[Federal Register Volume 89, Number 75 (Wednesday, April 17, 2024)]
[Notices]
[Pages 27468-27470]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-08162]


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POSTAL REGULATORY COMMISSION

[Docket No. MC2024-224; Order No. 7041]


Mail Classification Schedule

AGENCY: Postal Regulatory Commission.

ACTION: Notice.

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SUMMARY: The Commission is acknowledging a recent Postal Service filing 
concerning size limitation changes to the Mail Classification Schedule 
related to international letter-post rolls and accompanying material 
changes to product descriptions for certain other products that include 
international letter-post rolls. This document informs the public of 
the filing, invites public comment, and takes other administrative 
steps.

DATES: Comments are due: May 9, 2024.

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. Contents of Filing
III. Commission Action
IV. Ordering Paragraphs

I. Introduction

    On April 9, 2024, pursuant to 39 U.S.C. 3682 and 39 CFR 3040.212 
and 3040.180, the Postal Service filed a notice of proposed changes in 
the Mail Classification Schedule (MCS) concerning the size limitations 
for international letter-post rolls for certain products with rates of 
general applicability, as well as accompanying material changes to 
product descriptions for certain other products that include 
international letter-post rolls, effective July 14, 2024.\1\
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    \1\ Notice of the United States Postal Service of Changes in 
Size Limitations and Accompanying Material Changes to Product 
Descriptions Concerning the Minimum Size Limits for International 
Letter-Post Rolls, and Notice of Filing Materials Under Seal, April 
9, 2024, at 1-2 (Notice).
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II. Contents of Filing

    Specifically, the Postal Service proposes changes in the minimum 
size limits for international letter-post rolls for the following 
products with rates of general applicability in relevant MCS sections:

 2320.2 International Priority Airmail (IPA)
 2325.2 International Surface Air Lift (ISAL)
 2335.2 Outbound Single-Piece First-Class Package International 
Service (FCPIS)

Id. at 1.
    In addition, the Postal Service proposes material changes to 
product descriptions for the following products with rates not of 
general applicability

[[Page 27469]]

that include international letter-post rolls in relevant MCS sections:

 2340.2 Inbound Letter Post Small Packets and Bulky Letters
 2510.3.2 Global Expedited Package Service (GEPS) Contracts
 2510.5.2 Global Bulk Economy (GBE) Contracts
 2510.6.2 Global Plus Contracts
 2510.7.2 Global Reseller Expedited Package Contracts
 2510.8.2 Global Expedited Package Services (GEPS)--Non-
Published Rates

