Change in Rates of General Applicability for a Competitive Product, 6219-6221 [E8-1778]
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Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices
to be added to the distribution, please
contact the Office of the Secretary,
Washington, DC 20555 (301–415–1969).
In addition, distribution of this meeting
notice over the Internet system is
available. If you are interested in
receiving this Commission meeting
schedule electronically, please send an
electronic message to dkw@nrc.gov.
Dated: January 29, 2008.
R. Michelle Schroll,
Office of the Secretary.
[FR Doc. 08–475 Filed 1–30–08; 10:15 am]
PENSION BENEFIT GUARANTY
CORPORATION
Submission of Information Collection
for OMB Review; Comment Request;
Liability for Termination of SingleEmployer Plans
Pension Benefit Guaranty
Corporation.
ACTION: Notice of request for extension
of OMB approval.
mstockstill on PROD1PC66 with NOTICES
AGENCY:
SUMMARY: The Pension Benefit Guaranty
Corporation (‘‘PBGC’’) is requesting that
the Office of Management and Budget
(‘‘OMB’’) extend approval, under the
Paperwork Reduction Act, of a
collection of information in its
regulation on Liability for Termination
of Single-Employer Plans, 29 CFR Part
4062 (OMB control number 1212–0017;
expires February 29, 2008). This notice
informs the public of the PBGC’s request
and solicits public comment on the
collection of information.
DATES: Comments should be submitted
by March 3, 2008.
ADDRESSES: Comments should be sent to
the Office of Information and Regulatory
Affairs, Office of Management and
Budget, Attention: Desk Officer for
Pension Benefit Guaranty Corporation,
via electronic mail at
OIRA_DOCKET@omb.eop.gov or by fax
to (202) 395–6974. Copies of the
collection of information may also be
obtained without charge by writing to
the Disclosure Division of the Office of
the General Counsel of PBGC at the
above address or by visiting the
Disclosure Division or calling 202–326–
4040 during normal business hours.
(TTY and TDD users may call the
Federal relay service toll-free at 1–800–
877–8339 and ask to be connected to
202–326–4040.) PBGC’s regulation on
Liability for Termination of Singleemployer Plans may be accessed on
PBGC’s Web site at https://pbgc.gov/
practitioners/law-regulations-informalguidance/content/page14767.html.
18:22 Jan 31, 2008
Jkt 214001
Thomas H. Gabriel, Attorney,
Legislative and Regulatory Department,
Pension Benefit Guaranty Corporation,
1200 K Street, NW., Washington, DC
20005–4026, 202–326–4024. (For TTY/
TDD users, call the Federal relay service
toll-free at 1–800–877–8339 and ask to
be connected to 202–326–4024.)
Section
4062 of the Employee Retirement
Income Security Act of 1974 provides
that the contributing sponsor of a singleemployer pension plan and members of
the sponsor’s controlled group (‘‘the
employer’’) incur liability (‘‘employer
liability’’) if the plan terminates with
assets insufficient to pay benefit
liabilities under the plan. The PBGC’s
statutory lien for employer liability and
the payment terms for employer liability
are affected by whether and to what
extent employer liability exceeds 30
percent of the employer’s net worth.
Section 4062.6 of the PBGC’s
employer liability regulation (29 CFR
4062.6) requires a contributing sponsor
or member of the contributing sponsor’s
controlled group who believes employer
liability upon plan termination exceeds
30 percent of the employer’s net worth
to so notify the PBGC and to submit net
worth information. This information is
necessary to enable the PBGC to
determine whether and to what extent
employer liability exceeds 30 percent of
the employer’s net worth.
The collection of information under
the regulation has been approved by
OMB under control number 1212–0017
(expires February 29, 2008). The PBGC
is requesting that OMB extend its
approval for three years. An agency may
not conduct or sponsor, and a person is
not required to respond to, a collection
of information unless it displays a
currently valid OMB control number.
The PBGC estimates that an average of
five contributing sponsors or controlled
group members per year will respond to
this collection of information. The
PBGC further estimates that the average
annual burden of this collection of
information will be 12 hours and $3,636
per respondent, with an average total
annual burden of 60 hours and $18,120.
SUPPLEMENTARY INFORMATION:
BILLING CODE 7590–01–P
VerDate Aug<31>2005
FOR FURTHER INFORMATION CONTACT:
Issued in Washington, DC, this 29th day of
January, 2008.
