New Standards for Domestic Mailing Services, 15366-15442 [07-1500]

Agencies

• Postal Service

[Federal Register Volume 72, Number 61 (Friday, March 30, 2007)]
[Rules and Regulations]
[Pages 15366-15442]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 07-1500]



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Part IV





Postal Service





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39 CFR Part 111



New Standards for Domestic Mailing Services; Final Rule

Federal Register / Vol. 72, No. 61 / Friday, March 30, 2007 / Rules 
and Regulations

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POSTAL SERVICE

39 CFR Part 111


New Standards for Domestic Mailing Services

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: In this final rule the Postal Service provides new mailing 
standards to support most of the pricing change recommended by the 
Postal Regulatory Commission and approved by the Governors of the 
United States Postal Service. We will implement most of the new prices 
on May 14, 2007. We will implement new prices and mailing standards for 
Periodicals mail on July 15, 2007.
    Our pricing change includes a new ``forever stamp'' to make future 
price changes more convenient for consumers. The forever stamp will 
always equal the First-Class Mail single piece 1-ounce letter price. We 
also offer new shape-based prices for First-Class Mail, with lower 
rates for letter-size pieces over 1 ounce. We make the Priority Mail 
flat-rate boxes a permanent product offering, and we add a new 1-pound 
price for Express Mail.
    For commercial mailers we offer new sorting options to reduce the 
number of trays in a mailing of letter-size pieces. We also offer new 
scheme preparations to give mailers access to lower rates and to better 
align flat-size mail preparation with mail processing. We add a new 
automated Address Change Service option to reduce the costs associated 
with undeliverable-as-addressed mail. First-Class Mail parcel mailers 
have new barcode options, and we provide new opportunities for mailers 
to combine Standard Mail Not Flat-Machinable pieces, Standard Mail 
parcels, and Package Services parcels in the same mailing.

EFFECTIVE DATE: 12:01 a.m. on May 14, 2007.

FOR FURTHER INFORMATION CONTACT: Joel Walker, 202-268-7261.

SUPPLEMENTARY INFORMATION: The Postal Service's request in Docket No. 
R2006-1 included mail classification changes, new pricing structures, 
and price changes for most domestic mailing services. This final rule 
provides the revisions to Mailing Standards of the United States Postal 
Service, Domestic Mail Manual (DMM) that we will adopt to implement 
most of the R2006-1 pricing changes. We summarize major changes since 
our February proposal by class of mail and extra service, update our 
summary of the entire proposal, and update our mailing standards. We 
provide all of the new prices in the ``Rates and Fees Reference'' at 
the end of this notice.
    You can find this final rule, as well as our earlier proposals, at 
https://www.usps.com/ratecase. We also provide helpful information for 
mailers, including frequently asked questions, press releases, and 
Mailers Companion and MailPro articles related to the pricing change.

Background

    The Postal Service Board of Governors set May 14, 2007, as the 
implementation date for the new prices and related changes for all 
classes of mail and extra services, with the exception of Periodicals 
mail, which we will implement on July 15, 2007. The Board chose these 
dates on the basis of our financial obligations, in light of 
operational and administrative considerations, while also considering 
the impact of the changes on mailers and consumers. We note that while 
we are implementing all of the Commission's recommended rates, the 
Governors are asking the Commission to reconsider three issues: the 
prices for Standard Mail flats, the application of the Nonmachinable 
Surcharge for First-Class Mail letters, and the price for the Priority 
Mail flat-rate box. The Governors are concerned about the short-term 
effect that some prices for Standard Mail Regular flats might have on 
catalog mailers, and that the Commission failed to provide appropriate 
cost-based incentives in these other two rate designs. The Governors 
are asking the Commission to reconsider their recommendations and 
respond as quickly as possible.
    We are delaying implementation of our new prices for all 
Periodicals mail to provide adequate time to adjust Postal Service 
systems, to enable an effective and orderly transition in postal 
operations, and to give postal acceptance employees and mailers more 
time to prepare for the complex structure recommended by the Postal 
Regulatory Commission. The Commission recommended Outside-County piece, 
bundle, and container rates that vary based on machinability, presort 
level, and entry. We will publish a Federal Register proposal 
explaining the changes and asking for your comments. We encourage all 
Periodicals mailers to review the Commission's recommendation, which 
includes significant changes to the container rate structure, at http:/
/www.prc.gov (under ``Opinions and Decisions''). As we explained in our 
previous Federal Register proposals, Periodicals mailers will have new 
incentives to use efficient containers, and the revised copalletization 
standards further encourage more publishers to combine mailings. We 
also added, and the Commission recommended, new prices for the 
nonadvertising portion of a mailing to give mailers of high-editorial-
content publications access to lower, destination entry rates.
    Overall our new prices reflect changes in operations and the 
marketplace and will enhance efficiency, offer more choices, and ensure 
that all types of mail cover their costs. We include incentives to 
create mailpieces compatible with our processing systems and to deposit 
flats and parcels closer to where they are delivered.
    Our prices recognize that each shape of mailpiece--letter, flat, 
and parcel--has substantially different processing costs that need to 
be covered. Our prices make clear distinctions between shapes and 
recognize that shape affects processing and delivery efficiency. For 
example, in First-Class Mail, a 2-ounce letter will cost $0.58; a 2-
ounce flat, $0.97; and a 2-ounce parcel, $1.30. These prices reflect 
the differences in costs associated with processing and delivering each 
type of mailpiece, as well as the higher value of larger pieces.
    Our new price incentives provide opportunities to mitigate the 
impact of price increases. For the 2-ounce example above, if the 
contents of a First-Class Mail flat are folded and placed into a 
letter-size envelope, the mailer would save 39 cents. If a parcel is 
reconfigured as a flat, the mailer would save 33 cents.
    To make future price changes more convenient, customers may 
purchase ``forever stamps.'' The forever stamp will always equal the 
First-Class Mail single piece 1-ounce letter price, without the 
addition of extra postage. While the forever stamp is intended to be 
used for single-piece 1-ounce First-Class Mail letters, we will allow 
the use of forever stamps on other single-piece-rate items.
    Our prices for Standard Mail letters are consistent with our past 
pricing strategies. For example, this strategy sets the Enhanced 
Carrier Route (ECR) basic letter rate higher than the regular 5-digit 
automation letter rates and encourages automation-compatible letter 
mail eligible for the ECR basic letter rate to migrate to the 
automation letter rate.
    To better align mail preparation with our processing capabilities 
and to maximize access to lower rates for mailers, we are implementing 
scheme preparation in many of our mail preparation standards. We have 
made changes to our flat-size mailing standards to ensure that the 
prices for

