International Mail Products and Special Services, 41051-41056 [E9-19366]
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Priority Mail Contract 2 (MC2009–2 and
CP2009–3)
Priority Mail Contract 3 (MC2009–4 and
CP2009–5)
Priority Mail Contract 4 (MC2009–5 and
CP2009–6)
Priority Mail Contract 5 (MC2009–21 and
CP2009–26)
Priority Mail Contract 6 (MC2009–25 and
CP2009–30)
Priority Mail Contract 7 (MC2009–25 and
CP2009–31)
Priority Mail Contract 8 (MC2009–25 and
CP2009–32)
Priority Mail Contract 9 (MC2009–25 and
CP2009–33)
Priority Mail Contract 10 (MC2009–25 and
CP2009–34)
Priority Mail Contract 11 (MC2009–27 and
CP2009–37)
Priority Mail Contract 12 (MC2009–28 and
CP2009–38)
Priority Mail Contract 13 (MC2009–29 and
CP2009–39)
Priority Mail Contract 14 (MC2009–30 and
CP2009–40)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009–26 and
CP2009–36)
Global Direct Contracts (MC2009–9,
CP2009–10, and CP2009–11)
Global Expedited Package Services (GEPS)
Contracts
GEPS 1 (CP2008–5, CP2008–11, CP2008–
12, and CP2008–13, CP2008–18,
CP2008–19, CP2008–20, CP2008–21,
CP2008–22, CP2008–23, and CP2008–24)
Global Plus Contracts
Global Plus 1 (CP2008–8, CP2008–46 and
CP2009–47)
Global Plus 2 (MC2008–7, CP2008–16 and
CP2008–17)
Inbound International
Inbound Direct Entry Contracts with
Foreign Postal Administrations
(MC2008–6, CP2008–14 and CP2008–15)
International Business Reply Service
Competitive Contract 1 (MC2009–14 and
CP2009–20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
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[Reserved for Product Description]
International Direct Sacks—M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU
rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C—Glossary of Terms and Conditions
[Reserved]
Part D—Country Price Lists for International
Mail [Reserved]
[FR Doc. E9–19504 Filed 8–13–09; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009–26 and CP2009–36;
Order No. 264]
International Mail Products and Special
Services
Postal Regulatory Commission.
Final rule.
AGENCY:
ACTION:
SUMMARY: The Commission is adding
Direct Entry Parcels Contracts and two
related special services to the
Competitive Product List. The two
special services are categorized within
International Ancillary Services. This
action is consistent with changes in a
recent law governing postal operations.
Republication of the lists of market
dominant and competitive products is
also consistent with requirements in the
new law.
DATES: Effective August 14, 2009 and is
applicable beginning July 31, 2009.
FOR FURTHER INFORMATION CONTACT:
Stephen L. Sharfman at 202–789–6820
or stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory
History, 74 FR 30646 (June 29, 2009).
I. Introduction
II. Background
III. Comments
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IV. Commission Analysis
V. Ordering Paragraphs
I. Introduction
The Postal Service seeks to add Direct
Entry Parcels (DEP) Contracts,
International Return Service, and
Harmonization Service to the
Competitive Product List. For the
reasons discussed below, the
Commission approves adding the
specific DEP contract (DEP 1) as a new
product, along with International Return
Service and Harmonization Service as
ancillary (or special) services.
II. Background
On June 11, 2009, the Postal Service
filed a formal request pursuant to 39
U.S.C. 3642 and 39 CFR 3020.30 et seq.
to add Direct Entry Parcels Contracts,
International Return Service, and
Harmonization Service to the
Competitive Products List.1 The Postal
Service indicates that Governors’
Decision No. 09–7, dated June 10, 2009,
establishes prices and classifications not
of general applicability for DEP
contracts and the ancillary services of
International Return Service and
Harmonization Service.2 The Request
has been assigned Docket No. MC2009–
26.
The Postal Service
contemporaneously filed a DEP contract
pursuant to 39 U.S.C. 3632(b)(3) and 39
CFR 3015.5. Request at 1. The contract
has been assigned Docket No. CP2009–
36.
The Request incorporates (1) A
Statement of Supporting Justification as
required by 39 CFR 3020.32; 3
(2) Governors’ Decision No. 09–7
authorizing the new product and
services; 4 (3) proposed changes to the
Mail Classification Schedule (MCS); 5
(4) the pricing formulas applicable to
DEP contracts, International Return
Service and Harmonization Service; 6
(5) an analysis of those pricing
formulas; 7 (6) certification of
1 Request of the United States Postal Service to
Add Direct Entry Parcels Contracts, International
Return Service, and Harmonization Service to the
Competitive Products List, and Notice of Filing
(Under Seal) of Contract and Enabling Governors’
Decision, June 11, 2009 (Request).
2 Governors’ Decision No. 09–7, filed June 11,
2009, establishes prices and classifications not of
general applicability for Direct Entry Parcels
Contracts, International Return Service, and
Harmonization Service Offered with Customized
Agreements. Id. at 1.
3 Attachment 1 to the Request.
4 Attachment 2 to the Request.
5 Attachment 2, Attachments A–1, A–2, and A–3
to the Request.
6 Attachment 2, Attachments B–1, B–2, and B–3
to the Request.
7 Attachment 2, Attachments C–1, C–2, and C–3
to the Request.
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compliance with 39 U.S.C. 3633(a); 8 (7)
a redacted version of the contract; 9 and
(8) certification that the instant contract
(DEP 1) complies with 39 U.S.C.
3633(a).10 Substantively, the Request
seeks to add the DEP contract, and the
ancillary services of International
Return Service, and Harmonization
Service to the Competitive Products
List. Request at 1–2.
