[Federal Register Volume 84, Number 92 (Monday, May 13, 2019)]
[Rules and Regulations]
[Pages 20806-20808]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-09779]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2018-1; Order No. 5086]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission adopts final rules that require the Postal 
Service to provide information about cost and service issues affecting 
flats-shaped mail (flats). The Commission intends to analyze this 
information over time to identify trends and measurable goals that will 
lead to the development of a plan to improve these cost and service 
issues.

DATES: Effective June 12, 2019.

ADDRESSES: For additional information, Order No. 5086 can be accessed 
electronically through the Commission's website at https://www.prc.gov.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Background
II. Basis and Purpose of Final Rules
III. Final Rules

I. Background

    On March 1, 2019, the Commission proposed specific reporting 
requirements to facilitate measuring and tracking cost and service 
performance issues related to flats. The Commission adopts final rules 
on these requirements, with minor revisions to the proposed rules as 
described below.

II. Basis and Purpose of Final Rules

    The Commission initiated this proceeding to explore potential 
enhancements to the Postal Service's data systems and to facilitate the 
development of consistent reporting requirements to measure, track, and 
report cost and service performance issues related to flats. With the 
adoption of these rules, the Postal Service will be required to 
annually file data at the national, and facility level data (when 
specified). These reporting requirements are designed to provide 
sufficient information to improve transparency into the cost and 
service issues associated with flats. In addition, the reporting 
requirements will increase the accountability of the Postal Service 
related to operational initiatives related to flats.
    The final rules incorporate many of the suggestions identified by 
commenters, as well as additional clarifying language added by the 
Commission; however, the substance of the rules remains unchanged.
    The Commission revises paragraphs (b) through (g) to extend the 
filing date to 95 days after the end of the fiscal year.
    Paragraph (b) of proposed Sec.  3050.50 is modified in several 
ways. First, in Sec.  3050.50(b)(2), the Commission removes the word 
``estimate,'' as the Commission expects the Postal Service to use the 
actual unit attributable costs for each product. Second, in Sec.  
3050.50(b)(4), the Commission clarifies that the comparison should be 
conducted as the percentage change in unit attributable costs, and the 
Commission makes additional minor clarifications to the language. 
Third, in Sec.  3050.50(b)(5), the Commission removes the word 
``current'' and adds the word ``changes'' after ``mail mix'' for 
clarity. The Commission expands the reporting requirement for Sec.  
3050.50(b)(5) to provide data from FY 2013 to present. In addition, the 
Commission clarifies in Sec.  3050.50(b)(5)(ii) through (iii) that the 
calculation should be for combined flat-shaped products rather than 
each flat-shaped product. Fourth, the Commission adds a requirement in 
Sec.  3050.50(b)(5) that the Postal Service explain the methodology 
used to calculate mail mix changes. Finally, the Commission modifies 
Sec.  3050.50(b)(6) and (7) to make clear that that the Postal Service 
must identify the drivers of changes in the result of the analyses.
    Paragraph (e) of proposed Sec.  3050.50 is clarified, as suggested 
by the Postal Service, to indicate the appropriate five years of 
historical data that the Commission is requesting. In addition, 
paragraph (e) of proposed Sec.  3050.50 is supplemented with a rule for 
instances where a specific report name may change, and additional 
reporting required when a report name change occurs.
    Paragraph (f) of proposed Sec.  3050.50 is modified to ensure that 
the Postal Service reports on operational changes and/or initiatives 
that will have any impact on flat-shaped mail operations, flat-shaped 
mail costs, and/or flat-shaped mail service.
    Paragraph (g) of proposed Sec.  3050.50 is modified to ensure that 
the Postal Service reports on data enhancements that will have any 
impact on measuring, tracking, and/or reporting on flat-shaped mail 
costs, operations, and/or service.
    Finally, the Commission incorporates the majority of the suggested 
formatting edits to the rules provided by the Public Representative in 
Attachment A to her comments.

III. Final Rules

    The Commission places the reporting requirements for flat-shaped 
mail products in a new section in 39 CFR part 3050.

List of Subjects for 39 CFR Part 3050

    Administrative practice and procedure, Postal Service.

    For the reasons stated in the preamble, the Commission amends 
chapter III of title 39 of the Code of Federal Regulations as follows:

PART 3050--PERIODIC REPORTING

0
1. The authority citation for part 3050 continues to read as follows:

    Authority:  39 U.S.C. 503, 3651, 3652, 3653.


0
2. Add Sec.  3050.50 to read as follows:


Sec.  3050.50   Information pertaining to cost and service for flat-
shaped mail.