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flats and parcels better cover their costs and that pieces eligible for 
flat-size prices can be processed on our automated flat sorting 
machines (AFSM 100s) and handled efficiently at delivery.
    The standards for automation flats are now more closely aligned 
with the processing capabilities of the AFSM 100, the preferred machine 
for flats processing and the workhorse for flats distribution in 
processing plants. The processing capabilities of the AFSM 100 are 
vastly superior to those of the Upgraded Flats Sorting Machine (UFSM 
1000). The throughput of the AFSM 100 (17,000 pieces per hour) is much 
higher than the throughput of the UFSM 1000 (a mere 5,000 pieces per 
hour). There are no plans to purchase new UFSM 1000s, and we are 
removing them from many plants. We also believe that our new standards 
for Standard Mail will be appropriate for pieces weighing up to 16 
ounces when processed and delivered in the future flats sequencing 
environment.
    To be consistent with the processing capabilities of the AFSM 100, 
the length of a flat will continue to be the longest dimension, but for 
bound or folded pieces claimed at automation rates, the edge 
perpendicular to the bound or folded edge may not exceed 12 inches. We 
also revised the deflection test for automation-rate flats with bound 
or folded edges to allow them to be tested by placing the bound or 
final folded edge perpendicular to the edge of the flat surface. This 
method better accommodates pieces with bound edges as the shorter 
dimension.
    We set a 5-inch by 6-inch minimum for automation flats because 
smaller pieces cannot be efficiently processed and present handling 
problems at delivery. However, these pieces may qualify for letter 
rates or nonautomation flats rates, depending on mailpiece 
characteristics.
    Our standards further stipulate that rigid pieces do not qualify 
for flat prices. Rigid pieces are not easily processed on our AFSM 100 
flat-sorting equipment--often resulting in manual processing or 
processing on less-efficient flats equipment--and are not generally 
handled as flats by carriers at delivery. In addition, rigid pieces 
cannot be processed and delivered efficiently in the future flats 
sequencing environment. Our new flexibility test is a simple, 
effective, and efficient way to test the flexibility of pieces 
presented at our thousands of acceptance locations, to determine 
whether such pieces can be processed on our AFSM 100s and handled as 
flats by carriers. To alleviate concerns about postal employees 
administering the test inconsistently, we will allow customers to 
perform this test on their own pieces, with a postal employee observing 
and validating the test. Understanding that the characteristics of 
mailpieces evolve over time, we will test pieces that fall outside of 
the flexibility standards as necessary and continually re-evaluate our 
standards to accommodate new processing and delivery capabilities.
    The flexibility test specifies that pieces must not be in boxes 
because boxes and boxlike pieces do not process well on our AFSM 100 
and are not handled efficiently during delivery. We clarified the 
flexibility test by stating that pieces must be tested first with the 
longest side parallel to the edge of the surface. If the piece can pass 
this test and does not contain a rigid insert, further testing is 
unnecessary. We are confident that our acceptance employees can 
recognize pieces that could present a flexibility problem and will 
properly administer the test but, as we noted above, we also will allow 
customers to test their own pieces while we observe. We will provide 
illustrations for the flexibility test as well as the test for 
deflection in the DMM and other publications.
    We will apply the uniform thickness standard to all flat-size mail 
but will allow a \1/4\-inch variation in thickness. Our standards for 
determining uniform thickness exclude the outer edges of the mailpiece 
as follows:
    ``Flat-size mailpieces must be uniformly thick so that any bumps, 
protrusions, or other irregularities do not cause more than \1/4\-inch 
variance in thickness. Exclude the outside edges of a mailpiece (1 inch 
from the edge) when determining variance in thickness. Mailers must 
secure nonpaper contents to prevent shifting of more than 2 inches 
within the mailpiece.''
    The exclusion of pieces over \3/4\ inch thick from automation flats 
is consistent with processing capabilities on our AFSM 100s and our 
automatic inductions systems. Many pieces that are thicker than \3/4\ 
inch and currently qualify for Standard Mail automation flats rates are 
boxes or rigid pieces. Few Standard Mail pieces that are flexible 
printed material are both over \3/4\ inch and under 16 ounces, which is 
the maximum weight for Standard Mail.
    We do not require nonautomation flats to meet all automation 
standards. Pieces that meet the general size and physical 
characteristics for all flats in proposed DMM 301.1.0 but are too 
flimsy, are not barcoded, or use polywrap that is not approved are 
eligible for nonautomation flats rates. Small pieces (for example, 
pieces 4 inches high by 4 inches long) that are over \1/4\ inch thick 
also are eligible for nonautomation flats rates.\1\
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    \1\ The distinctions between ``nonautomation'' and 
``nonmachinable,'' as they relate to Not Flat-Machinable (NFM) 
pieces, as well as the operations related to NFMs, were discussed on 
the record in Docket No. R2006-1 (in the reply brief of the United 
States Postal Service, Docket No. R2006-1, at 202).
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    NFM pieces are rigid, parcel-like pieces and large pieces (more 
than 15 inches long or more than \3/4\ inch thick) that currently 
qualify for Standard Mail automation flats rates based solely on the 
UFSM 1000 criteria. However, these pieces are rarely processed on the 
UFSM 1000 or other flats sorting equipment, and are seldom delivered as 
flats--they are usually processed either manually or in the parcel 
mailstream. Therefore, the current prices of these pieces are not 
adequate to cover their processing and delivery costs.\2\ The NFM 
subcategory gives mailers the option to mail qualifying pieces at the 
lower, NFM rates, rather than at the higher, parcel rates. The 
standards allow mailers to choose on the basis of rates, preparation, 
and postage payment how to mail qualifying pieces under the categories 
of Standard Mail.
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    \2\ The cost and operational justifications supporting the NFM 
subcategory were discussed on the record in Docket No. R2006-1 (in 
the initial brief of the United States Postal Service, Docket No. 
R2006-1, at 279, on December 21, 2006; and in the reply brief of the 
United States Postal Service, Docket No. R2006-1, at 199-201, on 
January 4, 2007).
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    Our preparation and labeling standards for NFMs will direct them to 
the processing facilities that can efficiently handle them, based on 
actual operations and mailflows. The preparation and destination 
options for NFMs weighing 6 ounces or more mirror those of Standard 
Mail machinable parcels, because they are both efficiently processed at 
bulk mail centers (BMCs). The preparation and destination options for 
NFMs under 6 ounces mirror those of Standard Mail irregular parcels, 
which are efficiently processed at area distribution centers (ADCs).\3\
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    \3\ The Postal Regulatory Commission clarified the rate schedule 
to ensure that pieces sorted to the BMC will pay the same rates as 
pieces sorted to the ADC (in PRC Op. R2006-1, at 259, n. 183, on 
February 26, 2007).
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    The NFM subcategory of Standard Mail was developed according to 
statutory standards and procedures. The NFM category and prices were 
recommended by the Postal Regulatory Commission and approved by the 
Board of Governors. The standards are consistent with the Postal 
Service's authority, under statute and the Domestic Mail Classification 
Schedule, to align classifications and rates with mail processing and 
delivery operations.

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Mailers may still design and package their mailpieces as they do today 
and pay NFM or parcel rates. We will continue to accept these pieces 
for processing and delivery.
    We have given mailers time to adjust their mailpiece design, 
software programming, or production processes to avoid NFM or parcel 
prices if they choose to make a change. From our September 2006 
proposal, we have consistently encouraged mailers to redesign their 
packaging to avoid rigid or box-like mailpieces, and we have consulted 
with many mailers who intended to design pieces that could be mailable 
at flats prices. We realize that not every piece can be redesigned as 
an automation flat, but many mailers do have repackaging options and 
have modified their mailpieces to meet the standards for automation 
flats. We further note that we have openly and often communicated our 
intention to move parcel-like pieces out of the automation flats 
category in this pricing change, as well as in earlier rate testimony, 
because we handle these pieces as parcels in processing and delivery 
and incur the costs associated with parcels.\4\
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    \4\ The ongoing dialogue between the Postal Service and mailers 
regarding this issue was discussed on the record in Docket No. 
R2006-1 (in the rebuttal testimony of Marc D. McCrery (USPS-RT-14), 
Docket No. R2006-1, at 8-11, on November 20, 2006).
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    We also have been working closely with presort software vendors to 
ensure presort software will be available for the May 14, 2007, 
implementation. To ensure our employees and our customers are prepared, 
we initiated training and communication programs nationwide. We will 
separately provide training for customers across the country at local 
postal and mailer facilities and at local Postal Customer Council 
events. We will publish updated manuals and other mailing tools for 
customers on our Postal Explorer Web site at pe.usps.com.
    We published our policy for plant-verified drop shipment (PVDS) 
mail in the DMM Advisory on February 1. The procedures are the same as 
those we used in the past. PVDS mailings verified and paid for before 
the implementation date, using the current rates, will be accepted at 
destination entry postal facilities up to 15 days after May 14, when 
presented with appropriate verification and payment documentation. PVDS 
mailings may be verified and paid for beginning 30 days prior to May 
14, using the new rates, provided the shipments are not deposited at 
destination entry postal facilities until May 14, or later, when 
presented with appropriate verification and payment documentation. We 
will follow our established procedures for other mailing exceptions, as 
we have in past rate cases.
    In response to mailers' requests, we will publish decision trees, 
diagrams, and other supporting material to clarify physical standards 
and other mailing criteria. We agree that illustrations and diagrams 
add clarity to written standards, and we are developing supporting 
material for use in the DMM Advisory, the Quick Service Guides, and the 
DMM. We are also updating the business postage rate calculator on 
Postal Explorer (pe.usps.com) with new graphics and navigation features 
to make it even easier to use.

