Federal Register: September 25, 2009 (Volume 74, Number 185)
DOCID: fr25se09-32 FR Doc E9-22680
POSTAL REGULATORY COMMISSION
Western Area Power Administration
CFR Citation: 39 CFR Part 3055
Docket ID: [Docket No. RM2009-11; Order No. 292]
NOTICE: Part III
DOCID: fr25se09-32
DOCUMENT ACTION: Proposed rule.
SUBJECT CATEGORY:
Postal Service Performance and Customer Satisfaction Reporting
DATES: Initial comments due October 26, 2009. Reply comments due November 24, 2009.
DOCUMENT SUMMARY:
The Commission is proposing rules to address Postal Service reporting on service performance measurement and customer satisfaction. This proposal implements new statutory provisions. Comments will assist the Commission in developing final rules.
SUMMARY:
Postal Regulatory Commission
SUPPLEMENTAL INFORMATION
Regulatory History
72 FR 72395 (December 20, 2007).
73 FR 39996 (July 11, 2008).
73 FR 73664 (December 2, 2008).
73 FR 39996 (July 11, 2008).
I. Introduction
II. Background
III. Statutory Provisions
IV. Service Performance Measurements Reporting
V. Special Services Measurement Systems
VI. Reporting of Customer Satisfaction
VII. Supporting Information
VIII. Designation of Public Representative
IX. Solicitation of Comments
X. Ordering Paragraphs
I. Introduction
This rulemaking is part of the series of rulemakings initiated by the Postal Regulatory Commission (Commission) to fulfill its responsibilities under the Postal Accountability and Enhancement Act (PAEA), Public Law 109435, 120 Stat. 3218 (2006). The proposed rules described herein seek to establish reporting requirements for the measurements of level of service and degree of customer satisfaction afforded by the Postal Service in connection with each market dominant product. The reporting of level of service and customer satisfaction are required by 39 U.S.C. 3652(a)(2)(B) as part of the Postal Service's annual report to the Commission. This is a necessary part of the Commission's implementation of a modern system of rate regulation for market dominant products that ensures service is not impaired as a result of the greater flexibility provided to the Postal Service under the PAEA and the rate cap requirements, and it supports an important part of the Commission's reporting responsibilities. See 39 U.S.C. 3622 and 3651.
The Commission recognizes that these proposed rules are being published at a time when the Postal service is experiencing unprecedented fiscal challenges. The proposed rules are designed to maximize transparency using data sources that either exist now, or are in active development. The proposed reporting requirements are written with a longterm goal in mind, i.e., to allow the Commission to perform its regulatory functions under the PAEA and to meet the statutory reporting requirements cited above, and are not necessarily based on the capabilities of existing measurement systems. The Commission recognizes the transitional needs of the Postal Service and accepts its request to develop and utilize internal measurement systems relying on barcode technology. Total compliance with the reporting requirements will not be possible until the Intelligent Mail barcode (IMb), Red Tag/DelTrak, and Delivery Confirmationbased measurement systems provide reliable, representative data. In some instances, new or enhanced measurement capabilities may be required.
In the short term, the Commission accepts that the Postal Service cannot wholly comply with these reporting requirements because specific measurement systems have not been fully developed or deployed. As long as the indicators already in place demonstrate adequate service levels, the Commission will allow the Postal Service to proceed diligently to develop a plan for eventually being able to supply the required information, and periodically to demonstrate progress in implementing its plan. If a new requirement in these proposed rules is viewed by the Postal Service as particularly onerous, or involves costly new data collection that does not appear to add needed transparency, the Postal Service is requested to identify it and attempt to quantify its incremental cost.
To assist commenters to visualize the scope and extent of information required, illustrative data reporting charts are included as section VIISupporting Information.
II. Background
The first part of this rulemaking addresses reporting of the level of service (or the service performance measurements) associated with each market dominant product. Development of the reporting requirements is the final step in a fourstep process for incorporating measurements of level of service into the modern system of rate regulation for market dominant products. The previous steps established service standards, identified service performance measurement systems, and established performance goals.
The establishment of service standards is a direct result of the
requirements of 39 U.S.C. 3691, which require the Postal Service, in
consultation with the Postal Regulatory Commission, to establish by
regulation a set of modern service standards for market dominant
products. Initial consultations between the Commission and the Postal
Service concluded on November 16, 2007, with the Commission providing
the Postal Service with comments addressing the Postal Service's
service standards proposals.\1\ The Postal Service completed this task
by publishing as a final rule Modern Service Standards for Market
Dominant Products, December 19, 2007 (Service Standards).\2\
\1\ Comments of the Postal Regulatory Commission on Modern
Service Standards for Market Dominant Products, November 16, 2007.
The consultations are described as ``initial'' because of the
ongoing nature of consultations that are necessary to transition
from a set of standards to an operational measurement system
encompassing performance goals (see uncodified Sec. 302(b)(1) of the PAEA) and reporting mechanisms (see U.S.C. 3652).
\2\ 72 FR 72216 (December 19, 2007) (to be codified at 39 CFR parts 121 and 122).
In June 2008, the Postal Service identified service performance
measurement systems by providing the Commission with a draft of its
Service Performance Measurement plan (Plan).\3\ The Plan presents the
various measurement systems the Postal Service proposes to use to
measure the standards presented in the Service Standards document identified above.\4\
[[Page 49191]]
The Postal Service submitted the Plan for the Commission's ``review,
feedback, and concurrence.'' \5\ In response, the Commission initiated
Docket No. PI20081 to consider the Postal Service's Plan and to
solicit public comment. This process culminated with the Commission
issuing PRC Order No. 140, Order Concerning Proposals for Internal
Service Standards Measurement Systems, November 25, 2008 (Order No.
140). This order completed the second step in the process by approving
the approaches that the Postal Service proposes to take in developing
internal measurement systems for various classes of mail.\6\
\3\ The Commission published the Plan in Docket No. PI20081,
Second Notice of Request for Comments on Service Performance
Measurement Systems for Market Dominant Products, June 18, 2008
(Order No. 83). The draft published in Order No. 83 was the last
draft in a series of drafts provided by the Postal Service to the Commission.
\4\ An objective in designing service performance standards is
for the Postal Service to provide ``a system of objective external
performance measurements for each marketdominant product as a basis
for measurement of Postal Service performance.'' 39 U.S.C.
