[Federal Register Volume 87, Number 171 (Tuesday, September 6, 2022)]
[Proposed Rules]
[Pages 54413-54414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19131]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 87, No. 171 / Tuesday, September 6, 2022 / 
Proposed Rules  

[[Page 54413]]



POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2022-13; Order No. 6262]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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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: October 7, 2022.

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 Six
III. Notice and Comment
IV. Ordering Paragraphs
V. Ordering Paragraphs

I. Introduction

    On August 26, 2022, 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 Six.
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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 Six), August 26, 2022 (Petition). 
The Postal Service also filed a notice of filing of non-public 
material relating to Proposal Six, as well as public and non-public 
materials supporting the proposal. See Notice of Filing of USPS-
RM2022-13-1 and USPS-RM2022-13-NP1 and Application for Nonpublic 
Treatment, August 26, 2022.
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II. Proposal Six

    Background. Proposal Six relates to the distribution of peak season 
highway transportation costs. See Petition, Proposal Six at 1. In 
particular, the Postal Service proposes to include additional sampling 
of peak season trips within the Transportation Cost System (TRACS) ``to 
develop a separate distribution key for the costs in peak season 
highway accounts.'' Id.
    According to the Postal Service, based on the assumption that 
``peak season trips have a similar mail mix to regular transportation 
for the same quarter,'' peak season costs have been ``distributed 
similarly to the regular contract costs calculated by quarter.'' Id. at 
8. Thus, the distribution keys associated with the costs of peak season 
highway contracts are based upon TRACS data for regular contracts (and 
not Emergency, Exceptional, or Christmas contracts). See id. at 1. 
These data are calculated quarterly using a process that involves 
developing a sampling frame for each quarter. See id. The peak season 
falls in Quarter One of the fiscal year (FY), and its sampling frame is 
designed in early September, ``using the most recent operations data'' 
including operations data from the last weeks of August. Id. at 2. 
However, peak contract highway trips do not run in August or September; 
in fact, they may not be finalized completely until approximately mid-
November (shortly before the beginning of the peak season). See id. As 
a result, they may not be sampled under the current methodology of 
sampling highway transportation cost data.\2\
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    \2\ See id.; see also Docket No. RM2021-1, Order on Analytical 
Principles Used in Periodic Reporting (Proposal Seven), October 6, 
2021, at 36 (Order No. 5999) (``[T]he TRACS database . . . still 
does not include Christmas contracts in the sampling frame.'').
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    The Postal Service reports that it studied peak season sampling in 
the peak seasons of FYs 2021 and 2022. Id. at 3-4. For FY 2021, 
although the Postal Service developed a peak season frame ``using a 
non-finalized list of peak trips from operations obtained in 
September'' and merging this list with actual trip data from the peak 
season of FY 2020, the Postal Service did not obtain ``enough useful 
data to develop a distribution key.'' Id. at 3. For FY 2022, the Postal 
Service reports that it conducted a study in November and December 2021 
that produced ``meaningful data, allowing a distribution key to be 
developed.'' Id. at 4. According to the Postal Service, ``the only 
differences in the methodology, compared with the regular TRACS 
sampling[,]'' are in developing the frame and in scheduling the peak 
TRACS tests in November instead of September. Id.
    Proposal. The Postal Service's proposal seeks to use additional 
sampling of peak season trips within TRACS to develop a separate 
distribution key for the costs in peak season highway accounts. See 
Petition. The Postal Service would use its new system (instead of 
regular contract data) to determine the distribution of peak costs. Id. 
Proposal Six at 3. More specifically, for the fiscal year (FY) 2022 
Annual Compliance Report (ACR), the Postal Service proposes to 
implement the FY 2022 peak distribution key. See id. at 6. Further, for 
future years' annual compliance reports, the Postal Service recommends 
the adoption of the following changes: increasing the number of peak 
tests to 300 (see id. at 5); modifying the frame design process to 
include all trips that fall under the classification of peak/Christmas 
accounts within the Transportation Contract Support System (TCSS); and 
using late October and early November trip data. See id. at 6.
    Further, the Postal Service proposes to ``create a separate peak 
season cost pool apart from the regular highway cost pools.'' Id. at 7. 
Under this aspect of Proposal Six, ``[t]he new peak season 
variabilities that were approved [in] Docket [No.] RM2021-1 would be 
applied to these costs, and then they would be distributed based on the 
peak distribution key.'' Id. However, the Postal Service does not 
propose changing the distribution of such costs outside of the peak 
period. See id.
    Rationale and impact. The Postal Service asserts that adopting 
Proposal Six would allow peak contract costs to be estimated more 
accurately. See id. at 8-9. As noted, according to the Postal Service, 
the current approach of relying on regular contract costs calculated by 
quarter is founded on ``the assumption

[[Page 54414]]

that peak season trips have a similar mail mix to regular 
transportation for the same quarter.'' Id. at 8. However, the Postal 
Service advises that this is not necessarily so because ``peak season 
transportation is used to supplement the regular transportation network 
during peak season[.]'' Id. Thus, the Postal Service asserts that 
``sampling of peak season trips provides visibility into the peak 
season trip mail mix'' and offers ``a more accurate estimation of the 
cost distribution of peak contract costs.'' Id. at 8-9.
    According to the Postal Service, for FY 2022 Quarter One, there 
were $356 million of accrued costs relating to peak season highway 
contracts, of which $346 million were volume variable. Id. at 9. If 
Proposal Six is implemented, the Postal Service advises that ``these 
costs would be shifted out of the regular transportation cost pools and 
into a separate peak season cost pool.'' Id. Further, the Postal 
Service states that ``[t]he costs would mainly shift to competitive 
domestic products'' as detailed in Table 2 (in public and non-public 
versions). Id.

III. Notice and Comment

    The Commission establishes Docket No. RM2022-13 for consideration 
of matters raised by the Petition. More information on the Petition may 
be accessed via the Commission's website at https://www.prc.gov. 
Interested persons may submit comments on the Petition and Proposal Six 
no later than October 7, 2022. Pursuant to 39 U.S.C. 505, Manon A. 
Boudreault 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. RM2022-13 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 Six), filed August 
26, 2022.
    2. Comments by interested persons in this proceeding are due no 
later than October 7, 2022.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Manon A. 
Boudreault 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. 2022-19131 Filed 9-2-22; 8:45 am]
BILLING CODE 7710-FW-P