John H. Hanley,
Director, Legislative and Regulatory
Department, Pension Benefit Guaranty
Corporation.
[FR Doc. E8–1874 Filed 1–31–08; 8:45 am]
BILLING CODE 7709–01–P
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6219
POSTAL SERVICE
Change in Rates of General
Applicability for a Competitive Product
AGENCY:
Postal Service.
Notice of a change in rates of
general applicability for a competitive
product.
ACTION:
SUMMARY: This notice sets forth changes
in rates of general applicability for a
competitive product, specifically the
establishment of prices for a Priority
Mail large-sized flat-rate box.
DATES:
Effective Date: March 3, 2008.
FOR FURTHER INFORMATION CONTACT:
Daniel J. Foucheaux, Jr., 202–268–2989.
On
January 17, 2008, pursuant to their
authority under 39 U.S.C. 3632, the
Governors of the Postal Service
established prices for a new large-size
Priority Mail flat-rate box. The
Governors’ Decision and the record of
proceedings in connection with such
decision are reprinted below in
accordance with section 3632(b)(2).
Implementing regulations are published
elsewhere in this issue.
SUPPLEMENTARY INFORMATION:
Neva R. Watson,
Attorney, Legislative.
Decision of the Governors of the United
States Postal Service on the Priority Mail
Large Flat-Rate Box (Governors’ Decision
No. 08–1)
January 17, 2008.
Statement of Explanation and Justification
Pursuant to our authority under section
3632 of title 39, as amended by the Postal
Accountability and Enhancement Act of
2006, we establish the following prices for a
new, larger (approximately 1/2 cubic foot)
Priority Mail flat-rate box: $12.95 for
domestic mail destined to most ZIP Codes,
$10.95 for domestic mailed destined to APO/
FPO ZIP Codes, $29.95 for international mail
destined to Mexico and Canada, and $49.95
for international mail destined to all other
countries. We have reviewed the attached
analysis provided by management and have
evaluated this change in accordance with 39
U.S.C. §§ 3632–3633 and 39 C.F.R. § 3015.2,
which address changes in rates of general
applicability for competitive services.
As background, we first approved the
domestic flat-rate box as an experiment more
than three years ago.1 Subsequently, we
concluded that the experiment was a success,
and we approved a permanent classification
for the flat-rate box as part of the recent
omnibus rate case.2 The existing box has a
volume of 0.34 cubic feet, with a price of
1 Governors’ Decision on Docket No. MC2004–2
(October 29, 2004).
2 Governors’ Decision on Docket No. R2006–1, at
13–14 (March 19, 2007).
E:\FR\FM\01FEN1.SGM
01FEN1
6220
Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices
$8.95.3 The Postal Service extended the flatrate box to international mail in May 2007,
at prices of $23.00 for mail destined to
Canada and Mexico, and $37.00 for mail
destined to all other countries.
The Priority Mail flat-rate box has proven
to provide value to customers in the form of
convenience and ease of use and has made
a positive contribution to postal finances.
This success suggests a place for an
additional Priority Mail flat-rate box. Such an
offering would enhance customer choice,
convenience and ease of use. The larger box
will have a cubic capacity of approximately
1/2 cubic foot, or about 50 percent more than
the current flat-rate box.
As indicated in the attached analysis, the
addition of this new option will benefit the
Priority Mail flat-rate box rate category.
Moreover, the lower rate for APO/FPOdestined ZIP Codes is justified by the
analysis, and provides an opportunity for the
Postal Service to assist American troops
stationed abroad and their families.
Establishment of the larger flat-rate box is
a minor change that does not raise an issue
of subsidization of competitive products by
market dominant products. (39 U.S.C.
§ 3633(a)(1)). The change will have no
negative effects on the ability of Priority Mail
or Priority Mail International to cover
attributable costs (39 U.S.C. § 3633(a)(2)), or
for competitive products as a whole to
comply with 39 U.S.C. § 3633(a)(3), which, as
implemented by 39 C.F.R. § 3015.7(c),
requires competitive products to contribute a
minimum of 5.5 percent to the Postal
Service’s total institutional costs.
Order
The prices specified above for the new flatrate Priority Mail box shall be effective
March 3, 2008. We direct the Secretary to
have this decision published in the Federal
Register in accordance with 39 U.S.C.