In the Statement of Supporting
Justification, Frank Cebello, Executive
Director, Global Business Management,
asserts that the service to be provided
under the contract will cover its
attributable costs, make a positive
contribution to institutional costs, and
increase contribution toward the
requisite 5.5 percent of the Postal
Service’s total institutional costs. Id.,
Attachment 1. Thus, Mr. Cebello
contends there will be no issue of
subsidization of competitive products
by market dominant products as a result
of this contract. Id.
The Postal Service represents that the
instant contract is consistent with 39
U.S.C. 3633(a), 39 CFR 3015.5 and 39
CFR 3015.7. See id., Attachment 2. DEP
contracts include International Return
Service and Harmonization Service as
optional features which reflect the
proposed MCS language in Attachments
A–2 and A–3 of the Governors’
Decision, respectively. DEP contracts
provide for mail acceptance within the
United States, transportation to a
receiving country of parcels bearing the
appropriate foreign indicia,
transportation to customs within the
receiving country, and customs
clearance and prepayment of customs
duties and taxes to the receiving
country. The Postal Service states that
International Return Service provides
for the return of refused or
undeliverable items. It states that
Harmonization Service offers review of
outbound items by a licensed customs
broker and the broker’s assignment of
Harmonized Tariff Schedule codes to
facilitate assessment of customs duties.
Id. at 2–3. The Postal Service notes that
the latter two services will only be
available through customized
agreements, in particular through DEP
contracts similar to the instant contract.
The contract becomes effective within
30 days after the Postal Service notifies
the customer that it has received all
required reviews and the Commission
has provided all necessary regulatory
approvals. The term of the contract is
one year from the effective date.
8 Attachment
2, Attachment D to the Request.
3 to the Request.
10 Attachment 4 to the Request.
9 Attachment
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The Postal Service filed much of the
supporting materials, including
Governors’ Decision 09–7, and related
financial information, including
analysis of the instant contract in
redacted versions and under seal. In its
Request, the Postal Service maintains
that the contract and related financial
information, including the customer’s
name and the accompanying analyses
that provide prices, terms, conditions,
and financial projections, should remain
under seal. Id. at 3–4.
The Postal Service requests that the
Commission list the instant DEP
contract, as well as any subsequent
functionally equivalent DEP contracts,
as one product on the Competitive
Product List. Id. at 1–2. The Request
advances reasons why DEP contracts as
described in the proposed MCS
language are in conformity with the
requirements of 39 U.S.C. 3642 as
competitive products. Among other
things, the Postal Service asserts that
DEP contracts are intended for
merchandise exempt from the Private
Express Statutes; that the Postal
Accountability and Enhancement Act
(PAEA) classifies bulk international
mail as competitive; and that classifying
DEP contracts as competitive is
consistent with Commission precedent.
It contends that even though the senders
of DEP items may mail individual
pieces, the contract customer has
committed to compensate the Postal
Service for a bulk volume of DEP items.
The Postal Service also notes that Direct
Entry Parcels, Harmonization Service,
and International Return Service are
contractual services not available to
individual retail customers. Id. at 4–5.
In Order No. 228, the Commission
gave notice of the two dockets,
appointed a public representative, and
provided the public with an opportunity
to comment.11 On June 26, 2009,
Chairman’s Information Request No. 1
(CHIR No. 1) was issued. The Postal
Service filed its response to CHIR No. 1
on July 2, 2009.12 The Postal Service
responses provided some of the
information requested in CHIR No. 1
and indicated that revised financial
information in response to questions 2,
5, 8 and 9 would be filed as soon as it
could be completed. On July 15, 2009,
the Postal Service filed the revised
11 PRC
Order No. 228, Notice and Order
Concerning Direct Entry Parcels Contract,
International Return Service and Harmonization
Service Negotiated Service Agreements, June 22,
2009 (Order No. 228).
12 Response of the United States Postal Service to
Chairman’s Information Request No. 1, July 2, 2009.
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financial information as referenced in
its July 2, 2009 response.13
III. Comments
Comments were filed by the Public
Representative on June 29, 2009 (Public
Representative Comments). No filings
were submitted by any other interested
parties.
The Public Representative states that
the Governors’ Decision authorizes DEP
contracts subject to price floor and price
ceiling formulas. Public Representative
Comments at 1. He contends the instant
contract is specifically authorized by the
Governors, but any additional DEP
contracts would require a separate
Governors’ Decision in order to comply
with the law. Id. The Public
Representative contends that the price
formulas in Governors’ Decision No. 09–
7 use ex ante values which will change
over the life of the contract. He notes
that the contract permits (but does not
require) changing prices if some of the
variables in the formula change.
Therefore, he concludes there is some
risk that a change in the variables under
the contract could eliminate the
contract’s profit. Id. at 2. The Public
Representative also states it appears the
volume under the instant contract is
new to the Postal Service. Id.
IV. Commission Analysis
The Commission has reviewed the
Request, the Agreement, the financial
analysis filed under seal, supplemental
information filed in response to CHIR
No. 1, and the comments filed by the
Public Representative.
As a preliminary matter, it may be
useful to outline the Request before the
Commission. The Postal Service seeks to
add DEP Contracts, International Return
Service, and Harmonization Service to
the Competitive Product List within the
Mail Classification Schedule. Request at
1. While the Request characterizes these
as three products (id.), it appears that
International Return Service and
Harmonization Service are ancillary (or
special) services available only in
conjunction with DEP contracts or other
customized agreements. Id. at 1, n.1 and
3. More specifically, the Postal Service
requests that the instant DEP contract,
together with any subsequent
functionally equivalent DEP contracts,
be listed as one product on the
Competitive Product List.14
13 Notice of the United States Postal Service
Regarding the Filing of Library Reference USPS–
CP2009–36NP3, July 15, 2009 and Notice of the
United States Postal Service Regarding the Filing of
Library Reference USPS–CP2009–36NP4.