Changes Since the February Proposal

First-Class Mail Changes

    The rate for machinable First-Class Mail letters that weigh 1 ounce 
or less is $0.41 and the card rate is $0.26. The cost for each 
additional ounce decreases to $0.17 for First-Class Mail single-piece 
and presorted letters, flats, and parcels. The additional-ounce rate 
for automation First-Class Mail letters is $0.125 and the additional-
ounce rate for automation First-Class Mail flats is $0.17.
    Letter-size First-Class Mail pieces weighing 1 ounce or less that 
have any of the nonmachinable characteristics in DMM 201.2.1 are 
subject to a $0.17 nonmachinable surcharge. Nonmachinable letters over 
1 ounce are charged the First-Class Mail letter rates based on weight. 
We retained the 3.3-ounce (0.2063-pound) maximum weight for Presorted 
First-Class Mail machinable letters to be consistent with Standard 
Mail. Pieces over 3.3 ounces must be prepared as nonmachinable letters.

Standard Mail Changes

    We revised DMM 243.5.4 to clarify that there is no 3-digit scheme 
sort for origin/entry 3-digit trays for Standard Mail machinable 
letters. To be consistent with the Postal Regulatory Commissions' 
recommended decision, we revised DMM 246.5.2 to clarify that letter-
size mailpieces, regardless of the rate paid, are not eligible for a 
destination delivery unit rate. We also clarify that rigid letter-size 
pieces up to 3.3 ounces may be mailed at the nonmachinable letter 
rates.
    The Postal Regulatory Commission also recommended we set enhanced 
carrier route (ECR) basic letter rates lower than ECR basic flats rates 
and require all ECR letters not meeting automation requirements to be 
charged the ECR flats rates. Therefore, we revised DMM 243.6.1.2 and 
243.6.3 to require ECRLOT letters paid for at the ECR basic letter rate 
to meet address matching and coding standards and to be delivery-point 
barcoded and automation-compatible. We also revised DMM 243.6.1.3 to 
allow letters paid for at ECR basic letter rates to weigh up to 3.5 
ounces, consistent with our standards for pieces paid for at high-
density and saturation letter rates.
    For flat-size mail, we revised DMM 301.1.5, Uniform Thickness, to 
clarify that nonpaper contents smaller than the mailing container must 
not shift more than 2 inches. We did not intend the standard to apply 
to inserts such as paper envelopes and other thin paper inserts.
    Several mailers asked us to lower the minimum weight for certain 
types of machinable parcels, and we planned to revise these standards 
in a separate rulemaking. However, due to the substantially lower rates 
recommended by the PRC for machinable parcels at the 5-digit level, we 
decided to revise the standards as part of this final rule. Our new 
standards allow certain size pieces weighing at least 3.5 ounces to be 
mailed as machinable parcels. Based on extensive testing of these types 
of pieces and several years of processing and handling them, we are 
confident that we can process and deliver them as efficiently as we do 
similar parcels 6 ounces and over. This change allows mailers to 
prepare a wider range of machinable parcels separately or together with 
other machinable parcels.

Periodicals Changes

    We clarified the definition of ``length'' and ``height'' for 
automation flats by consolidating the definitions for all flat-size 
mail into revised DMM 301.1.2. We clarified the alternative criteria 
for Periodicals automation flats in 707.25.3 to specify that the 
flexibility and deflection tests in 301.1.4 and 301.3.2.4 do not apply 
to these pieces, and that the standards for uniform thickness and 
exterior format in 301.3.6 do apply.
    As we stated above, we will delay implementation of the new prices 
for Periodicals mail. We will publish a Federal Register proposal 
explaining the standards, and we will invite your comments on all 
aspects of the Periodicals proposal.

Priority Mail Changes

    The USPS-produced flat-rate envelope is charged the 1-pound price, 
$9.15 under the Commission's recommended decision, regardless of weight 
or destination. The Postal Service originally proposed a lower rate, 
and the

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Board of Governors is asking the Commission to reconsider the $9.15 
price.

Other Changes

    As a result of the recommended decision, we will not make changes 
to the pricing structure for Confirm. We will continue to offer Silver 
and Gold subscriptions as well as Platinum subscriptions with unlimited 
scans. New fees apply to new subscriptions or for renewal of existing 
subscriptions after May 14, 2007.
    We revised DMM 609 with additional information about the indemnity 
claims process.

Summary by Class of Mail

Summary of First-Class Mail

    Our new prices are based on the shape of mail and differences in 
the relative costs, with separate prices for letters, flats, and 
parcels. As shape becomes a more important price element, weight 
becomes less important, and we reduce prices for letter-size pieces 
over 1 ounce and flat-size pieces over 7 ounces.
    The single-piece 1-ounce First-Class Mail letter price increases 
$0.02, to $0.41, and the single-piece card price also increases $0.02, 
to $0.26. The additional-ounce price decreases $0.07 to $0.17.
    Our new forever stamp makes future price changes more convenient 
for consumers. The postage value of the forever stamp equals the First-
Class Mail single-piece 1-ounce letter rate at any time in the future, 
without the addition of extra postage. Initially we will sell the 
forever stamp at the new 41-cent rate.
    The nonmachinable surcharge increases to $0.17 and applies to 1-
ounce letter-size mailpieces with any of the nonmachinable 
characteristics. Nonmachinable letters over 1 ounce are charged the 
letter rates, based on weight. The maximum weight for letters is 3.5 
ounces.
    The additional-ounce price for automation letters decreases from 
$0.237 to $0.125. We maintain the 150-piece minimum for automation 
First-Class Mail letters and cards. Sort levels are 5-digit/scheme, 3-
digit/scheme, 3-digit origin, AADC, and mixed AADC. We offer simplified 
letter mail preparation for machinable letters, requiring mailers to 
sort only to the origin 3-digit, AADC, and mixed AADC levels. We 
eliminate the automation carrier route preparation and rates.
    To help reduce the number of ``air trays'' (partially filled trays) 
and the overall costs of handling mail in letter trays, we offer a 
reduced--overflow tray option for automation letters. In addition, to 
encourage more full trays, we change our definition of a ``full letter 
tray'' to one in which the pieces fill the length of the tray between 
85 percent and 100 percent.
    To ensure automated processing of flat-size mail, we require all 
flats to be rectangular. The physical standards for automation flats 
are the criteria for AFSM 100 pieces, with new standards for 
flexibility. We also lessen and simplify the deflection standard.
    The structure for presorted parcels includes new workshare prices. 
The rate levels are 5-digit, 3-digit, ADC, and single piece. To 
simplify the preparation of First-Class Mail parcels, we make the 
preparation of 5-digit/scheme sacks optional. We require at least 10 
pounds of parcels for 5-digit/scheme sacks, 3-digit sacks, and ADC 
sacks. Remaining pieces sorted to mixed ADC sacks are charged the 
single-piece First-Class Mail parcel prices.
    Barcodes facilitate processing on the Automated Package Processing 
System (APPS), and we give mailers the option of applying either a 5-
digit UCC/EAN Code 128 or a POSTNET barcode on presorted parcels. 
Unless prepared in 5-digit/scheme containers or paid for at the single-
piece rates, a $0.05 surcharge applies to all parcels that are not 
barcoded, or that weigh less than 2 ounces, and to irregularly shaped 
parcels such as triangles, tubes, rolls, and similar pieces.

