Federal Register: PROPOSED RULES Domestic Mail Manual: [39 CFR Part 111]

POSTAL SERVICE

CFR Citation: 39 CFR Part 111

NOTICE: PROPOSED RULES

ACTION: Domestic Mail Manual:

DOCUMENT ACTION: Proposed rule.

SUBJECT CATEGORY: Required Number of Pieces Increased for 5-Digit and 5-Digit Scheme Packages of Low-Weight Standard Mail Flats

DATES: Comments must be received on or before January 12, 2004.

DOCUMENT SUMMARY: The Postal Service proposes amending Domestic Mail Manual (DMM) standards by raising the minimum number of pieces at which required 5digit and optional 5digit scheme presort destination packages may be prepared in a Standard Mail job consisting of flatsize pieces that weigh no more than 5 ounces (0.3125 pound) and measure no more than \3/4\ inch thick. The maximum thickness permitted for nonautomation flats under DMM C050.3.0 and flats prepared in 5digit scheme presort destination packages under DMM L007 is \3/4\ inch.

Under current standards, mailers have the option to prepare 5digit and 5digit scheme presort destination packages (collectively referred to in this proposed rule as 5digit packages) of flatsize pieces not more than \3/4 \ inch thick, regardless of weight, whenever there are as few as 10 pieces to the same 5digit ZIP Code or the same 5digit scheme destination in DMM L007. Under those same standards, mailers must prepare such packages when there are 17 or more pieces to these destinations. If a mailer selects an optional minimum 5digit package size from 10 to 16 pieces, that same size must be used consistently throughout the mailing job for all 5digit packages.

Under the proposed changes, for Standard Mail mailings of flatsize pieces that weigh no more than 5 ounces, mailers would be required to prepare 5digit packages whenever there are 15 or more pieces to a destination. Mailers would not be permitted to prepare such pieces in 5digit packages when there are fewer than 15 pieces to a 5digit ZIP Code or optional 5digit scheme destination. For mailings of pieces that weigh more than 5 ounces, mailers would be required to prepare 5 digit packages whenever there are 10 or more pieces to a destination.

SUMMARY: Low-weight standard mail flats; 5-digit and 5-digit scheme packages; required number of pieces increased,

SUPPLEMENTAL INFORMATION

Effective September 5, 2002, DMM M610 for nonautomation rate Standard Mail flats, DMM M820 for automation rate Standard Mail flats, and DMM 950 for advanced preparation options of Standard Mail flatsize pieces were revised to allow mailers to select a number from 10 to 17 as the minimum number of pieces at which 5digit packages are prepared in a Standard Mail job of flatsize pieces no more than \3/4\ inch thick, without regard to the weight of the individual pieces. Prior to that date, mailers were required to prepare 5digit packages whenever there were 10 or more pieces to a destination. Effective January 9, 2003, mailing standards in the DMM were amended to permit the preparation of optional 5digit scheme packages (DMM L007) using the same flexible minimum of 10 to 17 pieces. Under the current standards, mailers may prepare 5digit (and 5digit scheme) packages with as few as 10 pieces.

Increased Processing Efficiencies

The Postal Service adopted the current optional 5digit package minimum (optional with 10 to 16 pieces, required with 17 pieces) based in large part on an examination of the productivities and piece processing efficiencies of the automated flat sorting machine (AFSM) 100, which can handle flatsize pieces up to \3/4\ inch thick.

Initial analysis of piece, package, and container handling costs indicates that the appropriate minimum for 5digit packages of Standard Mail flatsize pieces is, on average, above 10 pieces, and that the minimum could be increased for flats likely to be processed on the AFSM 100. AFSM 100compatible flats are limited to flatsize pieces measuring no more than 12 inches high, 15 inches long, and \3/4\ inch thick. Increasing the minimum for 5digit packages could help reduce overall Postal Service processing costs with the additional AFSM 100 piece handlings for pieces moving from 5digit to 3digit packages more than offset by reduced package handling costs. Package handling costs include processing the packages, either on a small parcel and bundle sorter (SPBS) or manually, and
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opening the packages and preparing the mail for piece processing. Reduced Mailer Production Costs

Increasing the package minimum would also lower mailer production costs, as mailers would prepare fewer packages, with no negative impact on rates or service for pieces that move from 5digit to 3digit packages. Analysis of mailings that used a 17piece minimum for preparing 5digit packages showed reductions in the total number of 5 digit and 3digit packages.