14 Id. at 1–2. See also id. at 5 (urging the
Commission to add ‘‘this product [DEP Contracts]
to the competitive products list * * *.’’); and at 6
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The Governors’ Decision establishes
classifications and prices for DEP
Contracts, a new product, and
International Return Service and
Harmonization Service, two special
services. The proposed draft MCS
language describes these classifications.
The instant contract is the first DEP
contract executed pursuant to the
Governors’ Decision. The Commission’s
consideration of the Request will thus
focus on that contract and the ancillary
(or special) services offered with it. As
discussed below, DEP 1, International
Return Service and Harmonization
Service will be added to the
Competitive Product List and the
proposed classification language will be
added to the MCS. It is premature,
however, to consider the treatment of
any future DEP contracts in this
proceeding. Whether subsequent DEP
contracts, if any, are functionally
equivalent with DEP 1 can be addressed
in the relevant subsequent
proceeding(s).
Statutory requirements. The
Commission’s statutory responsibilities
in this instance entail assigning DEP 1
to either the Market Dominant Product
List or to the Competitive Product List.
39 U.S.C. 3642. As part of this
responsibility, the Commission also
reviews the proposal for compliance
with PAEA requirements. This includes,
for proposed competitive products, a
review of the provisions applicable to
rates for competitive products. 39 U.S.C.
3633.
Product list assignment. In
determining whether to assign DEP 1 as
a product to the Market Dominant
Product List or the Competitive Product
List, the Commission must consider
whether ‘‘the Postal Service exercises
sufficient market power that it can
effectively set the price of such product
substantially above costs, raise prices
significantly, decrease quality, or
decrease output, without risk of losing
a significant level of business to other
firms offering similar products.’’ 39
U.S.C. 3642(b)(1). If so, the product will
be categorized as market dominant. The
competitive category of products shall
consist of all other products.
The Commission is further required to
consider the availability and nature of
enterprises in the private sector engaged
in the delivery of the product, the views
of those who use the product, and the
likely impact on small business
concerns. 39 U.S.C. 3642(b)(3).
The Postal Service states that DEP
contracts are for U.S. based entities that
seek a channel to send merchandise or
(‘‘the Postal Service believes that this DEP Contract
should be added to the competitive products list.’’)
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other articles to their overseas
customers in packaging that has the
‘‘‘look and feel’’’ of domestic items in
the destination country. Request,
Attachment 1, ¶ (d). It states that,
generally, DEP contracts will include
the use of a licensed customs broker to
review items for proper Harmonized
Tariff Schedule classification
(Harmonization Service), and the Postal
Service may arrange the return of
undeliverable or refused items
(International Return Service). The
Postal Service indicates that because of
the competitive nature of international
shipping services, the market does not
permit it to raise prices substantially
above costs and the contract is premised
on prices that provide sufficient
incentive for customers to ship with the
Postal Service rather than a competitor.
Id.
The Postal Service asserts that its
bargaining position is constrained by
the existence of other shippers who can
provide similar services, thus
precluding it from taking unilateral
action to increase prices or decrease
service without the risk of losing
volume to private companies in the
international shipping industry. The
Postal Service also contends that it may
not decrease quality or output without
risking the loss of business to
competitors that offer similar
international parcel delivery services.
Id. It further states that in the proposed
MCS language established by the
Governors, DEP contract items consist of
Parcel Post items that are not subject to
the Private Express Statutes and that
any letters inserted in Direct Entry
Parcels would also likely be within the
letter monopoly exclusion of letters
under the Private Express Statutes. Id.,
¶ (e).
The Postal Service states that the
market for international delivery
services is highly competitive and the
addition of DEP contracts should have
minimal, if any, impact on small
business concerns. It contends that large
shipping companies, consolidators, and
freight forwarders comprise the market
represented by the customers for the
instant contracts, and it is unaware of
any small business that can offer
comparable service for the customer’s
volume. It notes that small businesses
are gaining an additional option for
shipping articles internationally,
beyond the service offered by its
competitors, resulting in a positive
impact on small businesses. Therefore,
the Postal Service concludes the net
impact on small business should be
positive. Id., ¶ (h).
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The Public Representative does not
oppose the proposed classification of
DEP contracts as competitive.
Having considered the statutory
requirements, the support offered by the
Postal Service, and all comments, the
Commission finds that DEP 1 is
appropriately classified as a competitive
product and should be added to the
Competitive Product List.
Cost considerations. The initial
supporting documentation filed by the
Postal Service on June 11, 2009 did not
include source contracts with thirdparty providers to substantiate certain
cost factors. In addition, the rates in the
supporting documentation did not
match the rates in the instant contract.
The Commission had to request the
source contracts and additional
supporting documentation and seek
clarification of discrepancies between
rates in the instant contract and
supporting documentation in order to
complete its analysis.
In its response to CHIR No. 1 on July
15, 2009, the Postal Service filed
supporting documentation which
included two sets of rates. However,
only one set of rates was included in the
instant DEP contract. The Commission
understands that the second set of rates
is only based on projected cost increases
as allowed for in the instant contract
and explained below under ‘‘Pricing
provisions.’’
In future filings, the Postal Service
should provide all supporting source
documentation, including relevant
contracts with third-party providers,
and ensure consistency between rates in
filed contracts and supporting
documentation. Postal Service requests
that contain inconsistent or missing
information hinder the Commissioner’s
ability to review filings promptly and
may delay final disposition, such as in
this instance.