3691(b)(1)(D). However, ``with the approval of the Postal Regulatory
Commission an internal measurement system may be implemented instead
of an external measurement system'' for individual products. 39
U.S.C. 3691(b)(2). In the Plan, the Postal Service proposes various
internal, external, and hybrid (containing both internal and
external elements) measurement systems to measure the performance of its mail products.
\5\ Letter from Thomas G. Day, Senior Vice President, United
States Postal Service, to Dan G. Blair, Chairman, Postal Regulatory Commission, June 3, 2008.
\6\ Approval was provided with the exception of the measurement
systems for several Special Services where the Commission directed
the Postal Service to propose a remedial plan by June 1, 2009. The
Postal Service submitted remedial proposals on May 15, 2009. See
Letter from Thomas G. Day, Senior Vice President, Intelligent Mail
and Address Quality, United States Postal Service, to Dan G. Blair,
Chairman, Postal Regulatory Commission, May 15, 2009 (May 15, 2009 Letter from Thomas G. Day).
The PAEA directed the Postal Service, in consultation with the Commission, to develop and submit to Congress a plan for meeting service standards. Congress directed, inter alia, that the plan establish performance goals. The Postal Service posted its FY 2009 targets on its Rapid Information Bulletin Board System (RIBBS) Web page at http://ribbs.usps.gov/targets/documents/tech_guides/Targets.pdf.
The Postal Service's Plan included proposals for both annual and quarterly reporting of service performance measurements. The Commission solicited comments on service performance reporting when it considered the Postal Service's proposals for measurement systems. However, in Order No. 140, the Commission limited its considerations of those comments in anticipation of the instant rulemaking, which specifically addresses reporting requirements.
The fourth and final step in the process, and the subject of this
rulemaking, is for the Commission to issue rules specifying the
reporting of service performance. The Commission incorporates many of
the elements proposed by the Postal Service in its Plan and the ideas
presented in the comments on reporting measurements into the rules now
proposed. Interested persons are encouraged to take a fresh look at the
proposals presented by the Commission in this rulemaking and provide
comments. Interested persons are asked to reiterate and amplify their
comments where specific areas identified in previous comments are not
sufficiently addressed to assure that all relevant issues are adequately considered.\7\
\7\ In Order No. 140 at 3646, the Commission briefly reviewed
the Postal Service's reporting proposals and the associated
comments. The Commission indicated issues that would be appropriate
for consideration in this rulemaking, and issues that appear beyond
the scope of what the Commission would find necessary for its needs
in reporting service performance measurements. Commenters are asked
to review and consider this material prior to submitting comments in this docket.
The second part of this rulemaking concerns the reporting of customer satisfaction. This part introduces new material that previously has not been addressed by the Postal Service or the Commission. Interested persons also are asked to comment on this material.
In Order No. 140, the Commission identified areas within the Special Services measurement systems that required improvement. The Postal Service has submitted proposals for modifications to these measurement systems which are discussed separately in section V. Special Services Measurement Systems of this Rulemaking.
III. Statutory Provisions
Section 3652(a)(2) of title 39 requires that the Postal Service
include in an annual report to the Commission an analysis of the
quality of service ``for each marketdominant product provided in such
year'' by providing ``(B) measures of the quality of service afforded
by the Postal Service in connection with such product, including(i)
the level of service (described in terms of speed of delivery and
reliability) provided; and (ii) the degree of customer satisfaction
with the service provided.'' In complying with this requirement, the
Commission has authority to ``by regulation, prescribe the content and
form of the public reports (and any nonpublic annex and supporting
matter relating to the report) to be provided by the Postal Service * *
*.'' 39 U.S.C. 3652(e)(1).\8\ The Commission also is to have access to
``supporting matter'' in connection with any information submitted under this section. 39 U.S.C. 3652(d).
\8\ The Commission's authority is continuing as it has further
authority to initiate proceedings to improve the quality, accuracy
and completeness of data whenever it shall appear that ``the quality
of service data has become significantly inaccurate or can be significantly improved.'' 39 U.S.C. 3652(e)(2)(B).
Section 3622 of title 39 provides that the Commission by regulation establish ``a modern system for regulating rates and classes for marketdominant products.'' The quality of service, and its reporting, forms an integral part of many of the objectives and factors set forth in this section. Reporting on quality of service allows assessment of whether the Postal Service is meeting the objective of maintaining the ``high quality service standards established under section 3691.'' 39 U.S.C. 3622(b)(3). It furthers the objective of increasing ``the transparency of the ratemaking process.'' 39 U.S.C. 3622(b)(6). It allows assessment of the factors addressing value of service, and by association with the proposed measurement systems, the value of intelligent mail. 39 U.S.C. 3622(c)(1), (8), and (13). Finally, it is important in relation to the rate cap requirements of 39 U.S.C. 3622(d)(1)(A) when analyzing whether quality of service is impacted in order to comply with rate cap requirements.
Section 3651(b)(1)(A) of title 39 requires that the Commission
report to the President and Congress on an annual basis estimates of
the costs incurred by the Postal Service in providing ``universal
service.'' Describing the quality of service afforded a product, both
anticipated and actual, is a necessary element in analyzing what
service is being provided at a given cost. The Postal Service is to
provide the Commission with such information that may, in the judgment
of the Commission, be necessary in completing this report. 39 U.S.C. 3651(c).
IV. Service Performance Measurements Reporting
A. Overview
The Postal Service proposes in its Plan and the Commission adopts for this rulemaking a two level system for reporting service performance consisting of an Annual Report provided at a high level of aggregation and four Quarterly Reports which provide information at a more detailed level. As stated in the Postal Service's Plan at 12:
In accordance with Sec. 3652 of the Postal Accountability and Enhancement Act, the Postal Service is required to report measures of the quality of service on an annual basis. The Postal Service's proposal for service measurement goes far beyond annual reporting and will instead provide quarterly reporting for all marketdominant products, almost entirely at a district level.
Section 3652(a)(2) of title 39 requires, among other things, an
annual analysis of the quality of service ``for each marketdominant product * * *.'' The Postal Service acknowledges this
[[Page 49192]]
requirement and specifically states that it will go beyond what it
perceives as the minimum requirement and provide quarterly reporting
for all market dominant products. See Plan at 12. However, the specific
data items identified in the Postal Service's Plan propose reporting at
a higher level of aggregation, at the class level. This deviation from
what appears to be required was challenged by many commenters in Docket
No. PI20081.\9\ This rulemaking proposes reporting requirements by
product as urged in these comments, which also is consistent with the
Commission's interpretation of the statutory requirements of Sec.