Specifically, for lowweight pieces, more packages were eliminated because more pieces that would have been prepared in small 5digit packages of less than 17 pieces were added to existing 3digit packages or combined into a single new 3digit package, and these larger packages were still within the 20pound maximum package weight. For heavier pieces, fewer packages were eliminated, and the savings in package handlings did not sufficiently offset the costs of the additional piece handlings.

An informal survey of the mailing industry revealed that only a small number of mailers are taking advantage of the option to set their 5digit package minimum higher than 10 pieces (up to 17 pieces), particularly for mailings of lowweight pieces. With such limited participation by the mailing industry, the Postal Service and mailers are unable to realize the potential cost saving opportunities associated with fewer package handlings.

New Proposed Required Preparation

Because the proposed changes in minimum package size would help reduce mail processing costswhich in turn would help to mitigate future rate increasesand because these proposed changes would have no negative impact on mailers' postage or Postal Service revenue, the Postal Service now believes that it would be in the mutual interests of the mailing industry and the Postal Service to implement the proposed changes before the next omnibus rate case.

Pieces weighing 5 ounces or less represent approximately 80 percent of the volume of Standard Mail flats (both regular and nonprofit rates) not mailed at Enhanced Carrier Route rates. For heavier pieces weighing more than 5 ounces up to the maximum weight of less than 16 ounces, there is a significant drop in cost savings when a 5digit package minimum higher than 10 pieces is used because fewer total packages, and associated reduced handlings, are eliminated to offset the increased piece handlings. The number of packages that can be eliminated is limited by the maximum package weight of 20 pounds and by restrictions on package height, such as the maximum height of 3 inches for some packages prepared in sacks, related to maintaining package integrity (see DMM M020).

The fact that many mailers set their maximum package size below 20 pounds (e.g., 15 pounds) for other reasons, such as creating more uniform packages for building pallets or to limit counterstacking within packages, also reduces the potential savings from using a higher package minimum. For pieces weighing up to 5 ounces, mailers would no longer be able to use an optional minimum higher than 15 pieces. Current standards permit a minimum up to 17 pieces. At the same time, under this proposed rule, mailers would not be permitted to prepare 5 digit or optional 5digit scheme packages when there are fewer than 15 pieces to a 5digit or 5digit scheme destination.

For Standard Mail mailing jobs consisting of flatsize pieces that weigh more than 5 ounces or that are more than \3/4\ inch thick (automation rate UFSM 1000compatible pieces only), mailers would be required to prepare 5digit and optional 5digit scheme packages whenever there are 10 or more pieces to a 5digit or 5digit scheme destination. For ease of administration, mailers would also be required to use the 10piece 5digit package minimum for mailing jobs of nonidenticalweight pieces when those jobs include a combination of pieces that weigh up to and including 5 ounces and pieces that weigh more than 5 ounces. Mailers would no longer be permitted to use optional 5digit package minimums greater than 10 pieces, and up to 17 pieces, as currently permitted for such mailings.

The Postal Service and mailers recognize that the optimal 5digit package size can vary somewhat from mailing to mailing, based on mailing characteristics such as piece weight, presort density, piece thickness, maximum package size parameters selected, containerization methods, and manufacturing processes. However, for ease of use, a single minimum for pieces weighing up to and including 5 ounces and a single minimum for pieces weighing more than 5ounces is proposed, rather than a range of minimums (that is, the current range of 10 to 17 pieces).

There are no changes proposed to the preparation standards for other classes of mail or for other Standard Mail processing categories and presort destination package levels. Mailers would continue to be required to prepare 3digit and area distribution center (ADC) packages whenever there are 10 or more pieces to those destinations, and carrier route packages would continue to be required to contain a minimum of 10 pieces. No changes are proposed for packages of automation rate flat size pieces measuring more than \3/4\ inch thick (UFSM 100compatible pieces) or for any type of container (e.g., letter trays, sacks, pallets).

Current Recommended Preparation

For mailings of pieces that weigh no more than 5 ounces and are currently prepared using a 10piece package minimum, pieces now prepared in 5digit packages containing from 10 to 14 pieces, would move either to an existing 3digit package or be consolidated into new 3digit packages when the higher minimum of 15 pieces is used for 5 digit package preparation. In either case, the overall number of packages prepared by mailers and processed by the Postal Service would decrease. For example, when the proposed 15piece package minimum is used, 3.2ounce catalogs currently prepared in five 5digit packages that each contain from 10 to 14 pieces for different ZIP Codes within the same 3digit ZIP Code destination, could be combined with other pieces already in a 3digit package; alternatively, those pieces could be placed in one new 3digit package (that weighs less than 20 pounds).