Summary of Standard Mail

    Our prices encourage mail that is compatible with our operations 
and drop shipped closer to its destination. As in First-Class Mail, 
Standard Mail pricing has greater recognition of shape and reduced 
reliance on weight.
Letters
    Automation letter sort levels are 5-digit/scheme, 3-digit/scheme, 
AADC, and mixed AADC. Mailers also have the option to prepare 3-digit/
scheme origin/entry trays for automation letters. We offer a simplified 
preparation and require mailers of machinable letters to sort only to 
the AADC and mixed AADC levels, with optional sorting to 3-digit 
origin/entry trays.
    ECR letters up to 3 ounces that are barcoded and automation-
compatible are sorted in full trays according to new preparation 
standards. Mailers sort and bundle ECR letters that are not barcoded or 
not automation-compatible, or that are over 3 ounces, according to 
current preparation standards. Mailers sort and bundle mailings that 
contain pieces both over and under 3 ounces according to current 
preparation standards.
    We replace the nonmachinable surcharge with a separate rate 
structure for nonmachinable letters up to 3.3 ounces. Nonmachinable 
letter sort levels are 5-digit, 3-digit, ADC, and mixed ADC, for which 
there are separate rates. Mailers have the option to prepare 3-digit 
origin/entry trays. Nonmachinable letters over 3.3 ounces are charged 
the Not Flat-Machinable (NFM) rates or, if barcoded and meeting other 
requirements, an automation flat-size rate.
    Destination delivery unit (DDU) entry rates are not available for 
ECR letter-size pieces, and mailers cannot pay ECR flat-size rates and 
claim the DDU discount for automation-compatible letters drop shipped 
to DDUs. Destination sectional center facility (DSCF) entry rates are 
allowed for DDU entry of some ECR letters, including letters with 
simplified addresses and locally entered mailings of 2,500 pieces or 
less. We eliminate ECR automation basic rates. ECRLOT letters paid for 
at the basic letter rate must meet address matching and coding 
standards and must be delivery-point barcoded and automation-
compatible.
    To help reduce the costs of handling mail in letter trays, we offer 
a reduced--overflow tray option for automation letters. In addition, to 
encourage fuller trays, we change our definition of a ``full letter 
tray'' to one in which the pieces fill the length of the tray between 
85 percent and 100 percent.
Flats
    The physical standards for automation flats retain most of the 
criteria for AFSM 100 pieces, with new standards for flexibility that 
exclude boxes and box-like pieces. We added a rectangular requirement 
and a uniform thickness standard for all flats. The new uniform 
thickness standard allows up to a \1/4\-inch variation in thickness. 
These changes ensure that pieces paid for at automation flats rates can 
be processed in automated operations and delivered as flats. We also 
lessen the deflection standard and allow bound or folded pieces to be 
tested differently than enveloped pieces.
    We increase the maximum size for carrier route flats so that the 
same maximum size applies to all flats, regardless of the rate paid.
Not Flat-Machinable Pieces
    Our prices include a new Not Flat-Machinable (NFM) subcategory for 
rigid flat-size pieces and for large pieces that are currently 
automation-compatible only by meeting UFSM 1000 standards. This 
subcategory provides mailers a

[[Page 15370]]

lower-than-parcel rate option for pieces that do not meet the new 
standards for flats. We do not allow bundling for most NFMs, and 
mailers may prepare pieces in 5-digit/scheme, 3-digit, ADC/BMC, and 
mixed ADC/BMC containers. We allow 5-digit bundles of five or more NFMs 
when the mail is prepared on pallets. We offer a DDU entry rate for 
NFMs sorted to 5-digit destinations when drop shipped directly to the 
DDU. There is no minimum for NFMs drop shipped to DDUs. Unless prepared 
in 5-digit/scheme containers, a $0.05 surcharge applies to all NFMs 
that are not barcoded.
Parcels
    We eliminate the residual shape surcharge for Standard Mail 
parcels. We no longer offer a $0.03 machinable barcode discount. 
Instead, parcel prices include a requirement for barcodes. Unless 
prepared in 5-digit/scheme containers, a $0.05 surcharge applies to all 
parcels that are not barcoded.
    We remove the bundling requirement for all Standard Mail irregular 
parcels except ECR parcels. We reduce the required minimum quantity of 
irregular parcels in sacks to 10 pounds per sack. We allow mailers the 
option of using POSTNET barcodes or parcel barcodes on Standard Mail 
irregular parcels.
    We encourage mailers to commingle machinable parcels, irregular 
parcels, and NFMs when they are able to combine them in 5-digit/scheme 
containers. We allow mailers to combine NFMs under 6 ounces with 
irregular parcels in 3-digit, ADC, and mixed ADC containers. We also 
allow mailers to combine NFMs weighing 6 ounces or more with machinable 
parcels in BMC/ASF and mixed BMC containers. We allow mailers to 
combine Standard Mail parcels, NFMs, machinable Parcel Select, and 
Bound Printed Matter parcels when prepared in 3-digit containers to 
certain ZIP Codes and entered at designated SCFs.
    Our new standards in 401.1.0 allow certain size pieces weighing at 
least 3.5 ounces to be mailed as machinable parcels. This change allows 
mailers to prepare a wider range of machinable parcels separately or 
together with other machinable parcels.
    We offer a DDU entry rate for parcels sorted to 5-digit/scheme 
destinations when drop shipped directly to the DDU. There is no minimum 
for the amount of parcels drop shipped to a DDU.

Customized MarketMail

    Rates for Customized MarketMail equal the 5-digit nonentry rate for 
Not Flat-Machinable pieces, and mailers are still required to drop ship 
Customized MarketMail pieces to DDUs.

Detached Address Labels

    Our prices include a new $0.015 charge for detached address labels 
with ECR pieces. Mailers who prepare mail with addresses on their 
mailpieces could avoid the new charge.

Pallets

    We reduce certain destination pallet minimums to 100 pounds of 
bundles or sacks of nonletter mail or 12 linear feet of trays on 
pallets.

Summary of Periodicals

    As we stated above, we will delay implementation of our new prices 
for Periodicals mail. We will publish a separate Federal Register 
proposal explaining the standards for Periodicals mail resulting from 
the Postal Regulatory Commission's recommended decision, and asking for 
your comments.
    To encourage fuller letter trays, we change our definition of a 
``full letter tray'' to one in which the pieces fill the length of the 
tray between 85 percent and 100 percent. We reduce certain destination 
pallet minimums to 100 pounds of bundles or sacks of nonletter mail or 
12 linear feet of trays on pallets.

