[Federal Register Volume 89, Number 154 (Friday, August 9, 2024)]
[Proposed Rules]
[Pages 65301-65302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16787]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2024-10; Order No. 7309]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is acknowledging a recent Postal Service filing 
requesting the Commission initiate a rulemaking proceeding to consider 
changes to analytical principles relating to periodic reports (Proposal 
Four). This document informs the public of the filing, invites public 
comment, and takes other administrative steps.

DATES: Comments are due: August 27, 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. For Media Inquiries: Gail Adams, [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
II. Proposal Four
III. Notice and Comment
IV. Ordering Paragraphs

I. Introduction

    On July 24, 2024, 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 Four.
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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 Four), July 24, 2024 (Petition).
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II. Proposal Four

    The Postal Service explains that Proposal Four has two components, 
both aimed at improving estimates for First-Class Mail. Petition at 1. 
The Postal Service explains that the first component would improve unit 
mail processing cost estimates ``by expanding the use of Mail.dat 
information'' while the second would improve workshare cost-avoidance 
estimates by replacing the Non-automation Presort Cards Benchmark with 
a new Non-automation Mixed automated area distribution center (AADC) 
barcode (BC)-Benchmark. Petition, Proposal Four at 1.

A. Component One

    Background. In terms of the first component, the Postal Service 
states that it develops yearly mail processing unit cost estimates for 
First-Class Mail using cost models and calibrations filed in the Annual 
Compliance Review (ACR). Id. at 2. These estimates are based on a field 
study conducted in January of 2005. Id. at 2-3. In contrast, the Postal 
Service has used Mail.dat files and stratified inflation methods for 
the cost estimates for other classes of mail. Id. at 3. The Postal 
Service states that ``Mail.dat files were initially developed to 
prepare a mailing virtually from a known address list and from user-
specified preparation parameters--piece length, height, thickness and 
weight, bundle, and container minimums and maximums, etc.--that would 
mimic the actual physical preparation.'' Id. The Postal Service 
explains that, initially, Mail.dat files could not accurately reflect 
First-Class Mail mailings; however, recently the mailing industry and 
the Postal Service have developed a methodology to create accurate 
Mail.dat files for First-Class Mail. Id. at 3-4.
    Proposal. The Postal Service seeks to use Mail.dat files to 
estimate the preparation characteristics of the universe of First-Class 
Mail Presorted Letters/Postcards, thus improving the processing unit 
cost estimates for those mailpieces. Id. at 4. The Postal Service 
explains that, because Mail.dat files alone do not constitute a 
``census'' encompassing all First-Class Mail Presorted Letters/
Postcards pieces, it also proposes to use a stratified inflation 
methodology utilizing PostalOne! Mailing Statement data to infer the 
characteristics of the entire population. Id. at 5-12.
    Impact. The Postal Service explains that it ``measured and 
evaluated the impacts of Component One by applying its procedures to 
data from the ACR 2023 reporting period, inputting the resulting data 
into downstream models (folders USPS-FY23-10 and USPS-FY23-11), and 
examining the consequent changes in reported unit costs.'' Id. at 12. 
The Postal Service states that the results are in accord with what 
would be expected when transitioning from a model predicated on data 
from 2005 to ``a procedure that is capable of incorporating much more 
recent mail entry patterns.'' Id. at 14-16.

B. Component Two

    Background. In terms of the second component, the Postal Service 
states that it ``seeks to improve the precision of the barcoding cost 
avoidance for First-Class Mail Automation Mixed AADC (MAADC) Presort 
Cards by replacing the Nonautomation Presort Cards benchmark with a 
proposed Nonautomation MAADC BC-Benchmark.'' Id. at 17. Specifically, 
it explains that the most accurate measure of barcode cost avoidance is 
the difference between a barcoded presorted rate category and a 
similarly situated rate category that does not contain a barcode. Id. 
However, the current benchmark for Automation MAADC Cards is Presorted 
Cards, which the

[[Page 65302]]

Postal Service states is not analogous and therefore ``does not provide 
the true value of the MAADC barcode.'' Id. at 18.
    Proposal. In order to provide a benchmark that more accurately 
measures the cost avoidance for Automation MAADC Cards, the Postal 
Service seeks to create a new benchmark--the Non-automation MAADC BC-
Benchmark. Id. In order to do so, the Postal Service ``would make 
changes to the First-Class Mail Letters cost avoidance model last filed 
in Docket No. ACR2023 as folder USPS-FY23-10, while simultaneously 
employing the Mail Characteristics Study (MCS) changes from Component 
One,'' discussed above. Id.
    Impact. According to the Postal Service, the changes suggested in 
Proposal Four would result in a barcode cost avoidance of 0.617 cents 
(compared to the negative cost avoidance of -0.110 cents resulting from 
use of the current benchmark), which would ``enable the Postal Service 
to set appropriate discounts for commercial mailers for pre-barcoding 
First-Class Mail cards.'' Id. at 20. Further, the Postal Service 
explains that its changes would reduce the avoided cost from $0.018 to 
$0.006 for Automation Mixed AADC Cards and increase its passthrough 
from 88.9 percent to 266.7 percent. Id.

III. Notice and Comment

    The Commission establishes Docket No. RM2024-10 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 
Four no later than August 27, 2024. Pursuant to 39 U.S.C. 505, Gregory 
S. Stanton 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. RM2024-10 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 Four), filed July 
24, 2024.
    2. Comments by interested persons in this proceeding are due no 
later than August 27, 2024.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Gregory S. 
Stanton 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 the publication of this Order in 
the Federal Register.

    By the Commission.
Jennie L. Jbara,
Primary Certifying Official.
[FR Doc. 2024-16787 Filed 8-8-24; 8:45 am]
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