The Postal Service recommends that mailers begin using a minimum of 15 pieces for 5digit and optional 5digit scheme package preparation permitted under current mailing standards as soon as possible for mailings of pieces that weigh no more than 5 ounces. The Postal Service also recommends that mailers limit the number of packages they produce and take necessary steps to ensure package integrity, by setting their maximum package size as close to the maximums permitted in DMM M020, particularly for packages prepared on pallets (e.g., 20 pounds).

Movement of pieces from 5digit packages to 3digit packages as a result of using a 15piece minimum under the proposed changes would not impact postage paid by mailers because Standard Mail flats are eligible for the \3/5\ rates whether prepared in 5digit or 3digit packages, and placed on any pallet level, or when placed in 5digit sacks, followed by 3digit sacks, containing at least 125 pieces or 15 pounds of pieces.

The Postal Service is proposing the required use of the 15piece 5 digit package minimum beginning April 4,
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2004. At that time, mailings consisting of flatsize pieces that weigh more than 5 ounces or automation rate pieces that are more than \3/4\ inch thick regardless of weight would no longer be permitted to use a 5digit package minimum greater than 10 pieces. Also on that date, mailings of flatsize pieces that weigh no more than 5 ounces (and measure no more than \3/4\ inch thick) would not be permitted to use a 5digit package minimum other than 15 pieces.

The April 4, 2004 required implementation date would allow mailers adequate time to install any software changes needed for compliance with the new standards and to test their systems. It will also ensure that all Postal Service personnel and systems are prepared for the change. April 4 is the first Sunday following the required use date (April 1, 2004) of the Postal Service Address Information System (AIS) database released February 1, 2004. This should enable software vendors to include the proposed changes in a regularly scheduled release of their software. Although mailers using the new 15piece 5digit package minimum would not be required to use Presort Accuracy Validation and Evaluation (PAVE)certified software (except for palletized mailings prepared under the package reallocation option in DMM M045, or mailings prepared under DMM M920, M930 or M940), PAVE tests would be available for presort software vendors to test this new minimum.

Although exempt from the notice and comment requirements of the Administrative Procedure Act [5 U.S.C. 553 (b), (c)] regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on the following proposed revisions of the Domestic Mail Manual (DMM) incorporated by reference in the Code of Federal Regulations. See 39 CFR part 111.

List of Subjects in 39 CFR Part 111

Administrative practice and procedure, Postal Service. PART 111[AMENDED]

1. The authority citation for 39 CFR part 111 continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 416, 30013011, 32013219, 34033406, 3621, 3626, 5001.

2. Revise the following sections of the Domestic Mail Manual (DMM) as follows:
Domestic Mail Manual (DMM)
* * * * *
E Eligibility
* * * * *
E600 Standard Mail
* * * * *
E620 Presorted Rates
1.0 BASIC STANDARDS
1.1 All Pieces
* * * * *

[Revise 1.1b to read as follows:]

b. Except as provided in 1.2, be part of a single mailing of at least 200 pieces or 50 pounds of pieces qualifying for Presorted Standard Mail. Basic rate and \3/5\ rate pieces prepared as part of the same mailing are subject to a single minimum volume standard. Regular and Nonprofit mailings must meet separate minimum volumes.
* * * * *
2.0 RATES
[Revise 2.0 by reorganizing text to read as follows:]

2.1 Application

Presorted rates for Regular and Nonprofit Standard Mail apply to letters, flats, and machinable and irregular parcels that meet the eligibility standards in E610 and the preparation standards in M045, M610, or, for flatsize mail only, M900.

2.2 Basic Rate

The basic rate applies to pieces that do not meet the standards for \3/5\ rates described in 2.3.