§ 3632(b)(2). We also direct management to
file with the Postal Regulatory Commission
appropriate notice of this change.
By The Governors:
James C. Miller III,
Chairman.
Analysis of the Priority Mail Large Flat-Rate
Box
DOMESTIC
The Priority Mail large flat-rate box is 0.52
cubic feet (exterior), with dimensions of
121⁄4’’ x 121⁄4’’ x 6’’ exterior and 12’’ x 12’’
x 51⁄2’’ interior.
Pricing
• $10.95 for Priority Mail shipments to
APO/FPO addresses.
• $12.95 for Priority Mail shipments to all
other addresses.
ESTIMATED PROFITABILITY
[FY 2007 Basis]
Non-APO/FPO
addresses
Price .........................................................................................................................................................................
Est. Unit Cost ...........................................................................................................................................................
Est. Unit Contribution ...............................................................................................................................................
Implicit Cost Coverage ............................................................................................................................................
$12.95
$8.03
$4.92
161%
APO/FPO
addresses
$10.95
$8.46
$2.49
129%
Note: Calculations include the incremental cost of packaging (over and above the approximately 10 cents per piece ‘‘baked in’’ to every Priority Mail rate cell).
Support for the Domestic Prices
Compliance With Relevant Law
Given the most recent price change,
estimated domestic Priority Mail cost
coverage is currently in the range of 135 to
140 percent. The $12.95 price reflects a
premium comparable to that established for
the original flat-rate box in 2004, which
proved sufficient to protect against the risk
of contribution leakage. A preferential $10.95
price is offered for shipments to APO/FPO
addresses. These shipments account for only
seven percent of total current flat-rate box
volume. The price is sufficient to provide
adequate contribution because of the unique
demand characteristics of care-package
shipments.
By sheer weight of volume, the primary use
of the larger flat-rate box will be for general
domestic Priority Mail shipments. Based on
experience with the existing flat-rate box, the
premium built into the $12.95 price is likely
to produce an increase in contribution. Some
contribution leakage is likely to result from
lower-volume APO/FPO applications, but the
amount should be minimal. As shown above,
the Priority Mail large flat-rate box will easily
cover its costs. Therefore, the domestic
Priority Mail large flat-rate box is not
expected to raise an issue of subsidization of
competitive products by market dominant
products (39 U.S.C. § 3633(a)(1)); or
undermine the ability of Priority Mail to
cover its attributable costs (39 U.S.C.
§ 3633(a)(2)); or undermine the ability of
competitive products as a whole to comply
with 39 U.S.C. § 3633(a)(3), which, as
implemented by 39 CFR § 3015.7(c), requires
competitive products to contribute a
minimum of 5.5 percent to the Postal
Service’s total institutional costs.
INTERNATIONAL
The same flat-rate box will be used for
Priority Mail International (PMI).
Pricing
• $29.95 for Priority Mail International
shipments to Canada and Mexico.
• $49.95 for Priority Mail International
shipments to the rest of the world.
ESTIMATED PROFITABILITY
[FY 2007 Basis]
Canada and
Mexico
mstockstill on PROD1PC66 with NOTICES
Price .........................................................................................................................................................................
Est. Unit Cost ...........................................................................................................................................................
Est. Unit Contribution ...............................................................................................................................................
Implicit Cost Coverage ............................................................................................................................................
Support for the International Prices
The Canada and Mexico price of $29.95 and
the Rest-of-the-World price of $49.95 yield a
weighted-average implicit cost coverage the
The estimated overall Priority Mail
International cost coverage is 128 percent.
18:22 Jan 31, 2008
Jkt 214001
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Sfmt 4703
$49.95
$39.83
$10.12
125%
same as PMI as a whole, 128 percent. The
risk of contribution leakage is contained by
the imposition of a 20-pound weight limit.
3 Governors’ Decision on Reconsideration, Docket
No. R2006–1, at 1–2 (May 2, 2007).
VerDate Aug<31>2005
$29.95
$21.46
$8.49
140%
All other
countries
E:\FR\FM\01FEN1.SGM
01FEN1
Federal Register / Vol. 73, No. 22 / Friday, February 1, 2008 / Notices
Certification of Governors’ Vote in the
Governors’ Decision No. 08–1
I hereby certify that the following
Governors voted by paper ballot on adopting
Governors’ Decision No. 08–1:
Mickey D. Barnett
James H. Bilbray
Carolyn Lewis Gallagher
Louis J. Giuliano
Alan C. Kessler
Thurgood Marshall, Jr.
