39 CFR Part 111
Experimental Outside-County
Periodicals Co-Palletization Classification
AGENCY: Postal Service.
ACTION: Interim rule.
SUMMARY: This
interim rule provides standards for a Postal Service experiment testing whether
additional rate incentives would encourage the co-palletization and
drop-shipment of currently sacked bundles of individual Periodicals
publications. This interim rule will implement two additional per-piece
discounts for co-palletization of Periodicals publications that otherwise would
have been prepared in sacks prior to co-palletization. The additional per-piece
discounts, resulting from Docket No. MC2002-3 at the Postal Rate Commission,
would apply to pieces in bundles placed on SCF and ADC pallets that are drop-shipped
to either a destination area distribution center (DADC) or a destination
sectional center facility (DSCF). This interim rule includes procedures for
preparing and documenting co-palletized mailings and for requesting approval to
participate in the experiment.
DATES: This interim rule is
effective [DATE OF PUBLICATION]. Applications for participation in the
experiment will be available beginning February 3, 2003. The starting date for
the experiment is April 20, 2003. Comments on the standards must be received on
or before [30 DAYS FROM DATE OF PUBLICATION].
ADDRESSES: Written
comments should be mailed or delivered to the Manager, Mail Preparation and
Standards, U.S. Postal Service, 1735 N. Lynn St., Room 3025, Arlington, VA
22209-6037. Copies of all written comments will be available for inspection and
photocopying at USPS Headquarters Library, 475 L’Enfant Plaza, Washington, DC,
between 9 a.m. and 4 p.m., Monday through Friday.
FOR FURTHER INFORMATION
CONTACT: Joel Walker, 703-292-3652; jwalke13@email.usps.gov.
SUPPLEMENTARY INFORMATION: The
Postal Service offers certain worksharing incentives in the form of discounts
to encourage palletization and drop-shipping of Periodicals mailings.
Co-palletization allows mailers to combine separately presorted bundles of
different titles and editions on pallets to achieve the minimum pallet weight
required to take advantage of current pallet and drop-shipment discounts for
Periodicals mail (e.g., 250 pounds of mail to a destination ADC). However, many
publishers of small-circulation publications do not choose to take advantage of
this opportunity due to the increased preparation costs associated with
co-palletization. [Note: A group of
flats presorted together to a common destination is currently defined as a
“package” in the Domestic Mail Manual. However, packages in this context are
usually referred to as “bundles” by the mailing industry, as well as many
postal employees, and will be referred to as such throughout this document.]
Because mail prepared in sacks
accounts for a disproportionate amount of the Postal Service’s costs for
processing Periodicals, the Postal Service designed an experiment to test
whether an additional discount would encourage the co-palletization of mail
that would otherwise be prepared in sacks. Eligibility requires the
co-palletized mail to be prepared on ADC or SCF pallets that are drop-shipped
to DADCs or DSCFs. The primary beneficiaries of this incentive should be
smaller circulation publications, for which, in some cases, complete mailings
are now in sacks. Some smaller portions of larger mailings (sometimes referred
to as “residual” or “tail of the mail”), as well as smaller circulation
versions, editions, and supplemental mailings of large circulation publications
could also qualify under the experiment. The objective of the additional
discount is to move mail from origin-entered sacks to drop-shipped pallets.
On September 26, 2002,
pursuant to 39 U.S.C. § 3623, the Postal Service filed with the Postal Rate
Commission a request for a decision recommending an experimental
co-palletization classification, with associated discounts, for Outside-County
Periodicals. The request was designated as Docket No. MC2002-3 by the
Commission. The Commission recommended the experimental classification and
discounts on December 20, 2002. This recommendation was approved by the
Governors on January 6, 2003, and the Board of Governors set April 20, 2003, as
the anticipated implementation date for the experiment, which is to last two
years.
This experiment provides additional
per-piece discounts to co-palletized Periodicals that cannot be palletized
currently because of volume and density. The discounts will be available for
pieces in Periodicals mailings and mailing segments that are currently prepared
in sacks that, as a result of co-palletizaton, are prepared on ADC or SCF
pallets and are drop-shipped to DADCs and DSCFs.