Based on the data submitted, the
Commission finds that revenue from
DEP 1 should cover its attributable costs
(39 U.S.C. 3633(a)(2)), should not lead
to the subsidization of competitive
products by market dominant products
(39 U.S.C. 3633(a)(1)), and should have
a positive effect on competitive
products’ contribution to institutional
costs (39 U.S.C. 3633(a)(3)). Thus, an
initial review of the instant DEP
contract indicates that it comports with
the provisions applicable to rates for
competitive products.
Pricing provisions. The instant
contract includes provisions that would
permit price changes during the 1-year
term of the contract. The Public
Representative notes that these
provisions may affect results under the
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contract. Public Representative
Comments at 2.
Article 9.2 provides that the prices
under the DEP contract are based on
prices established by Canada Post
Corporation for Xpresspost, and that if
the latter change, the Postal Service
reserves the right to adjust prices
accordingly. The second provision,
Article 9.1, is somewhat more
problematic as it is not based on the
destination country’s post, but rather on
cost increases incurred by the Postal
Service over a specified threshold.
The provisions, agreed to by the
parties, mitigate risks associated with
the contract. Should either of these
provisions be invoked during the
contract year, the Postal Service shall
file a notice of the price changes with
the Commission. The notice, in lieu of
a filing under 39 CFR 3015, shall
include the new prices as well prior to
their effective date.
Scope of the Governors’ Decision. The
Public Representative states that the
instant DEP contract is authorized by
Governors’ Decision No. 09–7, but that
any future DEP contracts must be based
on a separate Governors’ Decision.
Otherwise, 39 U.S.C. 402 would be
violated. Public Representative
Comments at 1.
The Public Representative apparently
views Governors’ Decision No. 09–7 as
having ‘‘effectively delegated’’ the
Governors’ authority to Postal Service
management. He argues that the PAEA
does not provide for delegation by the
Governors, as distinct from the Board of
Governors. The Public Representative
concludes that the instant contract has
been explicitly authorized by the
Governors, but that Governors’ Decision
No. 09–7 could not be used to support
any further DEP contracts. The
Commission does not read the
Governors’ Decision so narrowly. That
Governors’ Decision authorizes
contracts that fall within the terms of
the MCS language and price formulas
attached to the Governors’ Decision. The
Public Representative does not explain
and it is not clear to the Commission
why the Governors’ Decision should be
read to authorize only the instant
contract, but no other. While his
conclusion may be predicated on his
theory of delegation, the Commission
finds that it is unnecessary to address
those claims for purposes of this
proceeding.
Other considerations. The Postal
Service shall promptly notify the
Commission of the effective date and
termination date of the contract. If the
contract terminates earlier than
anticipated, the Postal Service shall
inform the Commission prior to the new
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termination date. The Commission will
then remove the product from the MCS
at the earliest possible opportunity.
In conclusion, the Commission
approves Direct Entry Parcels 1 as a new
product, and International Return
Service and Harmonization Service as
competitive special services. The
revision to the Competitive Product List
is shown below the signature of this
Order and is effective upon issuance of
this order.
V. Ordering Paragraphs
It is ordered:
1. Direct Entry Parcels 1 (MC2009–26
and CP2009–36) is added to the
Competitive Product List as a new
product.
2. International Return Service and
Harmonization Service are added as
components of the International
Ancillary Services product.
3. The Postal Service shall notify the
Commission of the scheduled effective
date and termination date and update
the Commission if the contract
terminates at an earlier date, as
discussed in this order.
4. As discussed in this order, price
changes pursuant to Direct Entry Parcels
1 shall be filed with the Commission.
5. The Secretary shall arrange for the
publication of this Order in the Federal
Register.
List of Subjects in 39 CFR Part 3020
Admininistrative practice and
procedure, Postal Service.
Issued: July 31, 2009.
By the Commission.
Judith M. Grady,
Acting Secretary.
For the reasons stated in the preamble,
under the authority at 39 U.S.C. 503, the
Postal Regulatory Commission amends
39 CFR part 3020 as follows:
■
PART 3020—PRODUCT LISTS
1. The authority citation for part 3020
continues to read as follows:
■
Authority: 39 U.S.C. 503; 3622; 3631; 3642;
3682.
2. Revise Appendix A to Subpart A of
Part 3020—Mail Classification Schedule
to read as follows:
■
Appendix A to Subpart A of Part
3020—Mail Classification Schedule
Part A—Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
Flats
Parcels
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Outbound Single-Piece First-Class Mail
International
Inbound Single-Piece First-Class Mail
International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card
Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc.
Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated
Service Agreement
The Bradford Group Negotiated Service
Agreement
Inbound International
Canada Post—United States Postal Service
Contractual Bilateral
Agreement for Inbound Market Dominant
Services
Market Dominant Product Descriptions
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail
International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail
International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
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Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forwarding
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
VerDate Nov<24>2008
16:09 Aug 13, 2009
Jkt 217001
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card
Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc.
Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated
Service Agreement
The Bradford Group Negotiated Service
Agreement
Part B—Competitive Products
2000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1
(CP2008–7)
Inbound International Expedited Services 2
(MC2009–10 and CP2009–12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post
Royal Mail Group Inbound Air Parcel Post
Agreement
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks—M–Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU
rates)
Canada Post—United States Postal service
Contractual Bilateral Agreement for
Inbound Competitive Services (MC2009–
8 and CP2009–9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008–5)
Express Mail Contract 2 (MC2009–3 and
CP2009–4)
Express Mail Contract 3 (MC2009–15 and
CP2009–21)
Express Mail Contract 4 (MC2009–34 and
CP2009–45)
Express Mail & Priority Mail Contract 1
(MC2009–6 and CP2009–7)
Express Mail & Priority Mail Contract 2
(MC2009–12 and CP2009–14)
Express Mail & Priority Mail Contract 3
(MC2009–13 and CP2009–17)
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
41055
Express Mail & Priority Mail Contract 4
(MC2009–17 and CP2009–24)
Express Mail & Priority Mail Contract 5
(MC2009–18 and CP2009–25)
Express Mail & Priority Mail Contract 6
(MC2009–31 and CP2009–42)
Express Mail & Priority Mail Contract 7
(MC2009–32 and CP2009–43)
Express Mail & Priority Mail Contract 8
(MC2009–33 and CP2009–44)
Parcel Return Service Contract 1 (MC2009–
1 and CP2009–2)
Priority Mail Contract 1 (MC2008–8 and
CP2008–26)
Priority Mail Contract 2 (MC2009–2 and
CP2009–3)
Priority Mail Contract 3 (MC2009–4 and
CP2009–5)
Priority Mail Contract 4 (MC2009–5 and
CP2009–6)
Priority Mail Contract 5 (MC2009–21 and
CP2009–26)
Priority Mail Contract 6 (MC2009–25 and
CP2009–30)
Priority Mail Contract 7 (MC2009–25 and
CP2009–31)
Priority Mail Contract 8 (MC2009–25 and
CP2009–32)
Priority Mail Contract 9 (MC2009–25 and
CP2009–33)
Priority Mail Contract 10 (MC2009–25 and
CP2009–34)
Priority Mail Contract 11 (MC2009–27 and
CP2009–37)
Priority Mail Contract 12 (MC2009–28 and
CP2009–38)
Priority Mail Contract 13 (MC2009–29 and
CP2009–39)
Priority Mail Contract 14 (MC2009–30 and
CP2009–40)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009–26 and
CP2009–36)
Global Direct Contracts (MC2009–9,
CP2009–10, and CP2009–11)
Global Expedited Package Services (GEPS)
Contracts
GEPS 1 (CP2008–5, CP2008–11, CP2008–
12, and CP2008–13, CP2008–18,
CP2008–19, CP2008–20, CP2008–21,
CP2008–22, CP2008–23, and CP2008–24)
Global Plus Contracts
Global Plus 1 (CP2008–9 and CP2008–10)
Global Plus 2 (MC2008–7, CP2008–16 and
CP2008–17)
Inbound International
Inbound Direct Entry Contracts with
Foreign Postal Administrations
(MC2008–6, CP2008–14 and CP2008–15)
International Business Reply Service
Competitive Contract 1 (MC2009–14 and
CP2009–20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
E:\FR\FM\14AUR1.SGM
14AUR1
41056
Federal Register / Vol. 74, No. 156 / Friday, August 14, 2009 / Rules and Regulations
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Product Description]
International Direct Sacks—M–Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU
rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C—Glossary of Terms and Conditions
[Reserved]
Part D—Country Price Lists for International
Mail [Reserved]
[FR Doc. E9–19366 Filed 8–13–09; 8:45 am]
BILLING CODE 7710–FW–P
DEPARTMENT OF HOMELAND
SECURITY
Federal Emergency Management
Agency
44 CFR Part 64
[Docket ID FEMA–2008–0020; Internal
Agency Docket No. FEMA–8087]
Suspension of Community Eligibility
mstockstill on DSKH9S0YB1PROD with RULES
AGENCY: Federal Emergency
Management Agency, DHS.
ACTION: Final rule.
SUMMARY: This rule identifies
communities, where the sale of flood
insurance has been authorized under
the National Flood Insurance Program
(NFIP), that are scheduled for
suspension on the effective dates listed
within this rule because of
VerDate Nov<24>2008
16:09 Aug 13, 2009
Jkt 217001
noncompliance with the floodplain
management requirements of the
program. If the Federal Emergency
Management Agency (FEMA) receives
documentation that the community has
adopted the required floodplain
management measures prior to the
effective suspension date given in this
rule, the suspension will not occur and
a notice of this will be provided by
publication in the Federal Register on a
subsequent date.
DATES: Effective Dates: The effective
date of each community’s scheduled
suspension is the third date (‘‘Susp.’’)
listed in the third column of the
following tables.
FOR FURTHER INFORMATION CONTACT: If
you want to determine whether a
particular community was suspended
on the suspension date or for further
information, contact David Stearrett,
Mitigation Directorate, Federal
Emergency Management Agency, 500 C
Street, SW., Washington, DC 20472,
(202) 646–2953.
SUPPLEMENTARY INFORMATION: The NFIP
enables property owners to purchase
flood insurance which is generally not
otherwise available. In return,
communities agree to adopt and
administer local floodplain management
aimed at protecting lives and new
construction from future flooding.
Section 1315 of the National Flood
Insurance Act of 1968, as amended, 42
U.S.C. 4022, prohibits flood insurance
coverage as authorized under the NFIP,
42 U.S.C. 4001 et seq.; unless an
appropriate public body adopts
adequate floodplain management
measures with effective enforcement
measures. The communities listed in
this document no longer meet that
statutory requirement for compliance
with program regulations, 44 CFR part
59. Accordingly, the communities will
be suspended on the effective date in
the third column. As of that date, flood
insurance will no longer be available in
the community. However, some of these
communities may adopt and submit the
required documentation of legally
enforceable floodplain management
measures after this rule is published but
prior to the actual suspension date.
These communities will not be
suspended and will continue their
eligibility for the sale of insurance. A
notice withdrawing the suspension of
the communities will be published in
the Federal Register.