3652(a)(2). To facilitate review of the proposed rules, the most recent
market dominant product list appears in Table VII1Market Dominant Product List as of August 10, 2009 to this rulemaking.
\9\ See comments of Pitney Bowes, Discover Financial Services,
Post/Com/DMA, McGrawHill, and Valpak summarized in Order No. 140 at 3940.
The proposed rules intend to require reporting for all market
dominant products, but also include exceptions for when reporting is
not practicable. For example, in the area of negotiated service
agreements, the rules allow the Postal Service to utilize exceptions to
reporting on individual negotiated service agreements if the Postal
Service can demonstrate that substantially all components of a specific
agreement are already included in the measurement of other products.\10\
\10\ Nonpostal products are another category of products that
may require special consideration. At this time, nonpostal products
are not specifically addressed by this rulemaking other than reserving space for future use.
As discussed in Order No. 140, several mailers request some form of
shapebased reporting.\11\ The Postal Service opposed these suggestions
contending that this is not required for the Commission to carry out
its PAEA regulatory responsibilities. Although the Commission is not
opposed to consideration of shapebased reporting if the need can be
demonstrated at some future date, the rules proposed in this rulemaking
do not reflect shapebased reporting, per se. However, by adhering to
the statutory requirement to report by product, as discussed above, it
should be noted that significant, although imperfect, shapebased reporting will be accomplished.
\11\ See comments of BAC, DFS, MOAA, NPPC, PSA, PostCom/DMA,
Time Warner, Publishers Clearing House, and Valpak and the response of the Postal Service summarized in Order No. 140 at 4041.
The Postal Service proposes in its Plan to report two types of
measurements for FirstClass Mail, Standard Mail, Periodicals and
Package Services: (1) Ontime service performance, and (2) service
variance. Ontime service performance represents the percentage of
mailpieces delivered within the applicable service standard for those
mailpieces. Service variance represents the cumulative percentage of
mailpieces delivered within the applicable service standard plus 1 day,
2 days, or 3 days.\12\ The Postal Service proposes to report ontime
service performance both on an annual and a quarterly basis, and
service variance only on a quarterly basis. The proposed rules adopt these reporting elements.
\12\ In Docket No. PI20081, several mailers expressed an
interest in expanding service variance or ``tailofthemail''
reporting. See Order No. 140 at 4344. However, the Commission is not convinced that additional reporting was justified.
For Special Services, the Postal Service proposes an index to
report as a single number the performance of all Special Services
products, provided on an annual basis. It proposes providing additional
performance detail on a quarterly basis. This rulemaking specifies
reporting at the product level (or, in limited circumstances, down to a
component of a product for products requiring increased visibility) as
required by 39 U.S.C. 3652(a)(2).\13\ The rules propose reporting the
percentage of time that each product (or, in limited circumstances, a
component of a product) meets or exceeds its applicable service standard.
\13\ The Commission is open to consideration of the use of an
``index'' at or below the product level if its use can be justified.
The Postal Service proposes in its Plan reporting service
performance on an annual basis at the National level.\14\ On a
quarterly basis, reporting for domestic FirstClass Mail, Standard
Mail, domestic Package Services, and Post Office Box Service within
Special Services is proposed at the Postal Administrative Area and
District levels, and reporting for international FirstClass Mail,
Periodicals, and international Package Services is proposed at the
Postal Administrative Area level. This rulemaking generally adopts these reporting levels.\15\
\14\ It is unclear in the Plan, but assumed by the Commission,
that the Postal Service contemplated providing National level information on a quarterly basis.
\15\ The Postal Service proposed additional Administrative Area
and District level reporting for certain electronic Special Services
that will not be adopted at this time. The Commission recognizes
that this level of reporting may be required in the future, but
finds it prudent to await further development of the Special Services measurement systems.
Within the Standard Mail class only, the Postal Service proposes in its Plan separate quarterly reporting for Destination Entry and for EndtoEnd mail. The Commission notes that the Postal Service also specifies different service standards for EndtoEnd and for Destination Entry mail within the Periodicals and Package Services classes. See Service Standards. Because the Postal Service and the Commission recognize service performance differences between Destination Entry and EndtoEnd mail in all of the aforementioned classes, the Commission carries this distinction forward in the proposed reporting requirements. This rulemaking incorporates this distinction not only for Standard Mail, but also for the Outside County Periodicals, Bound Printed Matter Flats, Bound Printed Matter Parcels, and Media Mail/Library Mail products.
Depending upon the class of mail and whether the mail is
Destination Entry or EndtoEnd mail, and based on consideration of the
entry facility and the origination/destination ZIP Code pairs, among
other factors, the Postal Service specifies a vast array of service standards. See Table IV1.
Table IV1Service Standards
Service standard ranges (days) Mail class
Endtoend Destination entry
FirstClass Mail.................. 15 N/A
Periodicals....................... 120 18
Standard Mail..................... 322 210
Package Services.................. 220 18 [[Page 49193]]
For domestic FirstClass Mail, the Postal Service proposes in its Plan to separately report overnight, 2day, and a single aggregation of 3, 4, and 5day mail. This rulemaking adopts the FirstClass Mail overnight, 2day, and 3/4/5day reporting groups proposed by the Postal Service.
In Docket No. PI20081, the Commission received comments which suggest further disaggregation of the 3/4/5day report group proposed by the Postal Service.\16\ The proposal suggests two smaller groups, mail subject to the 3day service standard and mail subject to the 4 through 5day service standards. The intent appears to be to segregate mail that either only leaves, only enters, or that never transverses the contiguous United States. The 4/5day service standard group theoretically then could be used as representing service performance for noncontiguous United States mail. This conceivably could provide increased visibility into the service performance of mail traveling, for example, between Alaska or Hawaii and the contiguous United States. \16\ See Comments of PostCom/DMA summarized in Order No. 140 at 41.
The Commission studied this suggestion, but decided against its adoption. The Commission notes that the 3day service standard for FirstClass Mail also is applicable to certain mail that is sent between the contiguous United States and certain ZIP Codes in Alaska, Hawaii, or Puerto Rico, i.e., noncontiguous United States mail. Thus, disaggregating mail subject to the 4/5day service standards from mail subject to the 3/4/5day service standard group does not create a 4/5 day group that is representative of noncontiguous United States mail.