For mail that otherwise
would have been prepared in sacks under the original presort for the mailing
(before co-palletization), a new per-piece discount of $0.007 would be
available for bundles on ADC and SCF pallets entered at destination ADCs. For
SCF pallets drop-shipped to destination SCFs, the new per-piece discount would
be $0.01. The discounts do not apply to mail prepared on any other pallet
level. While mailers will be expected to prepare pallets of at least 250
pounds, the new discount would be available for pallets weighing less than 250
pounds. Less than 250-pound pallets (except overflow pallets) would not be
eligible for the existing pallet discounts (e.g., $0.015 for drop-shipped mail
on pallets of 250 or more pounds).
Co-palletization will
consist of bundles of mail that remain intact (before and after
co-palletization) and are moved from sacks (before co-palletization) to either
ADC or SCF pallets to be drop-shipped to the appropriate DADC or DSCF. Mail
that moves from an ADC pallet before co-palletization (e.g., 250 or more pounds
to an ADC) to an SCF pallet as a result of co-palletization would not be
entitled to either of the new discounts.
The following explains the Periodicals mail types that could
be eligible for the experimental co-palletization discounts:
·
Small circulation
publications.
·
Residual volume of
independently presorted versions of publications, as well as editions of
current issues of larger circulation publications for those destinations where
there is insufficient volume to prepare an ADC pallet of at least 250 pounds.
·
Supplemental mailings
of large circulation publications.
·
Multiple titles or
multiple versions of a publication that are presorted together into bundles
through a selective binding operation if movement of the presorted bundles
(created as a result of selective binding) is from sacks to co-pallets.
Co-palletized pieces with less than 250 pounds per title or
edition per ADC destination, if independently presorted, could qualify for the
co-palletization discounts. Co-palletized pieces with less that 250 pounds of
mail per title or edition within an ADC remaining after preparing SCF pallets
could qualify for the co-palletization discounts because this mail otherwise
would have been prepared in sacks. Mailers may build upon originally presorted
SCF and ADC pallets, but only the co-palletized pieces with less than 250
pounds per title or edition per ADC destination, if independently presorted,
would qualify for the co-palletization discounts.
Other drop-ship and
palletization incentives available on the current rate schedule would apply to
all the pieces based on their eligibility (e.g., drop-ship discounts and pallet
discounts).
Because co-palletized
volumes are difficult to predict, during the experiment co-palletized mail will
not be required to be placed on the finest level pallet possible. For example,
if a co-palletized ADC pallet contains more than 500 pounds to a particular
SCF, an SCF pallet will not be required. Mailers and consolidators will be
encouraged to periodically reevaluate mail volumes for SCF/ADC destinations to
determine whether additional SCF pallets could be created on a regular basis to
maximize presort and worksharing benefits.
The Postal Service recognizes that there is a
relatively small volume of mail that is currently either co-palletized or
co-mailed and drop-shipped. Consolidators who already drop-ship co-palletized
volume are eligible for the additional discounts if the standards outlined
below are met.
The Postal Service will
require documentation (summarized for each title and identified by edition,
version, or segment) that profiles mailings before co-palletization, to
substantiate that without co-palletization the mail would have been prepared in
sacks (e.g., ADC pallets of 250 or more pounds for any individual title,
independently presorted version, or selectively bound pool, could not have been
made). Supplemental mailings prepared after, and separate from, the original
mailing, would be treated as a separate title and would have to meet the same
requirements for pieces to be eligible for the additional discounts.
The mailer or consolidator must provide documentation of
the mail both before and after co-palletization (e.g., mail.dat files that can
be printed, if necessary), relating only to the mail that is co-palletized. The
“before” documentation must be in files that permit easy identification of
mailings (e.g., by job ID, segment ID, and container summary) included in the
co-palletization program separate from mailings that are not included in the
program. The “after” documentation must identify publications or segments with
250 or more pounds to an ADC on pallets (mail that does not qualify for added
co-palletization incentives) separately from volumes of other publications or
segments with less than 250 pounds that do qualify for the incentives.