In addition, FEMA has identified the
Special Flood Hazard Areas (SFHAs) in
these communities by publishing a
Flood Insurance Rate Map (FIRM). The
date of the FIRM, if one has been
published, is indicated in the fourth
PO 00000
Frm 00024
Fmt 4700
Sfmt 4700
column of the table. No direct Federal
financial assistance (except assistance
pursuant to the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act not in connection with a
flood) may legally be provided for
construction or acquisition of buildings
in identified SFHAs for communities
not participating in the NFIP and
identified for more than a year, on
FEMA’s initial flood insurance map of
the community as having flood-prone
areas (section 202(a) of the Flood
Disaster Protection Act of 1973, 42
U.S.C. 4106(a), as amended). This
prohibition against certain types of
Federal assistance becomes effective for
the communities listed on the date
shown in the last column. The
Administrator finds that notice and
public comment under 5 U.S.C. 553(b)
are impracticable and unnecessary
because communities listed in this final
rule have been adequately notified.
Each community receives 6-month,
90-day, and 30-day notification letters
addressed to the Chief Executive Officer
stating that the community will be
suspended unless the required
floodplain management measures are
met prior to the effective suspension
date. Since these notifications were
made, this final rule may take effect
within less than 30 days.
National Environmental Policy Act.
This rule is categorically excluded from
the requirements of 44 CFR part 10,
Environmental Considerations. No
environmental impact assessment has
been prepared.
Regulatory Flexibility Act. The
Administrator has determined that this
rule is exempt from the requirements of
the Regulatory Flexibility Act because
the National Flood Insurance Act of
1968, as amended, 42 U.S.C. 4022,
prohibits flood insurance coverage
unless an appropriate public body
adopts adequate floodplain management
measures with effective enforcement
measures. The communities listed no
longer comply with the statutory
requirements, and after the effective
date, flood insurance will no longer be
available in the communities unless
remedial action takes place.
Regulatory Classification. This final
rule is not a significant regulatory action
under the criteria of section 3(f) of
Executive Order 12866 of September 30,
1993, Regulatory Planning and Review,
58 FR 51735.
Executive Order 13132, Federalism.
This rule involves no policies that have
federalism implications under Executive
Order 13132.
Executive Order 12988, Civil Justice
Reform. This rule meets the applicable
standards of Executive Order 12988.
E:\FR\FM\14AUR1.SGM
14AUR1
Agencies
[Federal Register Volume 74, Number 156 (Friday, August 14, 2009)]
[Rules and Regulations]
[Pages 41051-41056]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-19366]
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
39 CFR Part 3020
[Docket Nos. MC2009-26 and CP2009-36; Order No. 264]
International Mail Products and Special Services
AGENCY: Postal Regulatory Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is adding Direct Entry Parcels Contracts and
two related special services to the Competitive Product List. The two
special services are categorized within International Ancillary
Services. This action is consistent with changes in a recent law
governing postal operations.
Republication of the lists of market dominant and competitive
products is also consistent with requirements in the new law.
DATES: Effective August 14, 2009 and is applicable beginning July 31,
2009.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman at 202-789-6820 or
stephen.sharfman@prc.gov.
SUPPLEMENTARY INFORMATION: Regulatory History, 74 FR 30646 (June 29,
2009).
I. Introduction
II. Background
III. Comments
IV. Commission Analysis
V. Ordering Paragraphs
I. Introduction
The Postal Service seeks to add Direct Entry Parcels (DEP)
Contracts, International Return Service, and Harmonization Service to
the Competitive Product List. For the reasons discussed below, the
Commission approves adding the specific DEP contract (DEP 1) as a new
product, along with International Return Service and Harmonization
Service as ancillary (or special) services.
II. Background
On June 11, 2009, the Postal Service filed a formal request
pursuant to 39 U.S.C. 3642 and 39 CFR 3020.30 et seq. to add Direct
Entry Parcels Contracts, International Return Service, and
Harmonization Service to the Competitive Products List.\1\ The Postal
Service indicates that Governors' Decision No. 09-7, dated June 10,
2009, establishes prices and classifications not of general
applicability for DEP contracts and the ancillary services of
International Return Service and Harmonization Service.\2\ The Request
has been assigned Docket No. MC2009-26.
---------------------------------------------------------------------------
\1\ Request of the United States Postal Service to Add Direct
Entry Parcels Contracts, International Return Service, and
Harmonization Service to the Competitive Products List, and Notice
of Filing (Under Seal) of Contract and Enabling Governors' Decision,
June 11, 2009 (Request).
\2\ Governors' Decision No. 09-7, filed June 11, 2009,
establishes prices and classifications not of general applicability
for Direct Entry Parcels Contracts, International Return Service,
and Harmonization Service Offered with Customized Agreements. Id. at
1.
---------------------------------------------------------------------------
The Postal Service contemporane ously filed a DEP contract pursuant
to 39 U.S.C. 3632(b)(3) and 39 CFR 3015.5. Request at 1. The contract
has been assigned Docket No. CP2009-36.
The Request incorporates (1) A Statement of Supporting
Justification as required by 39 CFR 3020.32; \3\ (2) Governors'
Decision No. 09-7 authorizing the new product and services; \4\ (3)
proposed changes to the Mail Classification Schedule (MCS); \5\ (4) the
pricing formulas applicable to DEP contracts, International Return
Service and Harmonization Service; \6\ (5) an analysis of those pricing
formulas; \7\ (6) certification of
[[Page 41052]]
compliance with 39 U.S.C. 3633(a); \8\ (7) a redacted version of the
contract; \9\ and (8) certification that the instant contract (DEP 1)
complies with 39 U.S.C. 3633(a).\10\ Substantively, the Request seeks
to add the DEP contract, and the ancillary services of International
Return Service, and Harmonization Service to the Competitive Products
List. Request at 1-2.