James C. Miller III
Katherine C. Tobin
Ellen C. Williams
The vote was 9–0 in favor.
Wendy A. Hocking,
Secretary of the Board of Governors.
[FR Doc. E8–1778 Filed 1–31–08; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Change in Rates of General
Applicability for a Competitive Product
Postal Service.
ACTION: Notice of a change in rates of
general applicability for a competitive
product.
mstockstill on PROD1PC66 with NOTICES
AGENCY:
SUMMARY: This notice sets forth changes
in rates of general applicability for a
competitive product, specifically the
establishment of a premium for
guaranteed delivery of Express Mail
pieces on a Sunday or holiday.
EFFECTIVE DATE: March 3, 2008.
FOR FURTHER INFORMATION CONTACT:
Daniel J. Foucheaux, Jr., 202–268–2989.
SUPPLEMENTARY INFORMATION: On
January 17, 2008, pursuant to their
authority under 39 U.S.C. 3632, the
Governors of the Postal Service
established a premium for guaranteed
VerDate Aug<31>2005
18:22 Jan 31, 2008
Jkt 214001
Sunday or holiday delivery of Express
Mail pieces. The Governors’ Decision
and the record of proceedings in
connection with such decision are
reprinted below in accordance with
§ 3632(b)(2). Implementing regulations
are published elsewhere in this issue.
Neva R. Watson,
Attorney, Legislative.
Decision of the Governors of the United
States Postal Service on a Premium For
Express Mail Pieces Guaranteed for Delivery
on a Sunday or Holiday (Governors’
Decision No. 08–2)
January 17, 2008
Statement of Explanation and Justification
Pursuant to our authority under section
3632 of title 39, as amended by the Postal
Accountability and Enhancement Act of
2006, we establish a premium of $12.50
above the current price for delivery of nonmanifest Express Mail pieces that are
guaranteed for delivery on a Sunday or
holiday. We have reviewed the attached
analysis provided by management and have
evaluated this change in accordance with 39
U.S.C. 3632–3633 and 39 CFR 3015.2, which
address changes in rates of general
applicability for competitive services.
As indicated in the attached analysis,
Express Mail pieces guaranteed for delivery
on a Sunday or holiday pay the same price
as pieces guaranteed for Monday through
Saturday delivery, even though the Postal
Service incurs additional costs of $5.50 for
such pieces. The Postal Service is the only
carrier in the highly competitive express
delivery market that offers delivery on
Sundays, as well as many holidays. The
Postal Service’s competitors charge at least
$12.50 for items that are guaranteed for
delivery on Saturday, a day on which they
do not ordinarily provide delivery. The
analysis of demand and contribution in the
attachment indicates that it is likely a $12.50
premium on non-manifest Express Mail
pieces presented for Sunday or holiday
delivery will result in a net gain in
contribution for both Express Mail service
and for competitive products as a whole.
Based on this analysis, we find that this
proposal complies with 39 U.S.C. 3633(a):
The fee does not raise an issue of
subsidization of competitive products by
market dominant products (39 U.S.C.
3633(a)(1)); approving it would have no
negative effects on the ability of Express Mail
to cover its attributable costs (39 U.S.C.
3633(a)(2)); and it would not negatively effect
the ability of competitive products as a whole
to comply with 39 U.S.C. 3633(a)(3), which,
as implemented by 39 CFR 3015.7 (c),
requires competitive products to contribute a
minimum of 5.5 percent to the Postal
Service’s total institutional costs. Indeed, the
analysis indicates that this change should
result in increased contribution for the
Express Mail product, and for competitive
products as a whole.
Order
Effective March 3, 2008, a premium of
$12.50 shall be added to the price of each
PO 00000
Frm 00113
Fmt 4703
Sfmt 4703
non-manifest Express Mail piece that is
guaranteed for delivery on a Sunday or
holiday. We direct the Secretary to have this
decision published in the Federal Register in
accordance with 39 U.S.C. 3632(b)(2). We
also direct management to file with the Postal
Regulatory Commission appropriate notice of
this change.
