[Federal Register Volume 90, Number 132 (Monday, July 14, 2025)]
[Proposed Rules]
[Pages 31158-31159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-13160]
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Proposed Rules
Federal Register
________________________________________________________________________
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. 90, No. 132 / Monday, July 14, 2025 /
Proposed Rules
[[Page 31158]]
POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2025-12; Order No. 8990]
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. This
document informs the public of the filing, invites public comment, and
takes other administrative steps.
DATES: Comments are due: August 1, 2025.
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. Proposal
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
On July 1, 2025, 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 modifications to the methodology for
calculating workshare discount passthrough percentages for dropshipped
USPS Marketing Mail parcel-shaped pieces. Petition, Proposal at 1. In
particular, the Postal Service plans to set prices and calculate
dropship discounts separately for parcel-shaped pieces up to 3.3 oz and
for parcel-shaped pieces above 3.3. oz. Id.
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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, July 1, 2025 (Petition). The proposed change
is attached to the Petition (Proposal).
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II. Proposal
Background. The Postal Service explains that in 2017 there were two
rates available for flat-shaped USPS Marketing Mail pieces: a per-piece
rate for pieces up to 4.0 oz, and a per-piece and per-pound rate for
pieces heavier than 4.0 oz. Id. at 1-2. The same two rates were
available for parcel-shaped USPS Marketing Mail pieces, below and above
a breakpoint of 3.3 oz. Id. at 2.
For flat-shaped and parcel-shaped USPS Marketing Mail pieces above
the respective breakpoints, the passthrough calculation used at the
time divided the discount by the avoided cost per pound for all pieces
above and below the breakpoint. Id. The Postal Service describes this
method as incomplete, noting that pieces below the respective
breakpoints were excluded from the numerator even as the weight of
those pieces was included in the denominator. Id. In Docket No. RM2017-
11, the Commission approved a revised calculation that included in the
numerator the discount for pieces at or below the breakpoint weight.\2\
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\2\ Id. at 2-3. Docket No. RM2017-11, Order on Analytical
Principles Used in Periodic Reporting (Proposal Seven), November 20,
2017, at 3 (Order No. 4227).
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The Postal Service states that because the passthrough percentages
depended on the actual volume and weights shipped there was substantial
variation in the calculated passthrough percentages. Petition, Proposal
at 3. This variation culminated in Docket No. R2023-1, where the Postal
Service found that it was mathematically impossible for passthrough
calculations for a subset of USPS Marketing Mail flat-shaped pieces to
comply with the Commission's workshare discount regulations. Id. at 3-
4. The Commission directed the Postal Service to file a proposal to
correct that anomaly.\3\
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\3\ Id. at 4 (citing Docket No. RM2022-12, Order Approving
Postal Service Application for Waiver Under 39 CFR 3030.286, August
30, 2022, at 11 (Order No. 6261)).
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In Docket No. RM2023-4, the Postal Service proposed a revised
methodology for USPS Marketing Mail flat-shaped pieces to address the
anomaly. Petition, Proposal at 4. Under the proposed methodology, USPS
Marketing Mail flat-shaped pieces would be charged a fixed per-piece
price, and pieces heavier than the breakpoint weight would also be
charged a per-pound price for the weight above the breakpoint. Id.
Additionally, all dropship discounts were proposed to be based on the
per-piece price, per-piece cost avoidance was calculated using the
average weight of all flat-shaped pieces, and pound prices did not vary
by dropship entry point. Id. at 5. The Commission approved the revised
methodology and the corresponding prices.\4\
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\4\ Id. at 5-6 (citing Docket No. RM2023-4 Order on Analytical
Principles Used in Periodic Reporting (Proposal One), April 6, 2023,
at 14 (Order No. 6474); Docket No. R2023-2, Order on Price
Adjustments for First-Class Mail, USPS Marketing Mail, Periodicals,
Package Services, and Special Services Products and Related Mail
Classification Changes, May 31, 2023, at 62 (Order No. 6526)).
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The Postal Service found that the new methodology reduced
incentives for mailers to dropship flat-shaped pieces weighing more
than the breakpoint close to their delivery destinations, provided
workshare discounts too low relative to avoided costs for flat-shaped
pieces weighing more than the breakpoint, and provided workshare
discounts too high relative to avoided costs for flat-shaped pieces
weighing less than the breakpoint. Id. at 6.
In Docket No. RM2024-3, the Postal Service therefore proposed
separate workshare discount passthrough calculations for USPS Marketing
Mail flat-shaped lightweight (pieces weighing up to the breakpoint) and
heavyweight (pieces weighing more than the breakpoint) pieces. See id.
at 7. For lightweight flat-shaped pieces, the Postal Service proposed
to include in the calculation of avoided cost the average weights of
lightweight pieces only. Id. For heavyweight flat-shaped pieces, the
Postal Service proposed to apply pound prices to the entire weight of
each piece, to reintroduce per-pound dropship discounts that varied by
entry point, and to base dropship discounts on the per-pound component
of the
[[Page 31159]]
rates.\5\ The Commission approved the revised methodology.\6\
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\5\ Id. at 11. The Proposal omits pages 8 through 10.
\6\ Petition, Proposal at 12 (citing Docket No. RM2024-3, Order
Approving Analytical Principles Used in Periodic Reporting (Proposal
One), March 12, 2024 (Order No. 7001).
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Proposal. The Postal Service proposes to use for USPS Marketing
Mail parcel-shaped pieces the same methodologies approved for USPS
Marketing Mail flat-shaped pieces in Docket No. RM2024-3.
Impact. The Postal Service states that the proposed changes will
alter the workshare discounts and workshare discount passthrough
percentages for dropshipped USPS Marketing Mail parcel-shaped pieces.
Petition, Proposal at 14. If the Commission denies the proposed change
in USPS Marketing Mail pricing structures in Docket Nos. MC2025-1483
and RM2025-11, the Postal Service would separately report passthroughs
for pieces above and below the breakpoint for each of four current
passthroughs, for a total of eight passthroughs. Id. at 14-15. If the
Commission instead approves the proposed change in USPS Marketing Mail
pricing structures in Docket Nos. MC2025-1483 and RM2025-11, the Postal
Service would report four passthroughs: above breakpoint and below
breakpoint for each of two new pricing categories.\7\
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\7\ Id. at 15-16. For details of the proposed new pricing
structure, see Docket Nos. MC2025-1483 and RM2025-11.
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The Postal Service additionally notes that the Proposal creates the
possibility for irrational pricing--specifically, of a pricing
discontinuity at the breakpoint between lightweight and heavyweight
USPS Marketing Mail parcel-shaped pieces. Petition, Proposal at 16-18.
The Postal Service states that it will avoid proposing irrational
prices and believes that the improvement in dropshipping price signals
from the Proposal outweighs any such discontinuity. Id. at 18.
III. Notice and Comment
The Commission establishes Docket No. RM2025-12 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 the Proposal
no later than August 1, 2025. 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. RM2025-12 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, filed July 1, 2025.
2. Comments by interested persons in this proceeding are due no
later than August 1, 2025.
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 the publication of this order in
the Federal Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2025-13160 Filed 7-11-25; 8:45 am]
BILLING CODE 7710-FW-P