Summary of Package Services

    Package Services includes Parcel Post, Bound Printed Matter, Media 
Mail, and Library Mail. Our standards simplify Package Services 
offerings and encourage more efficient handling of parcels.
Parcel Post
    Currently, we charge parcels weighing less than 15 pounds and 
measuring more than 84 inches in combined length and girth the 15-pound 
rates (``balloon rate''). Under the new standards, we charge parcels 
weighing less than 20 pounds and measuring more than 84 inches in 
combined length and girth the 20-pound rates.
    We incorporate the current $0.03 barcode discount available for 
machinable Parcel Select destination bulk mail center (DBMC) entry mail 
into the price, and we require a barcode. Nonbarcoded machinable pieces 
are charged the applicable Intra-BMC/ASF rate.
    We do not change the mail preparation standards for Parcel Select.
Bound Printed Matter
    We rename single-piece Bound Printed Matter ``nonpresorted'' Bound 
Printed Matter, and we eliminate it as a retail option. Customers can 
still use PC Postage or apply meter postage or adhesive stamps to 
nonpresorted BPM and deposit these pieces in a collection box, at the 
retail counter, or with their letter carrier. For flat-size pieces, we 
increase the $0.08 discount from the parcel price to $0.16. We do not 
change the $0.03 per piece POSTNET barcode discount for flat-size mail 
and the $0.03 per piece parcel barcode discount for machinable parcels.
    To reduce sacks, we require 5-digit/scheme and 3-digit/scheme 
bundles and 5-digit/scheme sacks for presorted flat-size Bound Printed 
Matter. We require 5-digit/scheme sacks for machinable and irregular 
parcels.
Media Mail and Library Mail
    To reduce sacks, we require 5-digit/scheme and 3-digit/scheme 
bundles and 5-digit/scheme sacks for presorted flat-size Media Mail and 
Library Mail. We require 5-digit/scheme sacks for machinable and 
irregular parcels.
Pallets
    We reduce certain destination pallet minimums to 100 pounds of 
bundles or sacks of nonletter mail.

Summary of Priority Mail

    We continue to offer convenience in Priority Mail. The USPS-
produced flat-rate envelope is still charged the 1-pound price, 
regardless of weight or destination. USPS-produced flat-rate boxes will 
become a permanent offering. Prices for all Priority Mail pieces 
weighing over 23 pounds decrease for all zones, many by as much as 20 
percent.
    Previously, we charged the 15-pound rates (``balloon rate'') for 
Priority Mail pieces weighing less than 15 pounds and measuring more 
than 84 inches in combined length and girth. Under the new standards, 
we charge the 20-pound rates (the new ``balloon rate'') for Priority 
Mail pieces weighing less than 20 pounds and measuring more than 84 
inches in combined length and girth. We apply the new balloon rate only 
to pieces addressed for local delivery or to zones 1-4.
    Priority Mail pieces that exceed 1 cubic foot and are addressed to 
zones 5-8 are subject to a new dimensional-weight price under 123.1.4. 
We rate postage for these pieces at the greater of their actual weight 
or their dimensional weight. In general, if a piece is relatively light 
for its size, it may be subject to a dimensional-weight price. We 
calculate dimensional weight using one of two formulas, one for 
rectangular and one for nonrectangular pieces.
    USPS-supplied containers containing mailings of other classes of 
mail under Priority Mail Open and Distribute are

[[Page 15371]]

not subject to dimensional weight pricing.

Summary of Express Mail

    Express Mail pieces often contain material that ranges from a half-
pound to 2 pounds. Previously, these pieces paid the 2-pound price. To 
keep Express Mail a viable alternative for mailers, we add a new 1-
pound price. The flat-rate envelope continues to be charged the half-
pound price, regardless of weight.

Summary of Extra Services

    Our proposal keeps insured mail reliable, easy, and affordable. All 
insured pieces will have a barcoded label and receive a delivery scan. 
We will not require a signature at delivery for insured items with an 
indemnity of $200 or less. We also update the standards for filing an 
indemnity claim.
    We provide new prices for Bulk Parcel Return Service, Business 
Reply Mail, Certificate of Mailing, Certified Mail, Collect on 
Delivery, Delivery Confirmation, Bulk Insurance, Express Mail 
Insurance, Merchandise Return Service, Money Orders, Parcel Airlift, 
Parcel Return Service, Registered Mail, Restricted Delivery, Return 
Receipt, Return Receipt for Merchandise, Signature Confirmation, and 
Special Handling.

Summary of Other Services

    Our new standards seek to modernize our services, improve address 
quality, and reduce undeliverable-as-addressed mail.
    We decrease the price for Address Change Service electronic option 
for First-Class Mail from $0.21 to $0.06. We increase the price for all 
other classes of mail from $0.21 to $0.25. We decrease the price for 
manual Address Correction Service for all classes of mail from $0.75 to 
$0.50. For manual notifications received by electronic and automated 
ACS customers, we decrease the prices to match electronic notification 
prices, $0.06 for First-Class Mail and $0.25 for other classes.
    A new automated option for Address Change Service for First-Class 
Mail letters provides the first two notices at no charge, and 
additional notices for $0.05 each. For Standard Mail letters, the first 
two notices are $0.02 each, and additional notices are $0.15 each. This 
new option requires mailers to use the Intelligent Mail barcode.
    The Postal Regulatory Commission recommended that we implement a 
new service to charge for the actual number of Standard Mail pieces 
forwarded and returned. This service would use electronic data to give 
mailers an alternative to the current process that charges a weighted 
rate for the returned pieces only (the weighted rate is intended to 
cover the postage for the forwarded pieces also). The new service would 
be available for Address Change Service pieces using the electronic 
option, or the new automated option using the Intelligent Mail barcode. 
This service will be available to customers through an approval process 
that ensures individual customer and postal systems can adapt to the 
new payment system.
    We no longer offer on-site meter services. We eliminate the fees 
associated with on-site meter service, meter resetting, examination, 
and checking meters in and out of service.
    Individual post office box holders at different locations may 
experience varying price changes as we continue to align prices with 
our costs for each location. Our new prices also realign the Caller 
Service fees based on location.
    We provide new prices for Address Sequencing Service, Confirm, 
Mailing List Service, Permit Imprint, Pickup on Demand service, Premium 
Forwarding Service, Shipper Paid Forwarding, Stamped Cards, Stamped 
Envelopes, and all annual and quarterly mailing fees.
    We provide the updated DMM standards, and how they are applied for 
each type of mail, below.
    We adopt the following amendments to Mailing Standards of the 
United States Postal Service, Domestic Mail Manual (DMM), incorporated 
by reference in the Code of Federal Regulations. See 39 CFR 111.1.

List of Subjects in 39 CFR Part 111

    Administrative practice and procedure, Postal Service.

0
Accordingly, 39 CFR Part 111 is amended as follows:

PART 111--[AMENDED]

0
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, 
3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.