By the Governors:
Analysis of the Express Mail Sunday/
Holiday Premium
The U.S. Postal Service currently accepts
approximately 433,000 Express Mail pieces
per year for Sunday or holiday delivery. A
Sunday delivery costs the Postal Service
$5.50 more than a Monday–Saturday
delivery. A premium for Express Mail pieces
committed for delivery on Sunday or a
holiday is sustainable in the marketplace,
and would allow the Postal Service to
capture additional value provided by a
unique, premium service. A $12.50 premium
will be accepted by customers, generate
additional contribution for the Postal Service,
and provide protection from risk.
Price and Service Advantages in the
Marketplace
The Postal Service is the only carrier to
offer Sunday delivery, as well as delivery on
many holidays. Other carriers impose a
surcharge for Saturday delivery. UPS and
FedEx currently charge an additional $12.50
for Saturday delivery; DHL charges $15.00.
The Express Mail Sunday/Holiday premium
would be equal to or less than what
competitors charge for Saturday delivery.
The $12.50 charge also represents less of a
premium over Monday–Saturday average
prices than the surcharge other carriers
charge for Saturday delivery. A charge of
$12.50 represents a 72 percent premium over
the current average Express Mail price, while
the same amount adds 81 percent to the
average price of an overnight FedEx or UPS
parcel.
Rationale for the Premium Amount
$12.50 is a price point at which we can
capture substantial contribution without
diverting customers away from postal
services. Because the premium represents the
value of delivering on a non-business day
and is equal to or lower than what
competitors charge for a similar service,
customers will likely accept a charge at this
level.
There may be different demand for Sunday
delivery than for other days of the week.
Although overall Express Mail volume has
decreased approximately 12 percent since the
May 2007 rate change, volume for Sunday
has actually risen more than 10 percent.
Given the small volume delivered on
Sunday, firm conclusions about elasticity
cannot be drawn, yet the increase does
suggest that Sunday Express Mail pieces are
less price sensitive than the rest of Express
Mail.
E:\FR\FM\01FEN1.SGM
01FEN1
EN01FE08.027</GPH>
Compliance With Relevant Law
The Priority Mail large flat-rate box will
represent a small percentage of total Priority
Mail International (PMI) volume. It,
therefore, can have only a limited effect on
total contribution, but it is designed to
increase contribution by having a price set
approximately at the average for similarweight PMI pieces. It may also increase
contribution by increasing total PMI usage.
Any potential for contribution loss is
partially offset by the imposition of a 20pound limit. As shown above, the large flatrate box will easily cover its costs. Therefore,
the Priority Mail International large flat-rate
box will not raise an issue of subsidization
of competitive products by market dominant
products (39 U.S.C. § 3633(a)(1)); or
undermine the ability of Priority Mail
International to cover its attributable costs
(39 U.S.C. § 3633(a)(2)); or undermine the
ability of competitive products as a whole to
comply with 39 U.S.C. § 3633(a)(3), which, as
implemented by 39 CFR § 3015.7(c), requires
competitive products to contribute a
minimum of 5.5 percent to the Postal
Service’s total institutional costs.
6221
]]>Agencies
[Federal Register Volume 73, Number 22 (Friday, February 1, 2008)]
[Notices]
[Pages 6219-6221]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1778]
=======================================================================
-----------------------------------------------------------------------
POSTAL SERVICE
Change in Rates of General Applicability for a Competitive
Product
AGENCY: Postal Service.
ACTION: Notice of a change in rates of general applicability for a
competitive product.
-----------------------------------------------------------------------
SUMMARY: This notice sets forth changes in rates of general
applicability for a competitive product, specifically the establishment
of prices for a Priority Mail large-sized flat-rate box.
DATES: Effective Date: March 3, 2008.
FOR FURTHER INFORMATION CONTACT: Daniel J. Foucheaux, Jr., 202-268-
2989.
SUPPLEMENTARY INFORMATION: On January 17, 2008, pursuant to their
authority under 39 U.S.C. 3632, the Governors of the Postal Service
established prices for a new large-size Priority Mail flat-rate box.
The Governors' Decision and the record of proceedings in connection
with such decision are reprinted below in accordance with section
3632(b)(2). Implementing regulations are published elsewhere in this
issue.
Neva R. Watson,
Attorney, Legislative.