Documentation must be prepared by title and version, segment, or edition; or by
codes representing each title or version, segment, or edition. The mailer or
consolidator will output a new file for the mail after co-palletization showing
how the mail was presorted and where it was entered. Data in the “after”
co-palletization files must be easily reconciled with the “before” files to
validate that proper postage has been paid for all pieces.
The Postal Service is issuing a new postage statement that
includes the new co-palletization discounts. Periodicals mailers must use this
postage statement for mailings that qualify for and claim the new discounts.
Publications mailed under the CPP program may be included
as part of a co-palletized mailing. Publishers may elect to (1) remove the
co-palletized portion of a mailing job from the CPP consolidated postage
statement and pay postage at the consolidation point, or (2) provide, to the
preparer of the consolidated postage statement, information about the
co-palletized portion of their mailing to be included on the consolidated
postage statement submitted to the New York Rates and Classification Service
Center.
Publishers that co-palletize multiple editions of the
same publication must submit a consolidated postage statement and register of
mailings.
Data Reporting
Over the
course of the experiment, mailers and consolidators must provide the Postal
Service with appropriate data regarding publication titles that include pieces
for which the discounts are claimed. The purpose of collecting these data is to
provide a measure of the experiment’s effectiveness. The Postal Service intends
to provide participants with details regarding the frequency and methodology
for data reporting prior to implementation of the experiment and expects to
provide an easily accessible vehicle for reporting via the Internet or email.
Such data will, in
aggregated form not identifying particular mailings or publications, be
reported also to the Postal Rate Commission under the terms of its
recommendation in Docket No. MC2002-3 and may be necessary for preparation of
any request for future related permanent classification changes.
Participants must provide the following data to the
Postal Service monthly in spreadsheet format (a model spreadsheet is shown in
Exhibit A):
1.
Number
of titles receiving one or both of the co-palletization discounts.
2.
Number
of sacks that would have been prepared without co-palletization, as well as the
weight and the number of addressed pieces that would have been in these sacks.
3.
Number
of pallets that would have been prepared without co-palletization, as well as
the weight and the number of addressed pieces that would have been on pallets.
4.
Number
of sacks prepared after co-palletization, as well as the weight and the number
of addressed pieces in these sacks.
5.
Number
of pallets containing mail qualifying for the ADC co-palletization discount
(both new pallets and existing pallets built upon), as well as the weight and
the number of addressed pieces receiving the ADC discount on both of these
types of pallets.
6.
Number
of pallets containing mail qualifying for the SCF co-palletization discount
(both new pallets and existing pallets built upon), as well as the weight and
the number of addressed pieces receiving the SCF discount on both of these
types of pallets.
Parties interested in participating
as consolidators in the experiment must request approval from the Postal
Service. Requests must be sent to the Manager, Mail Preparation and Standards,
at 1735 N. Lynn St., Room 3025, Arlington, VA 22209-6037. The request must be
accompanied by the following information, which will be treated as confidential
by the Postal Service:
1.
A completed
application form. Application forms will be available from the Manager, Mail
Preparation and Standards, beginning February 3, 2003. Application forms may be
requested via email to jwalke13@email.usps.gov.
2.
A process map and
narrative describing mail movement from production through the co-palletization
process to dispatch to destination entry postal facilities.
3.
Samples of presort
documentation (before and after co-palletization), and a description of when
and how presort documentation and postage statements are generated.
4.
An explanation of how
data for mailings included under the co-palletization experiment will be
collected and reported to the Postal Service, including whether the model
spreadsheet provided by the Postal Service can be used.
5.
A list of the
publications to be included in the test initially and evidence that each
publication has obtained the appropriate authorizations at the office(s) where
mailings will be verified and postage paid. If the applicant is not a printer
and/or is consolidating publications for other printers, a list of these
printers must also be included with the application. If the location where mail
will be consolidated currently does not have a detached mail unit (DMU),
arrangements must be made to establish one with the local post office
responsible for the acceptance and verification of mailings.
Requests to participate will be accepted beginning February
10, 2003. Applicants meeting all requirements for the co-palletization test
will receive a 90-day conditional authorization. Final approval will be given
after the successful completion of the 90-day conditional period.