As displayed in Table IV1, the domestic products within the
Periodicals, Standard Mail, and Package Services classes are subject to
a wide range of applicable service standard days. The Postal Service
proposes in its Plan to aggregate all service standard days and report
one measurement for the domestic products within each of these classes.\17\
\17\ The Postal Service's proposal to separately report
Destination Entry and EndtoEnd Standard Mail is recognized above.
The multitude of applicable service standards within the above classes raise issues concerning the appropriate level of aggregation/ disaggregation of service standard days. Mail that is subject to shorter duration service standards is subject to different mail handling in terms of facilities encountered and transportation received than mail subject to longer duration service standards. Too high a level of aggregation results in lost visibility into service performance disparities between mail subject to different handling and service standards. Reporting by individual service standard day could be a solution, which would vastly improve visibility based on these differences. However, it also would raise measurement reliability issues due to the sparse volume of mail subject to certain longer service standards. Producing reliable measurements, providing sufficient visibility into service performance due to differences in handling and service standards, and the feasibility of implementing measurement systems at this time, all must be balanced when proposing reporting rules.
For annual reporting, this rulemaking adopts the Periodicals,
Standard Mail, and Package Services reporting levels proposed by the
Postal Service. The Commission balances this overview level of
reporting by proposing expanded reporting requirements in certain areas
to provide improved visibility within the quarterly reports. For
quarterly reporting, this rulemaking adopts the Postal Service's
proposed service standard aggregations for Periodicals, and the Bound
Printed Matter Flats, Bound Printer Matter Parcels, and Media Mail/
Library Mail products within Package Services. It proposes improvements
in reporting visibility for all products within Standard Mail and the
SinglePiece Parcel Post product within Package Services. For these
products, the rules propose aggregating the multiple service standards
for each product into two separate groups based on the mail facilities
encountered and the transportation received. Specific proposals for
aggregating service standard days appear within the discussion of the individual rules below.
B. Annual Reporting
1. General Considerations
This rulemaking proposes to incorporate the rules for annual reporting of service performance measurements (or achievements) into new subpart AAnnual Reporting of Service Performance Achievements of part 3055Service Performance and Customer Satisfaction Reporting of the Commission's rules of practice and procedure. The rules proposed for incorporation into subpart A appear after the signature of this order. Table VII2Illustrative Annual Report Data Reporting Charts in section VII provides a visualization of the annual data reporting elements proposed by the rules through illustrative examples of data reporting charts. A rulebyrule description of subpart A follows.
Section 3055.1 specifies the general requirement for the Postal Service to file a report on service performance measurements as part of its annual compliance report. See 39 U.S.C. 3652(a)(2)(B)(i).
Section 3055.2 describes the contents of the annual report of service performance achievements. Paragraph (b) of this section directs the reader to specific reporting requirements applicable to each product within a specific class or group. Paragraphs (c) through (g) of this section direct the Postal Service to describe the service standards, performance goals, measurement systems, and statistical methodologies for each product. In the first report produced, the Postal Service will create a baseline description of service performance measurement. The Commission recognizes that the initial report will require significant effort on the part of the Postal Service. However, subsequent annual reports will require the Postal Service only to replicate the previous report incorporating changes from year to year. Paragraph (h) of this section requires the identification of each product, or component of a product, granted an exception from reporting pursuant to Sec. 3055.3, along with a certification that the rationale for originally granting the exception remains valid.
Particular attention should be focused on paragraphs (i) and (j) of
Sec. 3055.2. A significant amount of data will be produced pursuant to
the annual and quarterly reporting rules. The data will be provided at
various levels and forms of aggregation, and provided over different
periods of time. Paragraphs (i) and (j) of this section in effect
require the Postal Service to demonstrate how it performs each
aggregation/disaggregation of data, both between and among the various
reports, and over the various timeframes. The goal is to provide
independent parties the information necessary to be able to replicate
the aggregations/disaggregations made by the Postal Service between and
among the various reports, and over the various timeframes. For
example, this should include the ability to aggregate the data provided
in the quarterly reports up to the level of data provided in the annual
reports. It also should include the ability to aggregate data provided
at the District level, to the Postal Administrative Area level, and to
the National level. The Commission expects that data will be provided in electronic
[[Page 49194]]
format (Excel files are anticipated at this time), with electronic
links and formulas that can be followed in order to duplicate the
Postal Service's aggregation methodologies. This would include
providing volumes and other weighting factors as necessary to perform the required calculations.\18\
\18\ See comments of AMEE and MMA suggesting the inclusion of volume data, summarized in Order No. 140 at 42.
For some products, the measurement of service performance may be cost prohibitive, or a measurement of service would not be meaningful because of the nature of the product. In other instances, the product might be in the form of a negotiated service agreement, which, in fact, is merely a grouping of other products already being measured. Section 3055.3 provides an avenue for the Postal Service to seek an exception from the general requirement to report on the service performance in these instances.
Section 3691(b)(1)(D) of title 39 has as an objective for the Postal Service ``[t]o provide a system of objective external performance measurements for each marketdominant product * * *.'' However, ``with the approval of the Postal Regulatory Commission an internal measurement system may be implemented * * *.'' 39 U.S.C. 3691(b)(2). Order No. 140 approved the approach that the Postal Service is undertaking to implement most of its measurement systems. This approval is subject to continuous review as the Postal Service's systems are developed and implemented to assure that robust measurement systems are eventually put into place. Section 3055.4 of the proposed rules implements the above title 39 requirements. It requires that the Postal Service obtain Commission approval prior to using internal (including hybrid) measurement systems to obtain data for the purpose of reporting service performance measurements. This requirement is applicable to both the annual and quarterly service performance measurement reports.
Section 3055.5 requires the Postal Service to apprise the Commission of all changes to measurement systems, service standards, service goals, and reporting methodologies. The Commission may institute a proceeding to consider change proposals if it appears that the changes might have a material impact on the accuracy, reliability, or utility of the reported measurement, or if the changes might have a material impact on the characteristics of the underlying product.
Section 3055.6 requires the Postal Service to include within its proposals for new or modified market dominant products, proposals for service performance measurement systems, service standards, service goals, data reporting elements, and data reporting methodologies.