Decision of the Governors of the United States Postal Service on the
Priority Mail Large Flat-Rate Box (Governors' Decision No. 08-1)
January 17, 2008.
Statement of Explanation and Justification
Pursuant to our authority under section 3632 of title 39, as
amended by the Postal Accountability and Enhancement Act of 2006, we
establish the following prices for a new, larger (approximately 1/2
cubic foot) Priority Mail flat-rate box: $12.95 for domestic mail
destined to most ZIP Codes, $10.95 for domestic mailed destined to
APO/FPO ZIP Codes, $29.95 for international mail destined to Mexico
and Canada, and $49.95 for international mail destined to all other
countries. We have reviewed the attached analysis provided by
management and have evaluated this change in accordance with 39
U.S.C. Sec. Sec. 3632-3633 and 39 C.F.R. Sec. 3015.2, which
address changes in rates of general applicability for competitive
services.
As background, we first approved the domestic flat-rate box as
an experiment more than three years ago.\1\ Subsequently, we
concluded that the experiment was a success, and we approved a
permanent classification for the flat-rate box as part of the recent
omnibus rate case.\2\ The existing box has a volume of 0.34 cubic
feet, with a price of
[[Page 6220]]
$8.95.\3\ The Postal Service extended the flat-rate box to
international mail in May 2007, at prices of $23.00 for mail
destined to Canada and Mexico, and $37.00 for mail destined to all
other countries.
---------------------------------------------------------------------------
\1\ Governors' Decision on Docket No. MC2004-2 (October 29,
2004).
\2\ Governors' Decision on Docket No. R2006-1, at 13-14 (March
19, 2007).
\3\ Governors' Decision on Reconsideration, Docket No. R2006-1,
at 1-2 (May 2, 2007).
---------------------------------------------------------------------------
The Priority Mail flat-rate box has proven to provide value to
customers in the form of convenience and ease of use and has made a
positive contribution to postal finances. This success suggests a
place for an additional Priority Mail flat-rate box. Such an
offering would enhance customer choice, convenience and ease of use.
The larger box will have a cubic capacity of approximately 1/2 cubic
foot, or about 50 percent more than the current flat-rate box.
As indicated in the attached analysis, the addition of this new
option will benefit the Priority Mail flat-rate box rate category.
Moreover, the lower rate for APO/FPO-destined ZIP Codes is justified
by the analysis, and provides an opportunity for the Postal Service
to assist American troops stationed abroad and their families.
Establishment of the larger flat-rate box is a minor change that
does not raise an issue of subsidization of competitive products by
market dominant products. (39 U.S.C. Sec. 3633(a)(1)). The change
will have no negative effects on the ability of Priority Mail or
Priority Mail International to cover attributable costs (39 U.S.C.
Sec. 3633(a)(2)), or for competitive products as a whole to comply
with 39 U.S.C. Sec. 3633(a)(3), which, as implemented by 39 C.F.R.
Sec. 3015.7(c), requires competitive products to contribute a
minimum of 5.5 percent to the Postal Service's total institutional
costs.
Order
The prices specified above for the new flat-rate Priority Mail
box shall be effective March 3, 2008. We direct the Secretary to
have this decision published in the Federal Register in accordance
with 39 U.S.C. Sec. 3632(b)(2). We also direct management to file
with the Postal Regulatory Commission appropriate notice of this
change.
By The Governors:
James C. Miller III,
Chairman.
Analysis of the Priority Mail Large Flat-Rate Box
DOMESTIC
The Priority Mail large flat-rate box is 0.52 cubic feet
(exterior), with dimensions of 12\1/4\'' x 12\1/4\'' x 6'' exterior
and 12'' x 12'' x 5\1/2\'' interior.
Pricing
$10.95 for Priority Mail shipments to APO/FPO
addresses.
$12.95 for Priority Mail shipments to all other
addresses.
Estimated Profitability
[FY 2007 Basis]
------------------------------------------------------------------------
Non-APO/FPO APO/FPO
addresses addresses
------------------------------------------------------------------------
Price................................... $12.95 $10.95
Est. Unit Cost.......................... $8.03 $8.46
Est. Unit Contribution.................. $4.92 $2.49
Implicit Cost Coverage.................. 161% 129%
------------------------------------------------------------------------
Note: Calculations include the incremental cost of packaging (over and
above the approximately 10 cents per piece ``baked in'' to every
Priority Mail rate cell).