2.3 \3/5\ Rates

The \3/5\ rate applies to qualifying pieces if they are presented:

a. For lettersize pieces (see C050.2.0), in quantities of 150 or more pieces for a single 3digit area, prepared in 5digit or 3digit trays.

b. For flatsize pieces (see C050.3.0):
(1) In a 5digit or 5digit scheme (under M950) package of 10 or more pieces, or 15 or more pieces, as applicable; or in a 3digit package of 10 or more pieces; placed in a 5digit, 5digit scheme (under M920), or 3digit sack containing at least 125 pieces or 15 pounds of pieces.
(2) In a 5digit package of 10 or more pieces, or 15 or more pieces, as applicable, that is part of a group of packages sorted to a merged 5digit sack or merged 5digit scheme sack (under M920) that contains either at least one qualifying carrier route package of 10 or more pieces, or contains at least 125 pieces or 15 pounds of pieces prepared in 5digit packages (both automation and Presorted rate 5 digit packages count toward the 125piece or 15pound sack minimum). (3) In a 5digit or 5digit scheme package of 10 or more pieces, or 15 or more pieces, as applicable; or in a 3digit package of 10 or more pieces; palletized under M045, M920, M930, or M940.

c. For machinable parcels (see C050.4.0):
(1) In a 5digit scheme, 5digit, ASF, or BMC sack containing at least 10 pounds of parcels. (The \3/5\ rates are available for parcels in 5digit scheme or 5digit sacks only when all possible 5digit scheme and 5digit sacks are prepared.)
(2) On a 5digit scheme, 5digit, ASF, or BMC pallet. (The \3/5\ rates are available for parcels on 5digit scheme or 5digit pallets only when all possible 5digit scheme and 5digit pallets are prepared.)

d. For irregular parcels (see C050.5.0), in a 5digit scheme, 5 digit, or 3digit sack containing at least 125 parcels or 15 pounds of parcels.

e. For commingled machinable and irregular parcels, in a 5digit scheme or 5digit sack containing at least 10 pounds of parcels. (The \3/5\ rates are available for parcels in 5digit scheme or 5digit sacks only when all possible 5digit scheme and 5digit sacks are prepared.)
* * * * *
E640 Automation Rates
1.0 REGULAR AND NONPROFIT RATES
* * * * *

1.5 Rate ApplicationFlats

Automation rates apply to each piece that is sorted under M045, M820, or M900 into the qualifying groups:

[Revise 1.5a to read as follows:]

a. Pieces in 5digit or 5digit scheme packages of 10 or more pieces, or 15 or more pieces, as applicable; or in 3digit packages of 10 or more pieces qualify for the \3/5\ automation rate.
* * * * *
M Mail Preparation and Sortation
* * * * *
M600 Standard Mail (Nonautomation)
M610 Presorted Standard Mail
* * * * *
4.0 PREPARATIONFLATSIZE PIECES
* * * * *
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4.2 Packaging and Labeling

Preparation sequence, package size, and labeling: [Revise 4.2a to read as follows:]

a. 5digit (required):
(1) For pieces each weighing no more than 5 ounces (0.3125 pound): 15piece minimum; red Label 5 or OEL.
(2) For pieces each weighing more than 5 ounces (0.3125 pound): 10 piece minimum; red Label 5 or OEL.
* * * * *
M800 All Automation Mail
* * * * *
M820 FlatSize Mail
* * * * *
5.0 STANDARD MAIL

5.1 Packaging and Labeling

Preparation sequence, package size, and labeling: [Revise 5.1a and 5.1b to read as follows:]

a. 5digit scheme (optional):
(1) For pieces weighing no more than 5 ounces (0.3125 pound) each: 15piece minimum; optional endorsement line (OEL) required.
(2) For pieces weighing more than 5 ounces (0.3125 pound) each: 10 piece minimum; OEL required.

b. 5digit (required):
(1) For pieces weighing no more than 5 ounces (0.3125 pound) each and measuring no more than \3/4\ inch thick: 15piece minimum; red Label 5 or OEL.
(2) For pieces weighing more than 5 ounces (0.3125 pound) each or measuring more than \3/4\ inch thick: 10piece minimum; red Label 5 or OEL.
* * * * *
M900 Advanced Preparation Options for Flats
* * * * *
M950 CoPackaging Automation Rate and Presorted Rate Pieces
* * * * *
3.0 STANDARD MAIL
* * * * *

3.2 Package Preparation

Package size, preparation sequence, and labeling: [Revise 3.2a and 3.2b to read as follows:]

* * * * *

We will publish an appropriate amendment to 39 CFR 111.3 to reflect these changes if the proposal is adopted.
Neva R. Watson,
Attorney, Legal Policy and Ratemaking Law.
[FR Doc. 0330664 Filed 121003; 8:45 am]
BILLING CODE 771012P

FOR FURTHER INFORMATION CONTACT Cheryl Beller, Product Redesign, at (703) 2923747; or Neil Berger, Mailing Standards, at (703) 2923645.