Section 3055.7 directs the Postal Service to conduct a special study, every 2 years, to evaluate final delivery service performance in certain locations. The measurement systems that the Postal Service proposes do not appear to capture information on delivery performance; for example, from the processing facility in Anchorage, Alaska to the outer reaches of Alaska; from Honolulu to the neighbor islands of Hawaii; or from San Juan to more distant locations in the Caribbean district. A special study appears appropriate for providing visibility into these areas.
2. FirstClass Mail
Section 3055.20 specifies the annual reporting requirements for all
products within the FirstClass Mail class. For the SinglePiece
Letters/Postcards, Bulk Letters/Postcards, Flats, and Parcels products,
reporting of ontime service performance is to be disaggregated by mail
subject to the overnight, 2day, and 3/4/5day service standards as a
percentage rounded to one decimal place.\19\ For the Outbound Single
Piece FirstClass Mail International and the Inbound SinglePiece
FirstClass Mail International products, ontime service performances
are to be reported at the National level as a percentage rounded to one decimal place.
\19\ The 3/4/5day service standard is an aggregation of the 3
day, 4day, and 5day service standards. The Postal Service is
required to demonstrate how it performs this aggregation, along with
other similar aggregations appearing within other mail classes when describing its data reporting methodologies.
3. Standard Mail
Section 3055.21 specifies the annual reporting requirements for all products within the Standard Mail class. In all instances, ontime service performances are to be reported at the National level for each Standard Mail product as a percentage rounded to one decimal place. 4. Periodicals
Section 3055.22 specifies the annual reporting requirements for all products within the Periodicals class. In all instances, ontime service performances are to be reported at the National level for each Periodicals product as a percentage rounded to one decimal place. 5. Package Services
Section 3055.23 specifies the annual reporting requirements for all products within the Package Services class. In all instances, ontime service performances are to be reported at the National level for each Package Services product as a percentage rounded to one decimal place. 6. Special Services
Section 3055.24 specifies the annual reporting requirements for all products within the Special Services group. In all instances, the percentage of time that each product within Special Services meets or exceeds its performance objective is to be reported at the National level as a percentage rounded to one decimal place.
7. Nonpostal Products
Section 3055.25 is reserved for specific reporting requirements
concerning nonpostal products once these products are added to the market dominant product list.
C. Quarterly Reports
1. General Considerations
This rulemaking proposes to incorporate the rules for quarterly reporting of service performance measurements into new subpart B Periodic Reporting of Service Performance Achievements of Part 3055 Service Performance and Customer Satisfaction Reporting of the Commission's rules of practice and procedure. The rules proposed for incorporation into subpart B appear after the signature of this Order. Table VII3Illustrative Quarterly Report Data Reporting Charts provides a visualization of the annual data reporting elements proposed by the rules through illustrative examples of data reporting charts. A rulebyrule description of subpart B follows.
Section 3055.30 specifies the general requirement for the Postal Service to file a quarterly report on service performance measurement within 40 days of the close of each fiscal quarter.
Section 3055.31 specifies the contents of each quarterly report.
Paragraph (b) of this section directs the reader to specific reporting
requirements applicable to each product within a specific class or
group. Paragraph (c) of this section requires identification of each
product, or component of a product, granted an exception from reporting
pursuant to Sec. 3055.3, along with a certification that the rationale
for originally granting the exception remains valid. Finally, [[Page 49195]]
paragraphs (d) and (e) of this section direct the Postal Service to
demonstrate how it aggregates/disaggregates data to different reporting levels.\20\
\20\ For further discussion on aggregation/disaggregation, see
the discussion of Sec. 3055.2, paragraphs (i) and (j) of this section above.
Section 3055.32 requires the Postal Service to independently report delivery factors when used in computing EndtoEnd service performance. The hybrid measurement system (proposed by the Postal Service for measuring a majority of Postal Service products by volume) measures EndtoEnd service performance in two steps. In the first step, a mail processing factor is developed, which measures the time from the start theclock event to the last recorded mail processing scan. In the second step, a delivery factor is developed which measures the time from the last recorded mail processing scan to actual delivery. The generation of delivery factors raises measurement and statistical issues that must be examined to understand the overall measurement results. Section 3055.32 provides visibility in this area.
2. FirstClass Mail
Section 3055.45 specifies the quarterly reporting requirements for all products within the FirstClass Mail class. In all instances, on time service performances and service variances are to be individually reported for each FirstClass Mail product as a percentage rounded to one decimal place.
For the SinglePiece Letters/Postcards, Bulk Letters/Postcards, Flats, and Parcels products, the rule proposes reporting at the District, Postal Administrative Area, and National levels. Reporting also is to be disaggregated by mail subject to the overnight, 2day, and 3/4/5day service standards.
For the Outbound SinglePiece FirstClass Mail International and Inbound SinglePiece FirstClass Mail International products, the rule proposes reporting at the Postal Administrative Area and National levels.
3. Standard Mail
Section 3055.50 specifies the quarterly reporting requirements for all products within the Standard Mail class. In all instances, ontime service performances and service variances are to be reported at the District, Postal Administrative Area, and National levels for each Standard Mail product as a percentage rounded to one decimal place.
Each Standard Mail product can be considered either Destination
Entry or EndtoEnd mail. The Postal Service has established 2day
through 10day service standards for Destination Entry mail.
Destination Entry mail is separated into two groups for reporting
purposes. The rule proposes reporting an aggregation of mail subject to
the 2day through 4day service standards and an aggregation of mail
subject to the 5day through 10day service standards.\21\ The Postal
Service has established 3day through 22day service standards for End
toEnd mail. EndtoEnd mail also is separated into two groups for
reporting purposes. The rule proposes reporting an aggregation of mail
subject to the 3day through 5day service standards and an aggregation
of mail subject to the 6day through 22day service standards.\22\
\21\ Destination Entry 2day through 4day service standard mail
roughly coincides with DDU and DSCF entered mail. Destination Entry
5day through 10day service standard mail roughly coincides with DBMC and BMC entered mail.
\22\ EndtoEnd 3day through 5day service standard mail
roughly coincides with SCF turnaround, ADC turnaround, and intraBMC
area mail. EndtoEnd 6day through 22day service standard mail
roughly coincides with all other EndtoEnd mail subject to greater transportation needs.
