[Federal Register Volume 85, Number 120 (Monday, June 22, 2020)]
[Proposed Rules]
[Pages 37403-37405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13188]


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POSTAL REGULATORY COMMISSION

39 CFR part 3050

[Docket No. RM2020-10; Order No. 5548]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is acknowledging a recent filing requesting the 
Commission initiate a rulemaking proceeding to consider changes to 
analytical principles relating to periodic reports (Proposal Three). 
This document informs the public of the filing, invites public comment, 
and takes other administrative steps.

DATES: Comments are due: August 14, 2020.

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. Proposal Three
III. Notice and Comment
IV. Ordering Paragraphs

I. Introduction

    On June 11, 2020, the Postal Service filed a petition pursuant to 
39 CFR 3050.11 requesting that the Commission initiate a rulemaking 
proceeding to consider changes to analytical principles relating to 
periodic reports.\1\ The Petition identifies the proposed analytical 
changes filed in this docket as Proposal Three.
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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 (Proposal Three), June 11, 2020 (Petition). 
The Postal Service also filed a notice of filing of public and non-
public materials relating to Proposal Three. Notice of Filing of 
USPS-RM2020-10-1 and USPS-RM2020-10-NP1 and Application for 
Nonpublic Treatment, June 11, 2020.
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II. Proposal Three

    Background. The Postal Service's current In-Office Cost System 
(IOCS) design uses a multi-stage probability sample to randomly select 
craft employees, including city carriers, and then an interval of work 
time from the employee's tour for a ``snapshot'' of work activities in 
the work interval. Petition, Proposal Three at 1. The Postal Service 
states that moving data collectors to distant delivery units for 
carrier readings is costly so that in FY 2019, of over 250,000 
individual readings scheduled on city carriers, over 85 percent were 
conducted by telephone. Id. The Postal Service asserts that the 
availability of detailed clock ring data from the Time and Attendance 
Collection System (TACS) allows reshaping of the sampling design to 
improve sampling efficiency and data quality. Id. The Postal Service 
explains that In Docket No. RM2019-6, the Commission approved the 
modelling of all Special Purpose Route (SPR) carrier costs using TACS 
data and econometric equations.\2\
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    \2\ Id. at 1-2. Docket No. RM2019-6, Order on Analytical 
Principles Used in Periodic Reporting (Proposal One), January 14, 
2020 (Order No. 5405).
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    Proposal. The Postal Service states that Proposal Three would 
change IOCS system design for city carriers to a cluster sampling 
utilizing census data from TACS to enable on-site data collection at 
locations and times where and when city carriers are working on the 
premises. Petition, Proposal Three at 3. Rather than sampling 
individual employees, the proposed design would sample blocks of time 
and then subsample clusters of carriers working during those blocks of 
time. Id. The Postal Service asserts that this new design improves data 
quality with more on-site data rather than telephone readings and, 
thereby, improves data collection efficiency. Id. at 1.

[[Page 37404]]