0
2. Revise the following sections of Mailing Standards of the United 
States Postal Service, Domestic Mail Manual (DMM), as follows:

100 Retail Mail: Letters, Cards, Flats, and Parcels

101 Physical Standards

1.0 Physical Standards for Letters

1.1 Dimensional Standards for Letters

    Letter-size mail is:
* * * * *
    [Renumber item c as item d. Insert new item c as follows:]
    c. Not more than 3.5 ounces.
* * * * *

1.2 Nonmachinable Criteria

    A letter-size piece is nonmachinable (see 6.4) if it has one or 
more of the following characteristics (see 601.1.4 to determine the 
length, height, top, and bottom of a mailpiece):
    [Renumber items a through i as items b through j. Insert new item a 
as follows:]
    a. Is over 3.5 ounces.
* * * * *

2.0 Physical Standards for Flats

2.1 General Definition

    Flat-size mail is:
* * * * *
    [Renumber item c as new item f. Insert new items c through e as 
follows:]
    c. Flexible (see 2.2).
    d. Rectangular.
    e. Uniformly thick (see 2.3).
* * * * *
    [Insert new 2.2 through 2.4 as follows:]

2.2 Minimum Flexibility Criteria for Flat-Size Pieces

    Flat-size pieces must be flexible. Boxes and box-like pieces--with 
or without hinges, gaps, or breaks that allow the piece to bend--are 
not flats. Tight envelopes that are completely filled to form box-like 
pieces are not flats. Test flats as follows:
    a. All flats:
    1. Place the piece with the length parallel to the edge of a flat 
surface and extend the piece halfway off the surface.
    2. Press down on the piece at a point 1 inch from the outer edge, 
in the center of the piece's length, exerting steady pressure.
    3. The piece is not flexible if it cannot bend at least 1 inch 
vertically without being damaged.
    4. The piece is flexible if it can bend at least 1 inch vertically 
without being damaged and it does not contain a rigid insert. No 
further testing is necessary.
    5. Test the piece according to 2.2b or 2.2c below if it can bend at 
least 1 inch vertically without being damaged and it contains a rigid 
insert.
    b. Flats 10 inches or longer that pass the test in 2.2a and contain 
a rigid insert:
    1. Place the piece with the length perpendicular to the edge of a 
flat surface and extend the piece 5 inches off the surface.
    2. Press down on the piece at a point 1 inch from the outer edge, 
in the center of the piece's width, exerting steady pressure.

[[Page 15372]]

    3. Turn the piece around and repeat steps 1 and 2. The piece is 
flexible if both ends can bend at least 2 inches vertically without 
being damaged.
    c. Flats less than 10 inches long that pass the test in 2.2a and 
contain a rigid insert:
    1. Place the piece with the length perpendicular to the edge of a 
flat surface and extend the piece one-half of its length off the 
surface.
    2. Press down on the piece at a point 1 inch from the outer edge, 
in the center of the piece's width, exerting steady pressure.
    3. Turn the piece around and repeat steps 1 and 2. The piece is 
flexible if both ends can bend at least 1 inch vertically without being 
damaged.

2.3 Uniform Thickness

    Flat-size mailpieces must be uniformly thick so that any bumps, 
protrusions, or other irregularities do not cause more than \1/4\-inch 
variance in thickness. Exclude the outside edges of a mailpiece (1 inch 
from the edge) when determining variance in thickness. Mailers must 
secure nonpaper contents to prevent shifting of more than 2 inches 
within the mailpiece.

2.4 Flat-Size Pieces Not Eligible for Flat-Size Rates

    Mailpieces that do not meet the standards in 2.1 through 2.3 are 
not eligible for flat-size rates and must be paid for at the applicable 
parcel rates.
* * * * *

5.0 Additional Physical Standards for Priority Mail

* * * * *

5.2 Two or More Packages

    [Revise 5.2 as follows:]
    With the exception of USPS-produced Priority Mail flat-rate 
envelopes or boxes, two or more packages may be mailed as a single 
parcel if they are about the same size or shape, are securely wrapped 
or fastened together, and do not exceed the weight or size limits.
* * * * *

6.0 Additional Physical Standards for First-Class Mail

* * * * *

6.4 Nonmachinable Pieces

6.4.1 Nonmachinable Letters

    [Revise 6.4.1 as follows:]
    Letter-size pieces (except card-rate pieces) that weigh 1 ounce or 
less and meet one or more of the nonmachinable characteristics in 1.2 
are subject to the nonmachinable surcharge (see 133.1.11). 
Nonmachinable letters over 1 ounce are charged the First-Class Mail 
letter rate based on weight.
    [Revise heading and text of 6.4.2 as follows:]

6.4.2 Nonmachinable Flats

    Flat-size pieces that do not meet the standards in 2.0 are subject 
to the applicable postage for a parcel-size piece, based on weight.
* * * * *
    [Delete 8.0, Additional Physical Standards for Bound Printed 
Matter. Renumber 9.0 and 10.0 as new 8.0 and 9.0.]
* * * * *

102 Elements on the Face of a Mailpiece

* * * * *

3.0 Placement and Content of Mail Markings

* * * * *
    [Revise heading of 3.3 as follows:]

3.3 Mail Markings

    [Revise first sentence of 3.3 as follows:]
    Mailers must print the basic required Package Services subclass 
marking--``Parcel Post'' or ``PP,'' ``Media Mail,'' or ``Library 
Mail''--on each piece claimed at the respective rate.* * *
* * * * *

110 Retail Mail: Express Mail

113 Rates and Eligibility

1.0 Express Mail Rates and Fees

* * * * *

1.2 Express Mail Rate Application

    [Revise 1.2 as follows:]
    Except under 1.4, Flat-Rate Envelope, Express Mail items are 
charged the 0.5-pound rate for items up to 0.5 pound. Items over 0.5 
pound are rounded up to the next whole pound. For example, if a piece 
weighs 0.25 pound, the weight (postage) increment is 0.5 pound; if a 
piece weighs 0.75 pound, the weight (postage) increment is 1 pound; if 
a piece weighs 1.2 pounds, the weight (postage) increment is 2 pounds.
* * * * *

120 Retail Mail: Priority Mail

123 Rates and Eligibility

1.0 Priority Mail Rates and Fees

* * * * *

1.2 Priority Mail Rate Application

    [Revise 1.2 as follows:]
    Except under 1.3, 1.4, and 1.5, Priority Mail rates are charged per 
pound; any fraction of a pound is rounded up to the next whole pound. 
For example, if a piece weighs 1.2 pounds, the weight (postage) 
increment is 2 pounds. The minimum postage amount per addressed piece 
is the 1-pound rate. The Priority Mail rate up to 1 pound is based on 
weight only; rates for pieces weighing more than 1 pound are based on 
weight and zone. Other charges may apply. See Exhibit 1.3, Priority 
Mail Rates.
    [Revise the heading and text of 1.3 as follows:]

1.3 Minimum Rate for Parcels to Zones 1-4

    Parcels addressed for delivery to Zones 1-4 (including Local) that 
weigh less than 20 pounds but measure more than 84 inches (but not more 
than 108 inches) in combined length and girth are charged the 
applicable zone rate for a 20-pound parcel (balloon rate).
    [Delete 1.6 and 1.7; renumber 1.4 and 1.5 as new 1.6 and 1.7. 
Insert new 1.4 and 1.5 as follows:]

1.4 Dimensional Weight Rate for Low-Density Parcels to Zones 5-8

    Postage for parcels addressed for delivery to Zones 5-8 and 
exceeding 1 cubic foot (1,728 cubic inches) is based on the actual 
weight or the dimensional weight (as calculated in 1.4.1 or 1.4.2), 
whichever is greater.

1.4.1 Determining Dimensional Weight for Rectangular Parcels

    Follow these steps to determine the dimensional weight for a 
rectangular parcel:
    a. Measure the length, width, and height in inches. Round off (see 
604.7.0) each measurement to the nearest whole inch.
    b. Multiply the length by the width by the height.
    c. If the result exceeds 1,728 cubic inches, divide the result by 
194 and round up (see 604.7.0) to the next whole number to determine 
the dimensional weight in pounds.