4. Periodicals
Section 3055.55 specifies the quarterly reporting requirements for all products within the Periodicals class. In all instances, ontime service performances and service variances are to be reported at the Postal Administrative Area and National levels for each Periodicals product as a percentage rounded to one decimal place.
The Postal Service has established 1day through 8day service standards for Periodicals mail. The proposed rule requires the reporting of an aggregated number representing mail subject to the 1 day through 8day service standards for each of the Periodicals products.
Performance reporting for the Outside County Periodicals product is to be further disaggregated by Destination Entry and EndtoEnd mail. 5. Package Services
Section 3055.60 specifies the quarterly reporting requirements for all products within the Package Services class. In all instances, on time service performances are to be reported for each Package Services product as a percentage rounded to one decimal place. For reporting purposes, the Package Services products are separated into three groups: (1) SinglePiece Parcel Post; (2) Bound Printed Matter Flats, Bound Printed Matter Parcels, and Media Mail/Library Mail; and (3) Inbound Surface Parcel Post (at UPU rates).
The Postal Service has established 2day through 20day service
standards for the SinglePiece Parcel Post product.\23\ The rule
proposes dividing the multiple SinglePiece Parcel Post service
standards into two groups. It requires the reporting of an aggregated
number representing mail subject to the 2day through 4day service
standards and an aggregated number representing mail subject to the 5
day through 20day service standards.\24\ Reporting is to be provided
at the District, Postal Administrative Area, and National levels.
\23\ The Commission is assuming that SinglePiece Parcel Post
mail is treated as EndtoEnd mail for the purpose of service standards.
\24\ The 2day through 4day service standard mail roughly
coincides with SCF turnaround and intraBMC area mail. The 5day
through 20day service standard mail roughly coincides with all other SinglePiece Parcel Post mail subject to greater
transportation needs.
The Bound Printed Matter Flats, Bound Printed Matter Parcels, and Media Mail/Library Mail products can be considered either Destination Entry or EndtoEnd mail. The Postal Service has established 1day through 8day service standards for Destination Entry mail. The rule proposes reporting an aggregation of all Destination Entry mail subject to the 1day through 8day service standards. The Postal Service has established 2day through 20day service standards for EndtoEnd mail. The rule proposes reporting an aggregation of all EndtoEnd mail subject to the 2day through 20day service standards.
The rule proposes reporting a single service performance number for Inbound Surface Parcel Post (at UPU rates). Reporting is to be provided at the Postal Administrative Area and National levels.
6. Special Services
Section 3055.65 specifies the quarterly reporting requirements for all products within the Special Services group. In all instances, the percentage of time that each product within Special Services meets or exceeds its performance objective is to be reported at the National level as a percentage rounded to one decimal place.
Additional reporting is proposed for several of the 28 services
that form a part of the Ancillary Services product to provide improved
visibility. Separate reporting is proposed for Certified Mail and
Return Receipt because of the importance of these services to customers and their substantial contribution to Ancillary Services'
[[Page 49196]]
revenue. Separate reporting is proposed for Delivery Confirmation
because of the Postal Service's reliance on this service as part of its
measurement system for parcels. Separate reporting is proposed for
Insurance because of consumer interest in the performance of this service.
Additional reporting also is proposed for the Post Office Box Service product. In addition to reporting at the National level, reporting also shall be provided at the District and Postal Administrative Area levels.
In Order No. 140, the Commission identified areas within the Special Services measurement systems that required improvement. In section V.Special Services Measurement Systems that follows, the Commission analyzes the Postal Service's proposals for improving certain Special Services measurement systems and provides further detail on reporting requirements for these services.
7. Nonpostal Services
Section 3055.70 is reserved for specific reporting requirements concerning nonpostal products once these products are added to the market dominant product list.
V. Special Services Measurement Systems
In Order No. 140, the Commission reviewed the Postal Service's Plan to use various measurement systems for measuring service performance for market dominant products. The Commission generally agreed with the approach that the Postal Service proposed for most products, except for certain products that fell within Special Services.
On a general level, the Commission's recommendation for Special Services was ``that the Postal Service determine the attributes of each [special] service including the customer's reasonable expectations of what is being purchased, and then design measurement systems considering these parameters.'' Order No. 140 at 3435.
The Commission specifically commented on Special Services that include a barcode scan. The proposed measurement systems for Special Services that include a barcode scan were limited to only measuring the time between when delivery information was collected to when information was made available to the customer. This did not appear to be representative of the services that a customer had purchased or would expect, when considering that the proposed measurement systems would not pick up failures such as not scanning a mailpiece at delivery or attempted delivery, or a failure of the scanning equipment itself.
The Commission used Delivery Confirmation to demonstrate its specific concerns with the various barcode scan measurement systems. The Commission concluded that ``[a]t a minimum, the Postal Service must incorporate into its proposed measurement systems for Delivery Confirmation and other similar electronic systems a factor for the volume of services purchased versus the volume of services successfully completed.'' (Footnote omitted.) Id. at 34. The expectation is for this recommendation to be incorporated into all applicable barcode scan based systems.
The Commission also focused on Certified Mail, Post Office Boxes, and Return Receipt in part because they account for nearly 70 percent of overall Special Services revenue. Id. at 33. The concerns with Certified Mail paralleled the concerns for Delivery Confirmation as presented above. The measurement approach proposed for Post Office Boxes was found acceptable. Id. at 35. Finally, the Commission expressed concerns with the proposed measurement system for Return Receipt. The Postal Service proposed to only measure electronic Return Receipt by using the same measurement system as it proposed for Delivery Confirmation. However, the vast majority of Return Receipt service is provided through delivery of the green Return Receipt card, which the Postal Service did not propose to measure in any way.
Order No. 140 concluded by approving the measurement approaches for Post Office Box Service, Insurance claims processing, Postal Money Order inquiry processing, and Address List Services. However, because of the concerns summarized above, it directed the Postal Service to ``proceed with external measurement of service performance for Certified, Return Receipt, and Delivery Confirmation or develop an alternative internal measurement system by June 2009.'' Id.
The Postal Service responded to the Commission's concerns on May 15, 2009 in a letter from Thomas G. Day, Senior Vice President, Intelligent Mail and Address Quality, United States Postal Service, to Dan G. Blair, Chairman, Postal Regulatory Commission.
Because of the similarities of the proposed measurement systems for Certified Mail and Delivery Confirmation, the Postal Service address both systems together. The Postal Service proposes to modify the measurement systems as suggested by the Commission.
