[Federal Register Volume 86, Number 73 (Monday, April 19, 2021)]
[Proposed Rules]
[Pages 20351-20353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07956]


=======================================================================
-----------------------------------------------------------------------

POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2021-6; Order No. 5864]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

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: June 1, 2021.

[[Page 20352]]


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 April 8, 2021, 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.
---------------------------------------------------------------------------

    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Three), April 8, 2021 (Petition).
---------------------------------------------------------------------------

II. Proposal Three

    Background. In FY 2015, a new price category was created for 
Marketing Mail Flats on 5-digit pallets.\2\ Accordingly, workshare 
discounts and percentage passthroughs for these ``direct'' 5 digit 
pallets (containing only Carrier Route or finer presorted bundles) have 
been calculated and reported separately from those of all other 
Standard Mail Carrier Route pieces since the FY 2015 Annual Compliance 
Report (ACR). Petition at 2-3.
---------------------------------------------------------------------------

    \2\ Docket No. R2015-4, Order on Revised Price Adjustments for 
Standard Mail, Periodicals, and Package Services Products and 
Related Mail Classification Changes, May 7, 2015, at 43 (Order No. 
2472).
---------------------------------------------------------------------------

    As of FY 2017, the Postal Service has utilized the following 
methodology to calculate dropship workshare discounts for Marketing 
Mail: \3\
---------------------------------------------------------------------------

    \3\ Docket No. RM2017-11, Order on Analytical Principles Used in 
Periodic Reporting (Proposal Seven), November 20, 2017 (Order No. 
4227).
[GRAPHIC] [TIFF OMITTED] TP19AP21.000

Petition at 5.
    This methodology calculates workshare discounts in the same units 
as are used in the calculation of avoided costs. Id. The Postal Service 
has reported workshare discounts in this fashion in ACR dockets from FY 
2017 to the present.\4\
---------------------------------------------------------------------------

    \4\ See Docket No. ACR2017, USPS-FY17-3, December 29, 2017, 
Excel file ``USPS-FY17-13.MKTG.xlsx,'' tab ``Flats and Parcels 
Dropship;'' Docket No. ACR2018, USPS-FY18-3, December 28, 2018, 
Excel file ``USPS-FY18-13.MKTG.xlsx,'' tab ``Flats and Parcels 
Dropship;'' Docket No. ACR2019, USPS-FY19-3, December 27, 2019, 
Excel file ``USPS-FY19-13.MKTG.xlsx,'' tab ``Flats and Parcels 
Dropship;'' Docket No. ACR2020, USPS-FY20-3, Excel file ``USPS-FY17-
13.MKTG.xlsx,'' tab ``Flats and Parcels Dropship.''
---------------------------------------------------------------------------

    Because this approach includes both the per-piece and per-pound 
elements of Marketing Mail Flats prices, the Postal Service states that 
percentage passthroughs for workshare discounts may be different for 
Carrier Route Flats on ``direct'' pallets and all Carrier Route Flats 
``solely because of differences in the mix of pieces above and below 
the breakpoint weight (currently 4 ounces).'' Petition at 8.
    Proposal. With Proposal Three, the Postal Service seeks to ``stop 
separately calculating and reporting workshare discounts and percentage 
passthroughs for dropship Marketing Mail Carrier Route Flats on 
`direct' pallets'' and instead ``calculate and report workshare 
discounts and percentage passthroughs for all dropship Marketing Mail 
Carrier Route Flats together.'' Id. at 9. The Postal Service asserts 
that this approach is intended to ``equalize the cost avoidance 
calculation across Marketing Mail density tiers (e.g., MADC, ADC, High 
Density, Saturation)'' as ``Carrier Route Flats is the only Marketing 
Mail product where the density discount is sub-divided based on 
preparation characteristics.'' Id. at 10. According to the Postal 
Service, the current methodology can produce anomalous results when 
``preparation characteristics are correlated with other 
characteristics. . .such as weight or entry.'' Id. It maintains that 
``[b]y combining volumes and calculating workshare discounts and 
percentage passthroughs for Marketing Mail Carrier Route flats as a 
single group, Proposal Three would reduce volatility in the calculation 
of percentage passthroughs for dropshipped Marketing Mail Carrier Route 
Flats.'' Id. The Postal Service states that such an approach would 
increase rationality and predictability in pricing, ``especially given 
the new regulations governing workshare discounts.'' Id. at 11.
    Impact. Under the Postal Service's proposed methodology, avoided 
costs and passthroughs associated with Marketing Mail Carrier Route 
Flats would be affected.

III. Notice and Comment

    The Commission establishes Docket No. RM2021-6 for consideration of 
matters raised by the Petition. More information on the Petition may be 
accessed via the Commission's website at http://www.prc.gov. Interested 
persons may submit comments on the Petition and Proposal Three no later 
than June 1, 2021. 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. RM2021-6 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 April 8, 2021.
    2. Comments by interested persons in this proceeding are due no 
later than June 1, 2021.
    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.


[[Page 20353]]


    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2021-07956 Filed 4-16-21; 8:45 am]
BILLING CODE 7710-FW-P