The effective date of implementation is April 20, 2003.
Accordingly, the Postal Service hereby adopts the following
regulations on an interim basis. Although exempt from the notice and comment
requirements of the Administrative Procedure Act (5 U.S.C. 410 (a)), the Postal
Service invites comments on the following revisions to the Domestic Mail
Manual, incorporated by reference in the Code of Federal Regulations. See 39
CFR part 111.
1.
The authority
citation for 39 CFR part 111 continues to read as follows:
Authority: U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 3001-3011,
3201-3219, 3403-3406, 3621, 3626, 5001.
2.
Amend the following
sections of the Domestic Mail Manual (DMM) as set forth below:
G000 The USPS and
Mailing Standards
* * * * *
* * * * *
[Add new G092 to read as follows:]
1.0 ELIGIBILITY
1.1 Description
The
standards in G092 apply to mailings that are produced by mailers and
consolidators who are approved to participate in the Outside-County Periodicals
Co-Palletization Drop-Ship Classification experiment.
1.2 Rate Application
The
Outside-County Co-Palletization Drop-Ship Classification discounts apply to
pieces meeting the standards in G092.
1.3 Basic Standards
The
basic standards for co-palletized mailings are as follows:
a. Each mailing must consist of at least two
different Periodicals publications or two different editions, segments, or
versions of a Periodicals publication.
b. Each mailing must be presented with the
correct postage statement(s). Mailings consisting of different Periodicals
publications must be accompanied by a separate postage statement for each
publication. Mailings consisting of different editions or versions of the same
Periodicals publication must be accompanied by one consolidated postage
statement and a register of mailings.
c. Each mailing must meet the documentation
and postage payment standards outlined in 2.0 and P200.
d. Each mailing must be entered and postage
paid at the post office where consolidation takes place, except that postage
for publications authorized under the Centralized Postage Payment (CPP) system
may be paid to the New York Rates and Classification Center (RCSC). Each
publication included in a mailing under these standards must be authorized for
original entry or additional entry at the post office where the consolidated
mailing is entered.
1.4 Discount Eligibility
To
be eligible for one of the discounts, mailpieces must be:
a. Part
of a Periodicals mailing meeting the standards in M200, M820, or M900.
b. Part
of a mailing segment with less than 250 pounds per title or version per ADC
destination, if independently presorted. This includes mail for an ADC service
area that remains after finer levels of pallets are prepared.
c. Prepared
as bundles (packages) on pallets under M041 and M045, or under M900.
d. Prepared
on either an ADC or SCF pallet of co-palletized pieces. Mailers may build on
ADC or SCF pallets of 250 or more pounds prepared as part of the original
presort. However, the pieces originally on these pallets (250 or more pounds
per title or edition) do not qualify for the co-palletization discounts.
e. Drop-shipped
to the appropriate DADC or DSCF.
2.0 DOCUMENTATION
Each
mailing must be accompanied by documentation meeting the standards in P012, as
well as any other mailing information requested by the Postal Service to
support the postage claimed (e.g., advertising percentage and weight per copy).
Documentation must be presented by title and version, segment, or edition; or
by codes representing each title and version, segment, or edition included in
the co-palletized mailing. In addition, documentation for the co-palletized
mailing must:
a.
Upon
request, include presort reports showing how the pieces would have been
prepared prior to co-palletization.
b.
Include presort and
pallet reports showing how the co-palletized pieces are prepared and where they
will be entered (DADC or DSCF).
c. Distinguish
publications or segments that do not qualify for the co-palletization discounts
(e.g., because there are 250 or more pounds to an ADC destination) from those
that do qualify for the discounts.
d. Allow
easy reconciliation with reports prepared to reflect how mail would have been
prepared prior to co-palletization if requested to verify compliance with
standards for discount eligibility.
e. Provide the following data in spreadsheet
format (using the model spreadsheet provided by the Postal Service):
(1) Number of titles
receiving one or both of the co-palletization discounts.