    (a) The reports in paragraphs (b) through (f) of this section shall 
be filed with the Commission at the times indicated.
    (b) Within 95 days after the end of each fiscal year, the Postal 
Service shall file a financial report that analyzes data from the 
fiscal year for all mail products that consist of more than 80 percent 
flat-shaped mail. At a minimum, the report shall include:
    (1) Volume and shape workpapers that identify products that contain 
more than 80 percent flat-shaped mail (flat-shaped products).
    (2) Unit attributable cost workpapers for each flat-shaped product 
that is disaggregated into the following cost categories: Mail 
processing unit cost, delivery unit cost, vehicle service driver unit 
cost, purchased transportation unit cost, window service unit cost, and 
other unit cost.
    (3) A narrative that explains the methodology used to calculate the 
unit attributable cost categories described in paragraph (b)(2) of this 
section.
    (4) A narrative supported by workpapers that identifies flat-shaped 
products for which the percentage change in average unit attributable 
cost was greater than the percentage change in total market dominant 
average unit attributable cost for the same fiscal year. The narrative 
must include

[[Page 20807]]

identification of cost categories that are driving above average change 
in unit attributable cost for flat-shaped product and a specific plan 
to reduce unit attributable cost for the identified flat-shaped 
product.
    (5) An analysis of volume trends, and mail mix changes for flat-
shaped products from FY 2013 to present, which includes, at a minimum, 
a comparison of:
    (i) The aggregate unit attributable costs for combined flat-shaped 
products for each fiscal year,
    (ii) The calculated estimate of aggregate unit attributable costs 
for combined flat-shaped products for each fiscal year, using FY 2013 
fiscal year's volume distribution,
    (iii) A narrative that identifies drivers of changes in volume 
trends and mail mix, and
    (iv) A narrative that explains the methodology used to calculate 
the estimated unit attributable cost described in paragraph (b)(5)(ii) 
of this section.
    (6) An analysis of the Flat Sequencing System (FSS), which 
includes, at a minimum, the percent of flat-shaped mail destinating in 
a FSS zone that were not finalized on FSS equipment, the cost of 
processing flat-shaped mail on the FSS, and the delivery point sequence 
(DPS) percentage of FSS mail. In addition, a narrative that identifies 
drivers of changes in the results of the analysis between fiscal years.
    (7) A manual processing analysis, which includes, at a minimum, the 
cost of manually processing flat-shaped mail, the percent of flat-
shaped mail that was manually processed, and the percent of flat-shaped 
mail that was entered at automation prices. In addition, a narrative 
that identifies drivers of changes in the results of the analysis 
between fiscal years.
    (8) An estimate, with supporting workpapers, of the cost impact of 
bundle processing on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the cost impact 
of bundle processing on flat-shaped products.
    (9) An estimate, with supporting workpapers, of the cost impact of 
low productivity on automated equipment on flat-shaped products for the 
fiscal year. If no estimate is available, provide a timeline to 
estimate the cost impact of low productivity on automated equipment on 
flat-shaped products.
    (10) An estimate, with supporting workpapers, of the cost impact of 
manual processing on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the cost impact 
of manual processing on flat-shaped products.
    (11) An estimate, with supporting workpapers, of the cost impact of 
allied operations on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the cost impact 
of allied operations on flat-shaped products.
    (12) An estimate, with supporting workpapers, of the cost impact of 
transportation on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the cost impact 
of transportation on flat-shaped products.
    (13) An estimate, with supporting workpapers, of the cost impact of 
last mile/delivery on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the cost impact 
of last mile/delivery on flat-shaped products.
    (c) Within 95 days after the end of each fiscal year, the Postal 
Service shall file a service report that analyzes data from the fiscal 
year for all mail products that consist of more than 80 percent flat-
shaped mail. At a minimum, the analysis must include:
    (1) Service performance scores for all flat-shaped products.
    (2) An estimate, with supporting workpapers, of the service impact 
of bundle processing on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the service 
impact of bundle processing on flat-shaped products.
    (3) An estimate, with supporting workpapers, of the service impact 
of low productivity on automated equipment on flat-shaped products for 
the fiscal year. If no estimate is available, provide a timeline to 
estimate the service impact of low productivity on automated equipment 
on flat-shaped products.
    (4) An estimate, with supporting workpapers, of the service impact 
of manual processing on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the service 
impact of manual processing on flat-shaped products.
    (5) An estimate, with supporting workpapers, of the service impact 
of allied operations on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the service 
impact of allied operations on flat-shaped products.
    (6) An estimate, with supporting workpapers, of the service impact 
of transportation on flat-shaped products for the fiscal year. If no 
estimate is available, provide a timeline to estimate the service 
impact of transportation on flat-shaped products.
    (7) An estimate, with supporting workpapers, of the service impact 
of last mile/delivery on flat-shaped products for the fiscal year. If 
no estimate is available, provide a timeline to estimate the service 
impact of last mile/delivery on flat-shaped products.
    (d) Within 95 days after the end of each fiscal year, the Postal 
Service shall file an analysis of costs by operationally relevant 
grouping from FY 2013 to present.
    (1) The report shall utilize fiscal year data filed in accordance 
with Sec.  3050.22, and Sec.  3050.28(c) and (d) and any other data 
necessary to complete the analysis.
    (2) The report shall also include a narrative that explains the 
methodology used to calculate costs by operationally relevant grouping.
    (e) Within 95 days after the end of each fiscal year, the Postal 
Service shall file the following reports that include data by both 
quarter and fiscal year, as well as at the national level and at the 
facility level unless otherwise specified. The reports shall include, 
at a minimum, five years of quarterly historical fiscal year data 
covering the reporting year and the previous four fiscal years.
    (1) Bundle Breakage Visibility Reports which include, at a minimum, 
number of bundles processed, number of bundles processed by class, 
product, facility, and machine type, number of broken bundles; and 
number of broken bundles by class, product, facility, and machine type.
    (2) Mail Processing Variance Reports, which include, at a minimum, 
for each machine type that process flat-shaped mail: Category, plant/
facility, volume, actual workhours, earned workhours (target hours), 
productivity, variance, and percent achieved, and target 
productivities, including narrative that explains methodology used to 
develop target.
    (3) eFlash Report, which includes, at a minimum manual letter and 
flats volume, manual letter and flats workhours, manual letter and 
flats cost analysis, manual letter and flats handling time, and manual 
letter and flats handling cost per piece.
    (4) Work in Process metrics, which include, at a minimum, 
measurement of: unload scan to bundle sorter scan, unload scan to tray 
mechanization scan, bundle sorter scan to mail processing equipment 
piece scan, tray mechanization scan to next automation scan, and unload 
scan to first automation scan.
    (5) First-Class Mail Root Cause Point Impact Report, which 
includes, at a minimum, root cause, shape, service standard, point 
impact, rank, results

