[Federal Register Volume 88, Number 185 (Tuesday, September 26, 2023)]
[Proposed Rules]
[Pages 65927-65928]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20630]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2023-11; Order No. 6692]


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 Five). 
This document informs the public of the filing, invites public comment, 
and takes other administrative steps.

DATES: Comments are due: October 20, 2023.

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

I. Introduction

    On September 15, 2023, 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), September 15, 2023 (Petition).
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II. Proposal Six

    Background. Proposal Six relates to modifications to the mail 
processing and destination entry cost models for letter-shaped USPS 
Marketing Mail pieces to account for recent price structure changes. 
Petition, Proposal Six at 1. The cost models were last presented in 
Docket No. ACR2022, Library References USPS-FY22-10 and USPS-FY22-13, 
respectively. Id. If approved, the Postal Service intends to 
incorporate the requested modifications in the preparation of its the 
Fiscal Year (FY) 2023 Annual Compliance Review (ACR) and apply new cost 
avoidances figures in its ``July 2024 Market Dominant price change.'' 
Id.
    As part of Docket No. R2023-2, the Commission approved two new 
workshare discounts for USPS Marketing Mail letter-shaped pieces 
prepared on sectional center facility (SCF) pallets: (1) USPS Marketing 
Mail Automation and Non-automation letters; and (2) USPS Marketing Mail 
Carrier Route, High Density, High Density Plus and Saturation letters. 
Id. at 1-2.
    Proposal. Proposal Six presents four modifications to support the 
new discounts: (1) the addition of tray sorting cost data to Library 
Reference USPS-FY22-10, (2) the incorporation of a standalone tray 
sorting cost avoidance estimate into Library Reference USPS-FY22-10, 
(3) the reclassification of tray sorting cost pools in Library 
Reference USPS-FY22-10, and (4) the removal of tray sorting costs from 
Library Reference USPS-FY22-13. Id. at 2. The first three modifications 
are made to the mail processing cost model and the fourth modification 
is made to the destination entry cost model. Id. The Postal Service 
provided a modified mail processing cost model in the Excel file 
``USPS-

[[Page 65928]]

FY22-10.MM.PROP.Six'' attached to the Petition. Id.
    Rationale and impact. As it relates to the modification to tray 
sorting data, the Postal Service explains that the data cannot be 
estimated in the current version of the cost model; therefore, 
additional cost input data have been incorporated into the mail 
processing cost model to estimate these costs. Id. at 2-3.
    As it relates to the modification to standalone cost avoidance 
estimates,\2\ the Postal Service notes that cost model input data, 
including the new data described above, are used to estimate avoided 
tray sorting costs and that estimate is included in the mail processing 
cost model because SCF palletization is a form of presorting. Id. at 3. 
The Postal Service explains that ``[t]his methodology is used because 
detailed letter tray sorting data are not readily available in postal 
data collection systems,'' preventing tray sorting costs from being 
incorporated into the mail flow models and cost worksheets for all the 
letter price categories. Id. at 3-4. The Postal Service also presents 
an alternative to the methodology described above, by providing an 
estimation of the per-piece costs incurred in one outgoing tray sorting 
operation. Id. at 4.
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    \2\ The Postal Service explains that the term ``standalone'' 
means the cost avoidance estimate is not used to develop Cost and 
Revenue Analysis (CRA) adjustment factors and does not affect the 
magnitude of the CRA proportional adjustment factor and that factor 
is not applied to the cost avoidance estimate. Id. at 3.
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    As it relates to the modification for tray sorting cost pools, the 
Postal Service seeks to reclassify the ``MODS 1TRAYSRT'' cost pool and 
the ``NDC TRAYSORT'' cost pool as ``worksharing-related fixed.'' Id. at 
4-5. Although the Commission previously classified these cost pools as 
``proportional,'' the Postal Service explains that the cost pools 
should be ``worksharing-related fixed because SCF palletization results 
in some tray sorting costs being avoided'' and the modification would 
prevent tray sorting costs from effecting both the containerization and 
presort costs estimates.\3\
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    \3\ Id.; see Docket No. R2006-1, Opinion and Recommended 
Decision Volume 1, March 14, 2007, at ]] 5159-5161.
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    Finally, as it relates to the modification to destination entry 
cost model tray costs, the Postal Service explains that, because a 
standalone tray sorting cost avoidance estimate will now be included in 
the letters mail processing cost model, letter tray sorting costs 
should be removed from the USPS Marketing Mail destination entry cost 
model. Petition, Proposal Six at 6. The Postal Service notes that it 
would prevent tray sorting costs from affecting both the presort and 
destination entry cost avoidance estimates. Id.
    The impacts of these modifications are presented in Tables 1 
through 3 of Proposal Six as well as Excel file 
``IMPACT.PROP.SIX.xlsx.'' See id. at 6-9.

III. Notice and Comment

    The Commission establishes Docket No. RM2023-11 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 Six 
no later than October 20, 2023. 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. RM2023-11 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 
September 15, 2023.
    2. Comments by interested persons in this proceeding are due no 
later than October 20, 2023.
    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. 2023-20630 Filed 9-25-23; 8:45 am]
BILLING CODE 7710-FW-P