[Federal Register Volume 87, Number 156 (Monday, August 15, 2022)]
[Proposed Rules]
[Pages 50027-50028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17417]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3030

[Docket No. RM2022-12; Order No. 6244]


Application for Waiver of Workshare Discount

AGENCY: Postal Regulatory Commission.

ACTION: Application for waiver; comment request.

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SUMMARY: The Commission is acknowledging a Postal Service application 
for waiver pursuant to Commission regulations as it relates to a 
workshare discount. This document informs the public of the filing, 
invites public comment, and takes other administrative steps.

DATES: Comments are due: August 16, 2022.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at https://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. Application for Waiver
IV. Notice and Comment
V. Ordering Paragraphs

I. Introduction

    On August 8, 2022, the Postal Service filed an application for 
waiver pursuant to 39 CFR 3030.286 requesting that the Commission waive 
the applicability of 39 CFR 3030.283 for the workshare discount 
associated with USPS Marketing Mail Carrier Route Flats dropshipped at 
the Destination Delivery Unit (DDU) in the next rate adjustment 
filing.\1\
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    \1\ United States Postal Service Application for a Waiver Under 
39 CFR 3030.286, August 8, 2022 (Application). The Postal Service's 
Application is accompanied by a Statement in Support of Waiver 
Application (Supporting Statement).
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II. Background

    Pursuant to 39 CFR 3030.283, a workshare discount proposed by the 
Postal Service in any rate adjustment filing that exceeds the cost 
avoided must either be associated with a new postal service, a change 
to an existing postal service, or a new workshare initiative; be at 
least a 20 percent decrease from the existing workshare discount; or 
provided in connection with a subclass of mail, consisting exclusively 
of mail matter of educational, cultural, scientific, or informational 
value (39 U.S.C. 3622(e)(2)(C)) and is in compliance with 39 CFR 
3030.285(c).\2\
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    \2\ See 39 CFR 3030.283. The relationship between workshare 
discounts and avoided costs is usually expressed as a percentage 
called a passthrough, which is calculated by dividing the discount 
by the avoided cost. Workshare discounts with passthroughs above 100 
percent are considered excessive workshare discounts.
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    If the proposed workshare discount does not comply with the 
limitations of 39 CFR 3030.283, the Postal Service must file an 
application for waiver pursuant to 39 CFR 3030.286. See 39 CFR 
3030.283(d); 39 CFR 3030.286. The Postal Service's waiver application 
must be supported by a preponderance of the evidence and demonstrate 
that a waiver from the limitations imposed by 39 CFR 3030.283 should be 
granted. See 39 CFR 3030.286(b). The Postal Service must include the 
grounds for a waiver, including all relevant supporting analysis; the 
length of time the waiver will be necessary; for each subsequent rate 
adjustment filing planned to occur during the length of time for which 
a waiver is sought, a representation of the proposed minimum amount of 
the change to the workshare discount; and any other relevant 
information. See also 39 CFR 3030.286(c)(1) through (3) and (8). 
Grounds for waiver for an excessive workshare discount and the required 
accompanying information are set forth in 39 CFR 3030.286(c)(4) through 
(7).\3\
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    \3\ Grounds for waiver for an excessive cost workshare discount 
relate to rate shock; the impediment of efficient postal operations; 
a loss of volume in the affected category of mail and a reduction in 
the aggregate contribution to the Postal Service's institutional 
costs from the mail that is subject to the discount; and non-
compensatory products. See 39 CFR 3030.286(c)(4) through (7).
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III. Application for Waiver

    The Postal Service requests a waiver of 39 CFR 3030.283 for the 
workshare discount associated with USPS Marketing Mail Carrier Route 
Flats dropshipped at the DDU in the next rate adjustment proceeding to 
be filed no sooner than October 7, 2022. Application at 1. The Postal 
Service states that the methodology used in calculating passthroughs 
for USPS Marketing Mail flat-shaped pieces results in volatile 
passthrough percentages, making compliance with 39 CFR 3030.283 
difficult. Application, Supporting Statement at 3. It further states 
that, to overcome this volatility and comply with 39 CFR 3030.283, 
would require irrational pricing. Id. at 6-7. The Postal Service 
illustrates this issue in a worksheet that accompanies the Supporting 
Statement. Id. at 7; see also Excel file ``RM2022-12 Waiver.xlsx.''
    The Postal Service maintains that its waiver request should be 
granted for three reasons. First, the Postal Service intends to ``seek 
approval of prices that will minimize non-compliance and its 
consequences'' and would be limited to the passthrough for USPS 
Marketing Mail Carrier Route Flats pieces dropshipped at the DDU. 
Application, Supporting Statement at 8. Furthermore, it states that, 
because the volume of these pieces is relatively low, ``the cost of [ ] 
non-compliance is only approximately, $200,000. . .and that amount will 
inure to the benefit of the mailers in any event.'' Id. Second, the 
Postal Service maintains that compliance with 39 CFR 3030.283 would 
require irrational pricing due to ``happenstance,'' and not ``the 
result of any failure of effort, planning, or implementation by the 
Postal Service.'' Id. at 8-9. Finally, the Postal Service believes 
additional waivers of this nature for USPS Marketing Mail Flats will 
not be necessary beyond the next rate adjustment proceeding. Id. at 9. 
This is because the Postal Service is ``investigating structural 
changes in [the] pricing of flat- and parcel-shaped pieces leading to a 
simplified methodology in the calculation of passthroughs.'' Id.

[[Page 50028]]

    For these reasons, the Postal Service seeks to set the workshare 
discount associated with USPS Marketing Mail Carrier Route Flats pieces 
dropshipped at the DDU above the avoided costs such that the workshare 
discount's passthrough is 105.0 percent. Id. at 8.

IV. Notice and Comment

    The Commission establishes Docket No. RM2022-12 for consideration 
of matters raised by the Application. More information on the 
Application may be accessed via the Commission's website at https://www.prc.gov. Interested persons may submit comments on the Application 
no later than August 16, 2022. 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.

V. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. RM2022-12 for 
consideration of the matters raised by the United States Postal Service 
Application for a Waiver Under 39 CFR 3030.286, filed August 8, 2022.
    2. Comments by interested persons in this proceeding are due no 
later than August 16, 2022.
    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.
Jennie L. Jbara,
Alternate Certifying Officer.
[FR Doc. 2022-17417 Filed 8-12-22; 8:45 am]
BILLING CODE 7710-FW-P