1.4.2 Determining Dimensional Weight for Nonrectangular Parcels

    Follow these steps to determine the dimensional weight for a 
nonrectangular parcel:
    a. Measure the length, width, and height in inches at their extreme 
dimensions. Round off (see 604.7.0) each measurement to the nearest 
whole inch.
    b. Multiply the length by the width by the height.
    c. Multiply the result by an adjustment factor of 0.785.
    d. If the final result exceeds 1,728 cubic inches, divide the 
result by 194

[[Page 15373]]

and round up (see 604.7.0) to the next whole number to determine the 
dimensional weight in pounds.
    e. If the dimensional weight exceeds 70 pounds, the parcel pays the 
70-pound rate.

1.5 Flat-Rate Boxes and Envelopes

    Any amount of material may be mailed in a USPS-produced Priority 
Mail flat-rate box or flat-rate envelope. When sealing a flat-rate box 
or flat-rate envelope, the container flaps must be able to close within 
the normal folds. Tape may be applied to the flaps and seams to 
reinforce the container, provided the design of the container is not 
enlarged by opening the sides and the container is not reconstructed in 
any way.

1.5.1 Flat-Rate Boxes--Rate and Eligibility

    Each USPS-produced Priority Mail flat-rate box is charged $9.15, 
regardless of the actual weight of the piece or its destination. Only 
USPS-produced flat-rate boxes are eligible for the flat-rate box rate.

1.5.2 Flat-Rate Envelopes--Rate and Eligibility

    Each USPS-produced Priority Mail flat-rate envelope is charged 
$4.60, regardless of the actual weight of the piece or its destination. 
Only USPS-produced flat-rate envelopes are eligible for the flat-rate 
envelope rate.
* * * * *

130 Retail Mail: First-Class Mail

133 Rates and Eligibility

1.0 First-Class Mail Rates and Fees

1.1 First-Class Mail Single-Piece Rate Application

    The single-piece rates for First-Class Mail are applied as follows:
* * * * *
    [Revise the weight limit in item b as follows:]
    b. The letter rate applies to letter-size pieces that meet the 
standards in 101.1.1 and weigh 3.5 ounces or less, and that are not 
eligible for and claimed at the card rate.
    [Insert new items c and d as follows:]
    c. The flat rate applies to flat-size pieces that meet the 
standards in 101.2.1.
    d. The parcel rate applies to parcel-size pieces under 101.3.0 and 
to flat-size pieces that do not meet the standards in 101.2.0.
* * * * *
    [Renumber 1.7, Rates for Keys and Identification Devices, as new 
1.9. Restructure the rate tables in 1.5 and 1.6 into new 1.5 through 
1.7 for separate letter, flat, and parcel rates.]

1.8 Keys and Identification Devices

    [Revise 1.8 to remove references to the nonmachinable surcharge in 
the first three sentences as follows:]
    Keys and identification devices (such as identification cards and 
uncovered identification tags) that weigh 13 ounces or less are 
returned at the applicable single-piece First-Class Mail parcel rate 
plus the fee. Keys and identification devices that weigh more than 13 
ounces but not more than 1 pound are returned at the 1-pound Priority 
Mail rate plus the fee. Keys and identification devices weighing more 
than 1 pound but not more than 2 pounds are mailed at the 2-pound 
Priority Mail rate for zone 4 plus the fee. * * *
* * * * *
    [Renumber 1.9 through 1.11 as new 1.10 through 1.12.]

1.11 Applicability of Nonmachinable Surcharge

    [Revise renumbered 1.11 as follows:]
    The nonmachinable surcharge applies to letter-size pieces that 
weigh 1 ounce or less and meet one or more of the nonmachinable 
characteristics in 101.1.2. Pieces mailed at the card rate are not 
subject to the nonmachinable surcharge.
* * * * *

2.0 Basic Eligibility Standards for First-Class Mail

2.1 Description of Service

* * * * *

2.1.2 Rate Options

    [Revise 2.1.2 to add shape-based reference as follows:]
    First-Class Mail offers shape-based single-piece rates in 1.0.
* * * * *

150 Retail Mail: Parcel Post

153 Rates and Eligibility

1.0 Parcel Post Rates and Fees

1.1 Rate Eligibility

    There are two Parcel Post retail rate categories: Intra-BMC and 
Inter-BMC. Intra-BMC and Inter-BMC Parcel Post rates are calculated 
based on the zone to which the parcel is addressed and the weight of 
the parcel. Requirements for Parcel Post rates and discounts are as 
follows:
* * * * *
    [Revise item d as follows:]
    d. Parcels that weigh less than 20 pounds but measure more than 84 
inches (but not more than 108 inches) in combined length and girth are 
charged the applicable rate for a 20-pound parcel (balloon rate).
* * * * *

1.7 Inter-BMC/ASF Machinable Parcel Post

    [Revise 1.7 as follows:]
    For barcode discount, deduct $0.03 per parcel (50-piece minimum). 
Parcels that weigh less than 20 pounds but measure more than 84 inches 
(but not more than 108 inches) in combined length and girth are charged 
the applicable rate for a 20-pound parcel (balloon rate).

1.8 Inter-BMC/ASF Nonmachinable Parcel Post

    [Revise 1.8 as follows:]
    Rates include the $3.89 nonmachinable surcharge. Regardless of 
weight, a parcel with any of the characteristics in 101.7.2, 
Nonmachinable Parcel Post Standards, must be charged the rate listed in 
Exhibit 1.9. Parcels that weigh less than 20 pounds but measure more 
than 84 inches (but not more than 108 inches) in combined length and 
girth are charged the applicable rate for a 20-pound parcel (balloon 
rate). The nonmachinable surcharge does not apply to parcels mailed at 
oversized rates or parcels sent with special handling.
* * * * *

1.10 Local and Intra-BMC/ASF Machinable Parcel Post

    [Revise 1.10 as follows:]
    Rates for parcels that originate and destinate in the same BMC 
service area are in Exhibit 1.12, Local and Intra-BMC/ASF Machinable 
and Nonmachinable Parcel Post Rates. For barcode discount, deduct $0.03 
per parcel (50-piece minimum). Parcels that weigh less than 20 pounds 
but measure more than 84 inches (but not more than 108 inches) in 
combined length and girth are charged the applicable rate for a 20-
pound parcel (balloon rate). Regardless of weight, a parcel with any of 
the characteristics in 101.7.2 must be charged the rate for a 
nonmachinable parcel in 1.11.

1.11 Local and Intra-BMC/ASF Nonmachinable Parcel Post

    [Revise 1.11 as follows:]
    Rates include the $2.87 nonmachinable surcharge. Regardless of 
weight, a parcel with any of the characteristics in 101.7.2, 
Nonmachinable Parcel Post Standards, must be charged the rates in 
Exhibit 1.12. Parcels that weigh less than 20 pounds but measure more 
than 84 inches (but not more than 108 inches)

[[Page 15374]]

in combined length and girth are charged the applicable rate for a 20-
pound parcel (balloon rate). The nonmachinable surcharge does not apply 
to parcels mailed at oversized rates or parcels sent with special 
handling.
* * * * *
    [Delete Chapter 160, Retail Mail: Bound Printed Matter, in its 
entirety. These standards are incorporated into chapters 360 and 460.]
* * * * *

200 Discount Mail: Letters and Cards

201 Physical Standards

1.0 Physical Standards for Machinable Letters and Cards

1.1 Physical Standards for Machinable Letters

* * * * *

1.1.2 Weight Standards for Machinable Letters

    [Revise 1.1.2 to change the maximum weight for First-Class Mail 
machinable letters to 3.5 ounces as follows:]
    The maximum weight for Presorted First-Class Mail machinable 
letters is 3.3 ounces (0.2063 pound). The maximum weight for Standard 
Mail machinable letters is 3.3 ounces (0.2063 pound).
* * * * *