[[Page 20808]]

attributed to air transit Automated Area Distribution Center (AADC)/
Area Distribution Center (ADC) processing delays, and results 
attributed to surface transit AADC/ADC processing delays.
    (6) SVWeb Report, which includes, at a minimum, on-time departure 
percentage, on-time arrival percentage, space utilization type by 
container type, average load percentage, total number of late 
containers, misrouted containers based on unload scans at unexpected 
site, National Performance Assessment (NPA) goals, goal achievement, 
the total score for six required scans, trips on time, space 
utilization targets, and comparison of fiscal year space utilization to 
targets.
    (7) Last Mile Impact Report, which includes, at a minimum, overall 
on-time score, on-time score at last processing, and last mile impact 
for all flat-shaped products at each service standard.
    (8) For each report listed in paragraphs (e)(1) through (7) of this 
section, the Postal Service shall provide a narrative that describes 
any changes made to underlying data systems during the fiscal year that 
impact the methodology used to produce the report.
    (9) For each report listed in paragraphs (e)(1) through (7) of this 
section, the Postal Service shall provide a narrative that discusses 
trends, changes, and reasons for any changes in data within the report.
    (10) If any of the reports listed in paragraphs (e)(1) through (7) 
of this section no longer exist by that name in any year, the Postal 
Service must provide the closest successor to that report to provide 
the required information. The Postal Service must identify all 
differences between the original report and the successor report, and 
provide a narrative that explains the impact of using the successor 
report opposed to the original report.
    (f) Within 95 days after the end of each fiscal year, the Postal 
Service shall file a report that identifies all national operational 
changes and/or initiatives that occurred during the fiscal year related 
to flat-shaped mail and all planned national operational changes and/or 
initiatives for the next fiscal year related to flat-shaped mail. The 
operational changes and/or initiatives should impact operations related 
to flat-shaped mail, impact the cost of flat-shaped mail, and/or impact 
the service of flat-shaped mail.
    (1) The report shall identify data from paragraphs (b), (c), (d), 
and/or (e) of this section that will be impacted by each operational 
change/initiative.
    (2) The report shall also include an estimate, with supporting 
workpapers, of the impact of each operational change/initiative on the 
data selected in paragraph (f)(1) of this section.
    (g) Within 95 days after the end of each fiscal year, the Postal 
Service shall file a report that identifies all data enhancements that 
occurred during the fiscal year related to data systems that affect 
flat-shaped mail. The data enhancements identified should have an 
impact on measuring, tracking, and/or reporting on flat-shaped mail 
cost, operations, and/or service.

    By the Commission.
Stacy L. Ruble,
Secretary.
[FR Doc. 2019-09779 Filed 5-10-19; 8:45 am]
 BILLING CODE 7710-FW-P