---------------------------------------------------------------------------
\3\ Attachment 1 to the Request.
\4\ Attachment 2 to the Request.
\5\ Attachment 2, Attachments A-1, A-2, and A-3 to the Request.
\6\ Attachment 2, Attachments B-1, B-2, and B-3 to the Request.
\7\ Attachment 2, Attachments C-1, C-2, and C-3 to the Request.
\8\ Attachment 2, Attachment D to the Request.
\9\ Attachment 3 to the Request.
\10\ Attachment 4 to the Request.
---------------------------------------------------------------------------
In the Statement of Supporting Justification, Frank Cebello,
Executive Director, Global Business Management, asserts that the
service to be provided under the contract will cover its attributable
costs, make a positive contribution to institutional costs, and
increase contribution toward the requisite 5.5 percent of the Postal
Service's total institutional costs. Id., Attachment 1. Thus, Mr.
Cebello contends there will be no issue of subsidization of competitive
products by market dominant products as a result of this contract. Id.
The Postal Service represents that the instant contract is
consistent with 39 U.S.C. 3633(a), 39 CFR 3015.5 and 39 CFR 3015.7. See
id., Attachment 2. DEP contracts include International Return Service
and Harmonization Service as optional features which reflect the
proposed MCS language in Attachments A-2 and A-3 of the Governors'
Decision, respectively. DEP contracts provide for mail acceptance
within the United States, transportation to a receiving country of
parcels bearing the appropriate foreign indicia, transportation to
customs within the receiving country, and customs clearance and
prepayment of customs duties and taxes to the receiving country. The
Postal Service states that International Return Service provides for
the return of refused or undeliverable items. It states that
Harmonization Service offers review of outbound items by a licensed
customs broker and the broker's assignment of Harmonized Tariff
Schedule codes to facilitate assessment of customs duties. Id. at 2-3.
The Postal Service notes that the latter two services will only be
available through customized agreements, in particular through DEP
contracts similar to the instant contract.
The contract becomes effective within 30 days after the Postal
Service notifies the customer that it has received all required reviews
and the Commission has provided all necessary regulatory approvals. The
term of the contract is one year from the effective date.
The Postal Service filed much of the supporting materials,
including Governors' Decision 09-7, and related financial information,
including analysis of the instant contract in redacted versions and
under seal. In its Request, the Postal Service maintains that the
contract and related financial information, including the customer's
name and the accompanying analyses that provide prices, terms,
conditions, and financial projections, should remain under seal. Id. at
3-4.
The Postal Service requests that the Commission list the instant
DEP contract, as well as any subsequent functionally equivalent DEP
contracts, as one product on the Competitive Product List. Id. at 1-2.
The Request advances reasons why DEP contracts as described in the
proposed MCS language are in conformity with the requirements of 39
U.S.C. 3642 as competitive products. Among other things, the Postal
Service asserts that DEP contracts are intended for merchandise exempt
from the Private Express Statutes; that the Postal Accountability and
Enhancement Act (PAEA) classifies bulk international mail as
competitive; and that classifying DEP contracts as competitive is
consistent with Commission precedent. It contends that even though the
senders of DEP items may mail individual pieces, the contract customer
has committed to compensate the Postal Service for a bulk volume of DEP
items. The Postal Service also notes that Direct Entry Parcels,
Harmonization Service, and International Return Service are contractual
services not available to individual retail customers. Id. at 4-5.
In Order No. 228, the Commission gave notice of the two dockets,
appointed a public representative, and provided the public with an
opportunity to comment.\11\ On June 26, 2009, Chairman's Information
Request No. 1 (CHIR No. 1) was issued. The Postal Service filed its
response to CHIR No. 1 on July 2, 2009.\12\ The Postal Service
responses provided some of the information requested in CHIR No. 1 and
indicated that revised financial information in response to questions
2, 5, 8 and 9 would be filed as soon as it could be completed. On July
15, 2009, the Postal Service filed the revised financial information as
referenced in its July 2, 2009 response.\13\
---------------------------------------------------------------------------
\11\ PRC Order No. 228, Notice and Order Concerning Direct Entry
Parcels Contract, International Return Service and Harmonization
Service Negotiated Service Agreements, June 22, 2009 (Order No.
228).
\12\ Response of the United States Postal Service to Chairman's
Information Request No. 1, July 2, 2009.
\13\ Notice of the United States Postal Service Regarding the
Filing of Library Reference USPS-CP2009-36NP3, July 15, 2009 and
Notice of the United States Postal Service Regarding the Filing of
Library Reference USPS-CP2009-36NP4.
---------------------------------------------------------------------------
III. Comments
Comments were filed by the Public Representative on June 29, 2009
(Public Representative Comments). No filings were submitted by any
other interested parties.
The Public Representative states that the Governors' Decision
authorizes DEP contracts subject to price floor and price ceiling
formulas. Public Representative Comments at 1. He contends the instant
contract is specifically authorized by the Governors, but any
additional DEP contracts would require a separate Governors' Decision
in order to comply with the law. Id. The Public Representative contends
that the price formulas in Governors' Decision No. 09-7 use ex ante
values which will change over the life of the contract. He notes that
the contract permits (but does not require) changing prices if some of
the variables in the formula change. Therefore, he concludes there is
some risk that a change in the variables under the contract could
eliminate the contract's profit. Id. at 2. The Public Representative
also states it appears the volume under the instant contract is new to
the Postal Service. Id.
IV. Commission Analysis
The Commission has reviewed the Request, the Agreement, the
financial analysis filed under seal, supplemental information filed in
response to CHIR No. 1, and the comments filed by the Public
Representative.