Accordingly, the Postal Service has modified its methodology for
calculating ontime deliveryrelated information availability for Certified Mail and Delivery Confirmation services. In the
denominator for calculating the percentage of pieces for which
deliveryrelated information was made available within the 24hour
service standard, the Postal Service will include all pieces for
which the delivery information service was purchased, irrespective
of whether there is a deliveryrelated scan corresponding to each
acceptance scan. The numerator will include only those pieces for
which there was both a delivery scan and availability of delivery
information within 24 hours of that delivery scan. Thus, for the
universe of pieces for which there is an acceptance scan, the
service measurement performance score will reflect the percentage of
such pieces for which deliveryrelated information is obtained, and
then provided to the sender within 24 hours. A failure to obtain
delivery scan will be regarded as a Certified Mail or Delivery Confirmation service failure.
See May 15, 2009 Letter from Thomas G. Day, Attachment at 3. (Emphasis omitted.)
The Commission finds that the Postal Service's modified approach to measuring Certified Mail and Delivery Confirmation service is an improvement over its original proposals and should produce results that more accurately measure the expectations of customers purchasing the services. The Commission reiterates its expectation that the proposed solutions for Certified Mail and Delivery Confirmation service are to be incorporated into all similar barcode scanbased systems, where applicable.
The Postal Service proposes two systems for measuring the hardcopy green card Return Receipt service. First, it proposes to undertake an annual special study by employing ``an external vendor to periodically test transit times from induction to delivery for hard copy Return Receipt cards, using anonymous dropper/reporters who would drop the cards in collection boxes and other induction points throughout the postal network to simulate the deposit of Return Receipt green cards being mailed back to senders.'' Id. at 6. Second, it ``proposes to qualitatively measure hard copy Return Receipt customers' experiences versus their expectations.'' Id. at 8. This is proposed to be done through modification of existing Postal Service customer surveys.
It is noted that the Postal Service expresses concerns with
implementing a green card Return Receipt service measurement system.
First, it cites significant costs associated with making adjustments to existing systems or to
[[Page 49197]]
developing external measurement systems. Second, the Postal Service
examines the feasibility of applying barcodes to the green cards, but
dismisses this idea because it might cause a fundamental change in the
product with cost and fee implications. Third, it examines an EXFC
based approach, but determines that the approach that it eventually
proposes is more streamlined and economical. Finally, it discusses
problems with the potential lag times involved in providing the
service, and the inability of the Postal Service to ensure that the green cards are properly completed.
The Commission still finds the Postal Service's proposals for measuring the green card Return Receipt service lacking by not measuring the service expectations of a customer purchasing the service. The proposal to measure green card transit times by dropping green cards into the system does little more than measure the transit time of a FirstClass Mail card. This information is readily available. The Postal Service proposal to survey customer satisfaction with green card Return Receipt service is a measure of customer satisfaction and not service performance. Reporting of customer satisfaction is reported separately under the PAEA.
Two sections in the Domestic Mail Manual appear particularly applicable to the expectations of customers purchasing green card Return Receipt:
The mailpiece may not be opened or given to the recipient before the recipient signs and legibly prints his or her name on the delivery receipt (and return receipt, if applicable) and returns the receipt(s) to the USPS employee.
DMM section 508.1.1.7(b).
A notice is left for a mailpiece that cannot be delivered. If the piece is not called for or redelivery is not requested, the piece is returned to the sender after 15 days (5 days for Express Mail, 30 days for COD) unless the sender specifies fewer days on the piece.
DMM section 508.1.1.7(f).
Paragraph 508.1.1.7(b) specifies what action the purchaser of the service expects from the Postal Service when presenting a mailpiece to a potential recipient. Simplistically, the recipient does not obtain possession of the mailpiece prior to the Postal Service employee obtaining a signature on the green card. Paragraph 508.1.1.7(f) specifies what action the purchaser of the service expects from the Postal Service if a signature cannot be obtained. It also places time constraints (not including transit times) on the performance of the service that also can be used in a measurement system.
The Commission recommends that the Postal Service develop a measurement system taking the above into consideration. An EXFCbased system would appear appropriate. Outgoing EXFC mail could be seeded with green Return Receipt cards. After mailing, a Postal Service employee would present the mailpiece to the potential recipient for signature. If a signature is obtained, the Postal Service employee would deposit the green card into the mail system for return to the sender. The original sender would record return of the green card and verify that it has been signed, if and when the card is received. If a signature is not obtained within the applicable timeframe, the Postal Service employee would return the unsigned mailpiece to the original sender. The original sender would record return of the mailpiece, if and when the mailpiece is received. A 25 to 30day time limit could be placed for all events to occur; otherwise, a service failure would be recorded. On a quarterly basis, the Postal Service could report: (1) The number of EXFC seed mailpieces sent; (2) the percentage of green cards properly completed and returned (passing); (3) the percentage of green cards not properly completed, but returned (failure); (4) the percentage of mailpieces returned without a green card signature (passing); and (5) the percentage of the time the service receives a passing grade. This would be with respect to the applicable time limits as discussed above. On an annual basis, the Postal Service would report the percentage of the time the service receives a passing grade as part of the Ancillary Services score.
Many variations of the Commission's suggestion are possible. The
Postal Service is instructed to provide a response, or suggestions of its own, in its reply to this rulemaking.
VI. Reporting of Customer Satisfaction
A. General Considerations
This rulemaking proposes to incorporate the rules for reporting of
customer satisfaction into new subpart CAnnual Reporting of Customer Satisfaction of Part 3055Service Performance and Customer
Satisfaction Reporting of the Commission's rules of practice and
procedure. The rules proposed for incorporation into subpart C appear
after the signature of this Order. Table VII4Illustrative Customer
Satisfaction Data Reporting Charts provides a visualization of the
annual data reporting elements proposed by the rules through
illustrative examples of data reporting charts. A rulebyrule description of subpart C follows.
Section 3055.90 specifies the general requirement for the Postal Service to file a report on customer satisfaction as part of its annual compliance report, unless more frequent reporting is specifically requested. See 39 U.S.C. 3652(a)(2)(B)(ii).