2.0 Physical Standards for Nonmachinable Letters

2.1 Criteria for Nonmachinable Letters

    A letter-size piece is nonmachinable if it has one or more of the 
following characteristics (see 601.1.4 to determine the length, height, 
top, and bottom of a mailpiece):
    [Renumber items a through i as items b through j. Insert new item a 
as follows:]
    a. Is over 3.3 ounces, unless prepared as an automation-rate 
letter.
* * * * *
    [Delete 2.2.2, Nonmachinable Surcharge--Letter-Size Pieces. 
Renumber 2.2.1 as new 2.2 and revise as follows:]

2.2 Additional Criteria for First-Class Mail Nonmachinable Letters

    Letter-size pieces (except card-rate pieces) that weigh 1 ounce or 
less and meet one or more of the nonmachinable characteristics in 2.1 
are subject to the nonmachinable surcharge (see 133.1.10). 
Nonmachinable letters over 1 ounce and up to 3.5 ounces are charged the 
First-Class Mail letter rates based on weight. All letter-size pieces 
over 3.5 ounces are prepared as letters and charged the flat-size 
rates.
    [Delete 2.3.2, Nonmachinable Surcharge Not Applied. Renumber 2.3.1 
as new 2.3 and revise as follows:]

2.3 Additional Criteria for Standard Mail Nonmachinable Letters

    The nonmachinable rates in 243.1.5 apply to Standard Mail letter-
size pieces that weigh 3.3 ounces or less and have one or more of the 
nonmachinable characteristics in 2.1.

3.0 Physical Standards for Automation Letters and Cards

* * * * *

3.3 Weight Standards for First-Class Mail Automation Letters and Cards

    [Revise 3.3 to change the weight limit as follows:]
    Maximum weight for First-Class Mail automation letters is 3.5 
ounces (0.2188 pound). See 3.13.4 for pieces heavier than 3 ounces.

3.4 Weight Standards for Standard Mail Automation Letters

    [Revise 3.4 to remove the reference to automation carrier route 
mail as follows:]
    Maximum weight for Standard Mail mailed at automation and Enhanced 
Carrier Route is 3.5 ounces (0.2188 pound). See 3.13.4 for pieces 
heavier than 3 ounces.
* * * * *

202 Elements on the Face of a Mailpiece

* * * * *

3.0 Placement and Content of Mail Markings

* * * * *

3.3 Placement of Mail Markings

* * * * *
    [Revise item b, item b3, and item c to delete ``AUTOCR.'']

3.4 Exceptions to Markings

    Exceptions are as follows:
    [Revise item a to remove references to carrier route mail as 
follows:]
    a. Automation Letters. First-Class Mail and Standard Mail letters 
do not require an ``AUTO'' marking if they bear a DPBC or an 
Intelligent Mail barcode with a delivery point routing code in the 
address block or on an insert visible through a window. First-Class 
Mail letters not marked ``AUTO'' must bear both the ``Presorted'' or 
``PRSRT'' and ``First-Class'' markings. Standard Mail letters not 
marked ``AUTO'' must bear the appropriate basic marking in 3.3a.
    [Revise item b as follows:]
    b. Manifest Mailings. The basic marking must appear in the postage 
area on each piece as required in 3.3a. The two-letter rate category 
code required in the keyline on manifest mailing pieces prepared under 
705.2.0, Manifest Mailing System, meets the requirement for other rate 
markings.
* * * * *

230 Discount Letters and Cards: First-Class Mail

233 Rates and Eligibility

1.0 Rates and Fees for First-Class Mail

1.1 Rate Application

    [Revise 1.1 to add ``letter'' as follows:]
    Postage is based on the letter rate that applies to the weight of 
each addressed piece.

1.2 Rate Computation for First-Class Mail Letters

    [Revise the first sentence in 1.2 to add ``letter'' as follows:]
    First-Class Mail letter rates are charged per ounce or fraction 
thereof; any fraction of an ounce is considered a whole ounce. For 
example, if a piece weighs 1.2 ounces, the weight (postage) increment 
is 2 ounces. The minimum postage per addressed piece is that for a 
piece weighing 1 ounce.
* * * * *
    [Delete 1.13, Carrier Route Automation Cards, and 1.14, Carrier 
Route Automation Letters. Renumber 1.15 through 1.19 as new 1.13 
through 1.17.]
* * * * *

3.0 Basic Standards for First-Class Mail Letters

3.1 Description of Service

* * * * *

3.1.2 Rate Options

    [Revise 3.1.2 as follows:]
    First-Class Mail letters offer shape-based single-piece rates in 
133.1.0 and discounted rates in 1.0 for presorted mailings of 500 or 
more pieces that weigh 3.5 ounces or less.
* * * * *

3.3 Additional Basic Standards for First-Class Mail

    [Revise introductory text in 3.3 as follows:]
    All pieces of presorted First-Class Mail letters must:
* * * * *
    [Revise the weight in item b as follows:]
    b. Weigh 3.5 ounces or less.
* * * * *

[[Page 15375]]

4.0 Additional Eligibility Standards for Nonautomation First-Class Mail 
Letters

* * * * *

4.3 Nonmachinable Surcharge for Letter-Size Pieces

    [Revise 4.3 as follows:]
    The nonmachinable surcharge in 1.14 applies to letter-size pieces 
(except card-rate pieces) that weigh 1 ounce or less and meet one or 
more of the nonmachinable characteristics in 201.2.1. Nonmachinable 
letters over 1 ounce are charged the First-Class Mail letter rate based 
on weight.
    [Revise heading of 5.0 to delete ``Carrier Route'' as follows:]

5.0 Additional Eligibility Standards for Automation Rate First-Class 
Mail Letters

    [Revise heading of 5.1 as follows:]

5.1 Basic Standards for Automation First-Class Mail Letters

    All pieces in a First-Class Mail automation rate mailing must:
* * * * *
    [Delete item d2. Move text in item d1 into item d as follows.]
    d. Bear a delivery address that includes the correct ZIP Code, 
ZIP+4 code, or numeric equivalent to the delivery point barcode (DPBC) 
and that meets the address matching and coding standards in 5.6, 
Address Standards for Barcoded Pieces, and 708.3.0, Coding Accuracy 
Support System (CASS).
* * * * *
    [Delete 5.2, Carrier Route Accuracy, and renumber 5.3 and 5.4 as 
new 5.2 and 5.3.]
* * * * *

5.2 Maximum Weight for Automation Letters

    [Revise renumbered 5.2 to change maximum weight from 3.3 to 3.5 
ounces as follows:]
    Maximum weight for First-Class Mail automation letters is 3.5 
ounces (0.2188 pound) (see 201.3.13.4, Heavy Letter Mail, for pieces 
heavier than 3 ounces).

5.3 Rate Application--Automation Cards and Letters

    Automation rates apply to each piece that is sorted under 235.6.0 
into the corresponding qualifying groups:
    [Delete item a. Renumber items b through e as new items a through d 
and revise as follows:]
    a. Groups of 150 or more pieces in 5-digit/scheme trays qualify for 
the 5-digit rate. Preparation to qualify for the 5-digit rate is 
optional. Pieces placed in full 3-digit/scheme trays in lieu of 5-
digit/scheme overflow trays under 235.6.6 are eligible for the 5-digit 
rates.
    b. Groups of 150 or more pieces in 3-digit/scheme trays qualify for 
the 3-digit rate. Pieces placed in full AADC trays in lieu of 3-digit/
scheme overflow trays under 235.6.6 are eligible for the 3-digit rates.
    c. Groups of fewer than 150 pieces in origin 3-digit/scheme trays 
and all pieces in AADC trays qualify