    The Postal Service states that for in-morning tests (prior to 
1100), when carriers typically work on the premises of postal 
facilities, on-site data collection of the associated carriers using 
clustered on-site readings in sampled individual finance numbers 
(within cost ascertainment group (CAG) strata) would be used as 
described in the Proposal as Sampling Mode 1. Id. at 3. In the 
afternoon period (after 1100), when carriers are typically working on 
the street, clustered telephone readings with one-hour intervals of 
time would be sampled as described in the Proposal as Sampling Mode 2. 
Id.
    The Postal Service states that TACS data would be used to control 
totals for supervisor costs incurred on weekdays by employees whose 
base craft is carrier but clocked in as a supervisor craft. Id. at 4. 
The Postal Service asserts that this method was approved by the 
Commission in Order No. 5395 for Sundays and holidays.\3\ The Postal 
Service states that it will not conduct carrier readings on Sundays and 
holidays, but would expand the methodology to all days of the week. Id. 
It would use TACS data to provide control totals for carrier costs on 
Sundays and holidays described in Docket No. RM2018-5.\4\
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    \3\ Id. at 4 n.4. See Docket No. RM2019-12, Order on Analytical 
Principles Used in Periodic Reporting (Proposal Seven), January 6, 
2020 (Order No. 5395).
    \4\ Petition, Proposal Three at 4. See Docket No. RM2018-5, 
Order Approving In Part Proposal Two, January 8, 2019 (Order No. 
4972).
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    Each of the Sampling Modes is described briefly in the Proposal. 
Sampling Mode 1 is Morning On-site Tests. Petition, Proposal Three at 
3. The Postal Service states that all carriers working in the selected 
finance number are identified and software is used to randomly 
subsample up to six carriers. Id. at 4-5. Typically a reading is 
conducted on each of the six carriers every 30 minutes from the start 
of their workday until 1100. Id. at 5. Sampling Mode 2 is Afternoon 
Telephone Tests. Id. Telephone tests are scheduled for one-hour blocks 
of time between 1100 and 1900. Id. Software randomly selects 30 
carriers across a district and groups them by finance numbers. Id. 
There are larger CAG groups and smaller CAG groups to allow for 
oversampling of smaller CAGs. Id. The Postal Service states that a full 
description of the sampling modes is provided in Appendix A as part of 
Library Reference USPS-RM2020-10-1. Id. at 4.
    The Postal Service states that the sampling methodology utilizes 
probability proportional to size (PPS) sampling ``based on the accrued 
TACS workhours for carriers from two pay periods out of the prior 
quarter.'' Id. at 6. TACS workhours are grouped by CAG finance number, 
district and time of day and samples are on a quarterly basis. Id. 
Table 1 of the Proposal presents the Mode 1 quarterly sample size by 
CAG Group. Id. Table 2 shows the Mode 2 quarterly sample size by CAG 
Group. Id. at 7. Table 3 of the Proposal displays the proposed number 
of tests by each Sampling Mode and CAG Group and the proposed number of 
``non-stop'' readings (when a carrier is actively working in the tested 
finance number) expected from each mode. Id. at 8. The Postal Service 
would estimate costs for carriers using quarterly TACS data to weight 
the IOCS-Cluster sample readings. Id. The Postal Service states that 
equations for the estimations are provided in Appendix A of Library 
Reference USPS-RM2020-10-1. Id.
    The Postal Service states that with the approval of Proposal One in 
Docket No. RM2019-6, tallies are no longer used to distribute SPR 
activity costs. Id. at 9. It states that the current proposal will 
continue to sample SPR carriers, but will not use the readings to 
attribute any costs. Id. The Postal Service states that the change in 
sampling methods does not change the activity or mail-related questions 
of the data collectors; only administrative fields and back-end 
variables will be affected by the sampling methodology. Id.
    Rationale. The Postal Service states that there are numerous 
reasons it views the cost estimates from the new sampling systems as 
more accurate than the cost estimates from the current IOCS sampling 
system. Id. at 10. It offers the following reasons. Dedicated on-site 
data collectors can provide valuable information and validate data. Id. 
They are trained and may better implement IOCS data collection 
procedures with a primary objective to complete their tests compared to 
the current data collecting employees who also have other 
responsibilities. Id. On-site data collectors will have time for 
increased sampling with less disruption and delay of carriers and 
respondent clerks and supervisors. Id. at 10-11.
    Based on Table 4 of the Proposal, the Postal Service asserts that 
direct mailpiece costs using the allocation of direct mailpiece tallies 
when carriers were in the office increased 44 percent, and increased 
223 percent when carriers were in the parking lot. Id. at 10. It also 
asserts that in-office mixed mail costs decreased 24 percent and that 
parking lot mixed mail costs decreased 9 percent. Id. at 10-11.
    The Postal Service asserts that there will be a reduction in 
ambiguous route costs. Id. at 12. No costs except certain training 
costs will be allocated to unidentified routes; whereas, in Non-Cluster 
IOCS, numerous tallies are assigned to the ambiguous route 99 when 
carriers are not assigned to a specific route or not working on a valid 
route. Id. The Postal Service asserts Table 6 of the Proposal 
demonstrates that larger route categories appear stable between the two 
systems. Id. at 13.
    As its last rationale, the Postal Service states that use of the 
TACS system to weight tests by finance number or district means that 
the Postal Service no longer needs to absorb the inefficiency of simple 
random sampling. TACS allows sampling at all CAGs, and weights the 
results according to accrued hours and costs. Id.
    Impact. The Postal Service asserts that Table 7 of the Proposal 
demonstrates that the proposed IOCS-Cluster sampling would result in a 
49 percent increase in costs allocated based on direct tallies, where 
the carrier was handling a mailpiece and the mailpiece was able to be 
sampled. Id. at 13-14. It also asserts that costs decreased for mixed 
mail, training, support and administrative activities, all readings 
without an actual mailpiece. Id.
    The impacts at the Cost and Revenue Analysis (CRA) product level 
are indicated in Table 8 of the Proposal. Id. at 15. The Postal Service 
states that the material cost changes are seen in competitive products 
which increased overall, that First-Class Mail Single-Piece Letter 
costs decreased, accounting for most of the decrease in First-Class 
Mail, and that costs of other market dominant products increased. Id. 
at 14. Competitive product details were filed under seal in Library 
Reference USPS-RM2020-10-NP-1. Id.
    The Postal Service provides the results of the coefficients of 
variation (CVs) by CRA Subproducts in Table 9 of the Proposal. Id. at 
16-17. The Postal Service asserts that, using Quarter 2 FY 2020 data, 
the majority of CVs projected for IOCS-Cluster were lower than during 
FY 2019. Id. at 16. The Postal Service also asserts that the efficiency 
gains for street time outweigh the slight increase in CVs. Id. It 
claims that First-Class Mail experiences a slight increase in CVs due 
to a drop in allocated costs, but that the approval of modeling SPR 
costs in Docket No. RM2018-5 improved the CVs compared to the previous 
IOCS-Cluster filing. Id.

III. Notice and Comment

    The Commission establishes Docket No. RM2020-10 for consideration 
of matters raised by the Petition. More information on the Petition may 
be accessed via the Commission's website

[[Page 37405]]

at http://www.prc.gov. Interested persons may submit comments on the 
Petition and Proposal Three no later than August 14, 2020. Pursuant to 
39 U.S.C. 505, Katalin K. Clendenin is designated as an officer of the 
Commission (Public Representative) to represent the interests of the 
general public in this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. RM2020-10 for 
consideration of the matters raised by the Petition of the United 
States Postal Service for the Initiation of a Proceeding to Consider 
Proposed Changes in Analytical Principles (Proposal Three), filed June 
11, 2020.
    2. Comments by interested persons in this proceeding are due no 
later than August 14, 2020.\5\
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    \5\ The Commission reminds interested persons that its revised 
and reorganized Rules of Practice and Procedure became effective 
April 20, 2020, and should be used in filings with the Commission 
after April 20, 2020. The new rules are available on the 
Commission's website and can be found in Order No. 5407. Docket No. 
RM2019-13, Order Reorganizing Commission Regulations and Amending 
Rules of Practice, January 16, 2020 (Order No. 5407).
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    3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. 
Clendenin to serve as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this docket.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2020-13188 Filed 6-19-20; 8:45 am]
BILLING CODE 7710-FW-P