Support for the Domestic Prices
Given the most recent price change, estimated domestic Priority
Mail cost coverage is currently in the range of 135 to 140 percent.
The $12.95 price reflects a premium comparable to that established
for the original flat-rate box in 2004, which proved sufficient to
protect against the risk of contribution leakage. A preferential
$10.95 price is offered for shipments to APO/FPO addresses. These
shipments account for only seven percent of total current flat-rate
box volume. The price is sufficient to provide adequate contribution
because of the unique demand characteristics of care-package
shipments.
Compliance With Relevant Law
By sheer weight of volume, the primary use of the larger flat-
rate box will be for general domestic Priority Mail shipments. Based
on experience with the existing flat-rate box, the premium built
into the $12.95 price is likely to produce an increase in
contribution. Some contribution leakage is likely to result from
lower-volume APO/FPO applications, but the amount should be minimal.
As shown above, the Priority Mail large flat-rate box will easily
cover its costs. Therefore, the domestic Priority Mail large flat-
rate box is not expected to raise an issue of subsidization of
competitive products by market dominant products (39 U.S.C. Sec.
3633(a)(1)); or undermine the ability of Priority Mail to cover its
attributable costs (39 U.S.C. Sec. 3633(a)(2)); or undermine the
ability of competitive products as a whole to comply with 39 U.S.C.
Sec. 3633(a)(3), which, as implemented by 39 CFR Sec. 3015.7(c),
requires competitive products to contribute a minimum of 5.5 percent
to the Postal Service's total institutional costs.
INTERNATIONAL
The same flat-rate box will be used for Priority Mail
International (PMI).
Pricing
$29.95 for Priority Mail International shipments to
Canada and Mexico.
$49.95 for Priority Mail International shipments to the
rest of the world.
Estimated Profitability
[FY 2007 Basis]
------------------------------------------------------------------------
Canada and All other
Mexico countries
------------------------------------------------------------------------
Price................................... $29.95 $49.95
Est. Unit Cost.......................... $21.46 $39.83
Est. Unit Contribution.................. $8.49 $10.12
Implicit Cost Coverage.................. 140% 125%
------------------------------------------------------------------------
Support for the International Prices
The estimated overall Priority Mail International cost coverage
is 128 percent. The Canada and Mexico price of $29.95 and the Rest-
of-the-World price of $49.95 yield a weighted-average implicit cost
coverage the same as PMI as a whole, 128 percent. The risk of
contribution leakage is contained by the imposition of a 20-pound
weight limit.
[[Page 6221]]
Compliance With Relevant Law
The Priority Mail large flat-rate box will represent a small
percentage of total Priority Mail International (PMI) volume. It,
therefore, can have only a limited effect on total contribution, but
it is designed to increase contribution by having a price set
approximately at the average for similar-weight PMI pieces. It may
also increase contribution by increasing total PMI usage. Any
potential for contribution loss is partially offset by the
imposition of a 20-pound limit. As shown above, the large flat-rate
box will easily cover its costs. Therefore, the Priority Mail
International large flat-rate box will not raise an issue of
subsidization of competitive products by market dominant products
(39 U.S.C. Sec. 3633(a)(1)); or undermine the ability of Priority
Mail International to cover its attributable costs (39 U.S.C. Sec.
3633(a)(2)); or undermine the ability of competitive products as a
whole to comply with 39 U.S.C. Sec. 3633(a)(3), which, as
implemented by 39 CFR Sec. 3015.7(c), requires competitive products
to contribute a minimum of 5.5 percent to the Postal Service's total
institutional costs.
Certification of Governors' Vote in the Governors' Decision No. 08-1
I hereby certify that the following Governors voted by paper
ballot on adopting Governors' Decision No. 08-1:
Mickey D. Barnett
James H. Bilbray
Carolyn Lewis Gallagher
Louis J. Giuliano
Alan C. Kessler
Thurgood Marshall, Jr.
James C. Miller III
Katherine C. Tobin
Ellen C. Williams
The vote was 9-0 in favor.
Wendy A. Hocking,
Secretary of the Board of Governors.
[FR Doc. E8-1778 Filed 1-31-08; 8:45 am]
BILLING CODE 7710-12-P
