Service, which contains the
address and QR code for each tote. Id. The Postal Service uses this
file to dynamically route totes and create a line of travel for each
route. Id.
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\3\ Id. The Postal Service does not explain what totes are.
Totes appear to refer to tote bags, which are large and often
unfastened bags with parallel handles that emerge from the sides of
its pouch.
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City Carrier Assistants (CCAs) use iPhones to scan the totes, which
are sorted by route and delivery order and back-loaded onto a truck for
delivery. Id. at 3. Deliveries occur from 3 a.m. to 7 a.m. and are
unattended; the carrier places the totes in a customer-designated
location for delivery. Id. Totes are scanned to provide tracking and
visibility through to delivery. Id. The public can easily recognize
CCAs, who wear postal uniforms and lighted caps as safety measures. Id.
Nature and scope of market test. Pursuant to section 3641(c)(1)(B),
the Postal Service provides a description of the nature and scope of
the market test. During operational testing, the Postal Service
delivered on average 1 to 4 totes per address, with an average of 160
totes per day for the 38 ZIP Codes included in the testing. Notice at
3. Through the market test, the Postal Service seeks to test and
develop a long-term scalable solution to expand Customized Delivery to
additional major metropolitan markets nationwide. Id.
The market test will begin on or shortly after October 24, 2014 and
will run for two years unless the Postal Services requests an extension
for an additional year, establishes Customized Delivery as a permanent
product, or terminates the market test early. Id. at 6.
Statutory authority. The Postal Service asserts that its proposal
satisfies the criteria of 39 U.S.C. 3641, which imposes certain
conditions on market tests of experimental products. The Postal Service
asserts that Customized Delivery is significantly different from all
products offered within the past two years because it has not offered a
customized delivery product during that time. Id. at 4; see 39 U.S.C.
3641(b)(1). It states that it does not expect Customized Delivery to
create an unfair or otherwise inappropriate competitive advantage for
the Postal Service or any mailer because prices offered by competitors
for grocery delivery typically fall within the price range that the
Postal Service intends to test. Id. at 5; see 39 U.S.C. 3641(b)(2). The
Postal Service classifies Customized Delivery as a competitive product
because it is part of the highly-competitive package services market
that does not fall under the Private Express statutes. Id. at 6; see 39
U.S.C. 3641(b)(3).
Exemption from revenue limitation. The Postal Service expects that
the total revenue received from the market test may exceed the $10
million revenue limitation for market tests in any fiscal year. Id. at
7; see 39 U.S.C. 3641(e)(1). It applies for an exemption of this
[[Page 58832]]
statutory requirement and states that it has taken steps to ensure that
anticipated revenues will not exceed $50 million in any year. Id.; see
39 U.S.C. 3642(e)(2). It asserts that the market test is likely to
benefit the public and meet an expected demand, as well as contribute
to the financial stability of the Postal Service. Id.
Data collection. The Postal Service asserts that it will monitor
market demand for Customized Delivery and will track the costs of
providing delivery of grocery and other pre-packaged goods during
customized delivery windows. Id. at 8. It has prepared a data
collection plan to track volumes of packages delivered via Customized
Delivery; total revenue generated; work hours, travel times, and other
cost data; and administrative and start-up cost data. Id.
III. Notice of Filing
The Commission establishes Docket No. MT2014-1 to consider matters
raised by the Notice, including the Postal Service's request for
exemption from the $10 million revenue limitation. It encourages
interested persons to review the Notice for more details. Interested
persons may submit comments on whether the Postal Service's filing is
consistent with the requirements of 39 U.S.C. 3641. Comments are due no
later than October 9, 2014. The filing can be accessed via the
Commission's Web site (http://www.prc.gov).
The Commission appoints Anne J. Siarnacki to serve as Public
Representative in this docket.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. MT2014-1 to consider
matters raised by the Notice.
2. Pursuant to 39 U.S.C. 505, Anne J. Siarnacki is appointed to
serve as an officer of the Commission (Public Representative) to
represent the interests of the general public in this proceeding.
3. Comments by interested persons are due no later than October 9,
2014.
4. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Ruth Ann Abrams,
Acting Secretary.
[FR Doc. 2014-23241 Filed 9-29-14; 8:45 am]
BILLING CODE 7710-FW-P