Id. at 2.
    The Postal Service states that the Notice satisfies the 
requirements set forth in 39 U.S.C. 3682 and 39 CFR 3040.212 and 
3040.180. See id. at 2-3. First, the Notice is filed at least 30 days 
prior to the intended effective date of July 14, 2024, in accordance 
with 39 CFR 3040.180(a). Id. at 3. Second, the Postal Service submits 
Attachment 1 with the Notice, which contains the proposed material 
changes to the MCS sections listed above in legislative format, in 
accordance with 39 CFR 3040.180(b)(1). Id. Third, the Postal Service 
provides the following supporting justification in accordance with 39 
CFR 3040.180(b)(2). See id. at 3-7.
    As rationale for the proposed changes, the Postal Service states 
that the proposed changes would result in the MCS more accurately 
reflecting the Postal Service's current offerings by aligning the MCS 
with Universal Postal Union (UPU) Conventions Regulations Article 17-
104. Id. at 3. The Postal Service explains that in May 2023, the UPU 
Postal Operations Council adopted new minimum dimensions for 
international letter-post rolls, and the amended UPU Conventions 
Regulations Article 17-104 will be effective August 1, 2024. Id. at 3-
4. The new minimum length will be 8.25 inches instead of 4 inches, and 
the new minimum length plus twice the diameter will be 12 inches 
instead of 6.75 inches. Id. at 4. The Postal Service submits Attachment 
2 with the Notice, which contains Governors' Decision No. 24-1 that 
establishes the revisions to the minimum size limitations for 
international letter-post rolls for products with rates of general 
applicability and includes a statement of explanation and justification 
for the proposed changes. Id. at 4, Attachment 2. The Postal Service 
also submits Attachment 3 with the Notice, which contains Governors' 
Decision No. 19-1 that authorizes Postal Service management to propose 
material changes to product descriptions for products with rates not of 
general applicability. Id. at 4-5, Attachment 3. The Postal Service 
submits Attachment 4, which is an application for non-public treatment 
of Governors' Decision No. 19-1. Notice at 5, Attachment 4.
    The Postal Service states that although its proposed changes will 
go into effect a few days before the effective date of the amended UPU 
Convention Regulations, it does not anticipate this will pose 
significant operational issues. Notice at 5. In addition, the Postal 
Service states that allowing the changes proposed in this Notice 
together with other proposed classification changes in other dockets 
\2\ to take effect on the same day (July 14, 2024) promotes efficiency 
in changing information technology systems. Id. at 2, 5 n.4.
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    \2\ Docket No. CP2024-230, United States Postal Service Notice 
of Changes in Classifications of General Applicability for 
Competitive Products, April 9, 2024.
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    The Postal Service states that the proposed changes would not 
result in the violation of any provisions of 39 U.S.C. 3633 and 39 CFR 
part 3035. The Postal Service explains that changes to size limitations 
for international letter-post rolls for IPA, ISAL, and FCPIS, which are 
changes in classes of general applicability, are in accordance with 39 
CFR 3035.104(a) and (b), because the Notice is filed at least 30 days 
before the effective date of the changes and the Notice includes an 
explanation and justification for the changes, the effective date, and 
the record of proceedings regarding such decision. Id. at 5. In 
addition, the Postal Service states that the changes to size 
limitations for international letter-post rolls for IPA, ISAL, and 
FCPIS are not expected to significantly affect the ability of IPA, 
ISAL, and FCPIS products to cover an appropriate share of their costs, 
because international letter-post rolls represent only a subset of the 
revenue for these products and because these changes are not expected 
to materially affect revenue for these products in any event. Id. at 6. 
The Postal Service states that it does not separately identify 
international letter-post rolls, therefore data relating to the cost 
coverage impact of these changes on IPA, ISAL, and FCPIS are not 
available. Id. As a result, the Postal Service is not able to calculate 
the exact impact of these changes, and does not submit supporting 
financial workpapers usually included in Competitive price changes for 
products with rates of general applicability. Id.\3\ Nevertheless, in 
its professional judgment, the Postal Service does not believe these 
changes will have a significant impact on the cost coverage of IPA, 
ISAL, and FCPIS. Notice at 6. Furthermore, the Postal Service states 
that the same conclusion also applies to the changes to the products 
with rates not of general applicability that include international 
letter-post rolls. Id. at 6-7. Finally, the Postal Service states that 
the proposed changes in the Notice would not impair the ability of 
Competitive products to collectively cover an appropriate share of the 
institutional costs, because the effect of the proposed changes on 
revenue is likely to be small in relation to total Competitive product 
revenue. Id. at 7.
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    \3\ The Postal Service acknowledges that ISAL did not cover its 
costs in FY 2023. Id. at 6 n.5 (citing Docket No. ACR2023, United 
States Postal Service, Annual Compliance Report, December 29, 2023, 
at 100-01). However, the Postal Service explains that this was 
largely because of accounting adjustments that are the result of 
settlement processes established with a particular foreign post for 
prior calendar years. Notice at 6 n.5 (citing Docket No. ACR2023, 
Responses of the United States Postal Service to Questions 1-26, 28-
57, 61 of Chairman's Information Request No. 2, January 19, 2024, 
questions 29.a.-29.b. (Docket No. ACR2023, Response to CHIR No. 2)). 
The Postal Service does not anticipate such large accounting 
adjustments in future years. Notice at 6 n.5 (citing Docket No. 
ACR2023, Response to CHIR No. 2, question 29.e.). The Commission 
recognizes that ISAL has generally covered its attributable cost in 
prior years, and its failure to cover cost in FY 2023 appears to be 
a unique occurrence that resulted from the large, unexpected 
accounting adjustments. Notice at 6 n.5 (citing Docket No. ACR2023, 
Annual Compliance Determination, March 28, 2024, at 68 (FY 2023 
ACD)). The Commission encourages the Postal Service to monitor the 
impact of the price increase for ISAL that took effect in January 
2024 and to request further price increases as necessary based on 
its continued assessment of the product's projected cost coverage. 
Notice at 6 n.5 (citing FY 2023 ACD at 68). The Postal Service 
states that it will address any cost coverage issues relating to 
ISAL in future dockets. Notice at 6 n.5.
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    With regard to the likely impact that the proposed changes would 
have on users of the product and on competitors, the Postal Service 
states that the proposed changes may result in fewer items being 
entered as international letter-post rolls due to the increased minimum 
dimensions, thereby causing some volume to either migrate to larger 
dimensions or be sent through competitors. Id.

III. Commission Action

    The Commission establishes Docket No. MC2024-224 for consideration 
of matters raised by the Notice.
    The Commission invites comments on whether the Postal Service's 
filing is consistent with 39 U.S.C. 3633 and 3682 and 39 CFR 3040.212, 
3040.180, and part 3035. Comments are due no later than May 9, 2024. 
The public portions of the filings can be accessed via the Commission's 
website (http://www.prc.gov).

[[Page 27470]]

    The Commission appoints Mallory L. Smith to represent the interests 
of the general public (Public Representative) in this docket, pursuant 
to 39 U.S.C. 505.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. MC2024-224 for 
consideration of matters raised by the Postal Service's Notice.
    2. Pursuant to 39 U.S.C. 505, Mallory L. Smith is appointed to 
serve as an officer of the Commission (Public Representative) to 
represent the interests of the general public in this proceeding.
    3. Comments are due no later than May 9, 2024.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024-08162 Filed 4-16-24; 8:45 am]
BILLING CODE 7710-FW-P