(2) Number of sacks that
would have been prepared without co-palletization, as well as the weight and
the number of addressed pieces that would have been in these sacks.
(3) Number of pallets that
would have been prepared without co-palletization, as well as the weight and
the number of addressed pieces that would have been prepared on pallets.
(4) Number of sacks prepared
after co-palletization, as well as the weight and the number of addressed
pieces in these sacks.
(5) Number of pallets
containing mail qualifying for the ADC co-palletization discount, as well as
the weight and the number of addressed pieces receiving the ADC discount on
these pallets.
(6) Number of pallets
containing mail qualifying for the SCF co-palletization discount, as well as
the weight and the number of addressed pieces receiving the SCF discount on
these pallets.
3.0 DISCOUNTS
The
following discounts are available:
a. For
pieces sorted to an SCF or ADC pallet of 250 or more pounds and drop-shipped to
the appropriate DADC: $0.007 per piece.
b. For
pieces sorted to an SCF pallet of 250 or more pounds and drop-shipped to the
appropriate DSCF: $0.01 per piece.
c.
Co-palletized pieces
sorted to overflow DSCF or DADC pallets qualify for the corresponding
co-palletization discount.
d.
Co-palletized pieces
sorted to ADC pallets weighing between 100 and 250 pounds and drop-shipped to
the appropriate DADC: $0.007per piece.
4.0 REQUEST TO PARTICIPATE
A mailer or consolidator may request approval to
mail in the experimental Outside-County Periodicals Co-Palletization Drop-Ship
test by submitting a written request to the Manager, Mail Preparation and
Standards. The request must be accompanied by the following:
a.
A completed
application form (available from the Manager, Mail Preparation and Standards).
b.
A process map and
narrative demonstrating how and where presort and co-palletization reports
(including “before” and “after” data) are created as they relate to mail
movement and consolidation of packages to be co-palletized. The map and
narrative must also describe mail movement from production through the
co-palletization process to dispatch to destination entry postal facilities.
c. Samples
of all required documentation that must be provided at the time of mailing,
including “before” and “after” reports and postage statements. The sample reports
must demonstrate:
(1) How the co-palletized portion of the mailing is
segregated from other mailing segments on the “before” reports.
(2) How mailing jobs, mailing segments, and containers will
be identified in both “before” and “after” reports to allow reconciliation of
the reports.
(3) How pieces appearing on the “after” reports that qualify
for the co-palletization discounts (mailing segments with less than 250 pounds
to an ADC) are differentiated from those that do not (mailing segments with 250
or more pounds to an ADC).
d. An
explanation of how data for mailings included under the co-palletization
experiment will be collected and reported to the Postal Service, including
whether the model spreadsheet provided by the Postal Service can a copy of the
spreadsheet that will be used.
e. An initial list of the publications to be
included in the test and evidence that each publication has obtained the
appropriate additional entry authorizations at the office where mailings will
be verified and postage paid. The list must indicate if the publications are
authorized under the Centralized Postage Payment (CPP) System. If the applicant
is not a printer and/or is consolidating publications for other printers, a
list of these printers must be included with the application.
5.0 DECISION ON REQUEST
The Manager, Mail Preparation and Standards,
approves or denies a written request to participate in the experimental
Outside-County Periodicals Co-Palletization Drop-Ship Classification test. If
the application is approved, the mailer or consolidator will be notified in
writing by the Manager, Mail Preparation and Standards. Initial approval is for
a conditional 90-day period. When the mailer or consolidator has demonstrated
the ability to prepare and enter mailings under the standards in G092, final
authorization will be granted. If the application is denied, the mailer or
consolidator may file at a later date or submit additional information needed
to support the request.
6.0 POSTAL SERVICE SUSPENSION
The
Manager, Mail Preparation and Standards, may suspend at any time an approval to
participate in the experiment when there is an indication that postal revenue
is not fully protected. The manager will notify the participant in writing of
the decision. The suspension becomes effective upon the mailer’s receipt of the
notification.
* * * * *
An appropriate amendment to 39 CFR
111 to reflect the changes will be published if the interim rule becomes final.
Attorney, Legislative
[END DOCUMENT]