B. Section 3055.91Customer Access to Postal Services
Measuring customer access to postal services is an important aspect
of customer satisfaction and a critical aspect of evaluating universal
service. Section 3055.91 requires providing information covering four
areas of customer access. First, it requests information on the number
and types of post offices servicing the public. This also includes
information on the number of post offices closed and the number of post
offices subject to emergency suspensions during the year. This
information is to be disaggregated by the types of post offices as
appearing in the Postal Service's Annual Report. Second, it seeks
information pertaining to the number and type of delivery points
accessed by the Postal Service. Third, it requests information
pertaining to the number of collection boxes accessed by the Postal
Service. Finally, it seeks information on customer wait time in line for retail services.\25\
\25\ Statistics on wait time in line are of general interest and
are to be reported separately as required by this section. It is
understood that these statistics may be obtained through the Mystery
Shopper Program, or other similar surveys, and also reported elsewhere.
The rules propose reporting of customer access to postal services on an annual basis. While this frequency of reporting may suffice given a longterm outlook, customer access is currently a high visibility issue. News reports appear almost daily concerning potential post office closings and the removal of collection boxes. This has generated significant consumer and congressional interest evident by frequent inquiries received by the Commission. As with any data reporting requirement, the Commission also is aware that reporting requirements impose costs on the postal system. Additional systems may have to be put in place to obtain and report the requested customer access data items if such systems do not already exist.
As a compromise to obtaining current information and limiting long
term costs, the Commission suggests that in the short term, the Postal
Service provide customer access data items on a quarterly basis. Once
the current decline in mail volume ebbs and the Postal Service reaches its new state of equilibrium, annual reports should
[[Page 49198]]
suffice. This compromise would provide the Commission with the
immediate information that it needs to be responsive to consumers and
Congress without imposing undue costs or unnecessary burden on the
Postal Service in the long run. The Commission seeks comments from the
Postal Service and others on how best to keep the Commission apprised of these issues such that the Commission can fulfill its
responsibilities in a knowledgeable manner.
C. Section 3055.92Customer Satisfaction Surveys
The Postal Service regularly solicits feedback from its customers
through a series of customer satisfaction surveys. The Postal Service
has asserted that it intends to redesign its Customer Satisfaction
Measurement Survey to meet the requirements of the PAEA and to generate
customer satisfaction data on a productbyproduct basis.\26\ Any
enlightened business will find it good practice to stay current on its
customers' preferences and needs, including how its customers perceive
existing product offerings and services. Properly obtaining and
analyzing information from customers will prove extremely valuable in
evaluating customer satisfaction as required by the PAEA, and as a
necessary good business practice. Because product offerings and
services along with customer perceptions will change over time, the
form and content of customer satisfaction surveys also must change over
time. Given the Commission's independent perspective and its role in
providing an alternative avenue of obtaining customer input on postal
services, the Commission offers its assistance to ensure that future
consumer surveys produce reliable and meaningful information.
Participation in this process may provide insight into more appropriate
ways to report on customer satisfaction. The Postal Service is invited
to comment on any future role the Commission might consider in this area.
\26\ Docket No. PI20081, Reply Comments of the United States Postal Service, February 1, 2008, at 11.
Section 3055.92 requires the Postal Service to file with the Commission a copy of each type of survey instrument used in the preceding fiscal year, and to report a summary of the information obtained, on an annual basis. Where the Postal Service solicits information through multiple choice questions, it is required to provide additional detail by providing the number of responses obtained for each possible response. The summary of information obtained also must include a description of the customer type targeted by each distinct type of survey instrument, and statistics on the number of surveys initiated and the number of surveys returned to the Postal Service.
D. Section 3055.93Mystery Shopper Program
The Postal Service currently conducts a Mystery Shopper Program to evaluate the performance of its retail postal facilities. The Commission has been made aware that the information gathered from this program is summarized and reported quarterly to Postal Service management through a National Executive Summary Report.
The importance of the Postal Service obtaining information on how its services are being provided is no less important than obtaining information on customer perceptions as discussed above concerning the customer satisfaction surveys. The Commission is aware that the Mystery Shopper Program is a management tool for developing proprietary information. The Commission also is aware of the necessity that the ``mystery'' of the program be maintained. These factors suggest that confidential treatment consistent with 39 CFR part 3007 will be appropriate for certain information developed by this program.
Section 3055.93 seeks information obtained from the Mystery Shopper Program. It requires the Postal Service to file a copy of the National Executive Summary Reports on a quarterly basis, along with each type of survey instrument used in preparing each report. The Postal Service is invited to identify any alternative obtainable information on its performance at retail facilities relevant to customer satisfaction that might serve as a satisfactory substitute.
E. Future Data Reporting Item
In Docket No. N20091, the Postal Service provided information on
alternative access channels for obtaining postage and certain postal
services. The Postal Service's response to PR/USPST18 provides
percentages of revenues obtained through various ``brick and mortar''
and alternative access channels.\27\ The Postal Service's response to
PR/USPST11 provides a comparison of products that can be purchased in
brick and mortar facilities and products that can be purchased online.\28\
\27\ Responses of United States Postal Service Witness VanGorder
to Public Representative Interrogatories PR/USPST115, and 7(cd), 8, July 27, 2009.
\28\ United States Postal Service Notice of Errata in Filing of
Response of Witness VanGorder to Public Representative Interrogatory PR/USPST11(a) [Errata], July 28, 2009.
The Postal Service may find that reporting of this information will
provide a more balanced view of the current status of customer access
to postal services. Reporting also may provide another avenue to
promote the use of alternative access channels. The Commission seeks
comments on the benefits of reporting this aspect of customer access
and any proposal that the Postal Service may have on what and how any related data items can be reported.
VII. Supporting Information
Table VII1Market Dominant Product List as of August 10, 2009 Organizational class or group Products
FirstClass Mail............. SinglePiece Letters/Postcards. Bulk Letters/Postcards.
Flats.
Parcels.
Outbound SinglePiece FirstClass Mail International.
Inbound SinglePiece FirstClass Mail International.
Standard Mail (Regular and High Density and Saturation Letters. Nonprofit).
High Density and Saturation Flats/ Parcels.
Carrier Route.
Letters.
Flats.
[[Page 49199]]
Not FlatMachinables (NFMs)/Parcels. Periodicals.................. Within County Periodicals.
Outside County Periodicals.
Package Services.........
FOR FURTHER INFORMATION CONTACT
Stephen L. Sharfman, General Counsel, 2027896820 and stephen.sharfman@prc.gov.