As a preliminary matter, it may be useful to outline the Request
before the Commission. The Postal Service seeks to add DEP Contracts,
International Return Service, and Harmonization Service to the
Competitive Product List within the Mail Classification Schedule.
Request at 1. While the Request characterizes these as three products
(id.), it appears that International Return Service and Harmonization
Service are ancillary (or special) services available only in
conjunction with DEP contracts or other customized agreements. Id. at
1, n.1 and 3. More specifically, the Postal Service requests that the
instant DEP contract, together with any subsequent functionally
equivalent DEP contracts, be listed as one product on the Competitive
Product List.\14\
---------------------------------------------------------------------------
\14\ Id. at 1-2. See also id. at 5 (urging the Commission to add
``this product [DEP Contracts] to the competitive products list * *
*.''); and at 6 (``the Postal Service believes that this DEP
Contract should be added to the competitive products list.'')
---------------------------------------------------------------------------
[[Page 41053]]
The Governors' Decision establishes classifications and prices for
DEP Contracts, a new product, and International Return Service and
Harmonization Service, two special services. The proposed draft MCS
language describes these classifications. The instant contract is the
first DEP contract executed pursuant to the Governors' Decision. The
Commission's consideration of the Request will thus focus on that
contract and the ancillary (or special) services offered with it. As
discussed below, DEP 1, International Return Service and Harmonization
Service will be added to the Competitive Product List and the proposed
classification language will be added to the MCS. It is premature,
however, to consider the treatment of any future DEP contracts in this
proceeding. Whether subsequent DEP contracts, if any, are functionally
equivalent with DEP 1 can be addressed in the relevant subsequent
proceeding(s).
Statutory requirements. The Commission's statutory responsibilities
in this instance entail assigning DEP 1 to either the Market Dominant
Product List or to the Competitive Product List. 39 U.S.C. 3642. As
part of this responsibility, the Commission also reviews the proposal
for compliance with PAEA requirements. This includes, for proposed
competitive products, a review of the provisions applicable to rates
for competitive products. 39 U.S.C. 3633.
Product list assignment. In determining whether to assign DEP 1 as
a product to the Market Dominant Product List or the Competitive
Product List, the Commission must consider whether ``the Postal Service
exercises sufficient market power that it can effectively set the price
of such product substantially above costs, raise prices significantly,
decrease quality, or decrease output, without risk of losing a
significant level of business to other firms offering similar
products.'' 39 U.S.C. 3642(b)(1). If so, the product will be
categorized as market dominant. The competitive category of products
shall consist of all other products.
The Commission is further required to consider the availability and
nature of enterprises in the private sector engaged in the delivery of
the product, the views of those who use the product, and the likely
impact on small business concerns. 39 U.S.C. 3642(b)(3).
The Postal Service states that DEP contracts are for U.S. based
entities that seek a channel to send merchandise or other articles to
their overseas customers in packaging that has the ```look and feel'''
of domestic items in the destination country. Request, Attachment 1, ]
(d). It states that, generally, DEP contracts will include the use of a
licensed customs broker to review items for proper Harmonized Tariff
Schedule classification (Harmonization Service), and the Postal Service
may arrange the return of undeliverable or refused items (International
Return Service). The Postal Service indicates that because of the
competitive nature of international shipping services, the market does
not permit it to raise prices substantially above costs and the
contract is premised on prices that provide sufficient incentive for
customers to ship with the Postal Service rather than a competitor. Id.
The Postal Service asserts that its bargaining position is
constrained by the existence of other shippers who can provide similar
services, thus precluding it from taking unilateral action to increase
prices or decrease service without the risk of losing volume to private
companies in the international shipping industry. The Postal Service
also contends that it may not decrease quality or output without
risking the loss of business to competitors that offer similar
international parcel delivery services. Id. It further states that in
the proposed MCS language established by the Governors, DEP contract
items consist of Parcel Post items that are not subject to the Private
Express Statutes and that any letters inserted in Direct Entry Parcels
would also likely be within the letter monopoly exclusion of letters
under the Private Express Statutes. Id., ] (e).
The Postal Service states that the market for international
delivery services is highly competitive and the addition of DEP
contracts should have minimal, if any, impact on small business
concerns. It contends that large shipping companies, consolidators, and
freight forwarders comprise the market represented by the customers for
the instant contracts, and it is unaware of any small business that can
offer comparable service for the customer's volume. It notes that small
businesses are gaining an additional option for shipping articles
internationally, beyond the service offered by its competitors,
resulting in a positive impact on small businesses. Therefore, the
Postal Service concludes the net impact on small business should be
positive. Id., ] (h).
The Public Representative does not oppose the proposed
classification of DEP contracts as competitive.
Having considered the statutory requirements, the support offered
by the Postal Service, and all comments, the Commission finds that DEP
1 is appropriately classified as a competitive product and should be
added to the Competitive Product List.
Cost considerations. The initial supporting documentation filed by
the Postal Service on June 11, 2009 did not include source contracts
with third-party providers to substantiate certain cost factors. In
addition, the rates in the supporting documentation did not match the
rates in the instant contract. The Commission had to request the source
contracts and additional supporting documentation and seek
clarification of discrepancies between rates in the instant contract
and supporting documentation in order to complete its analysis.
In its response to CHIR No. 1 on July 15, 2009, the Postal Service
filed supporting documentation which included two sets of rates.
However, only one set of rates was included in the instant DEP
contract. The Commission understands that the second set of rates is
only based on projected cost increases as allowed for in the instant
contract and explained below under ``Pricing provisions.''
In future filings, the Postal Service should provide all supporting
source documentation, including relevant contracts with third-party
providers, and ensure consistency between rates in filed contracts and
supporting documentation. Postal Service requests that contain
inconsistent or missing information hinder the Commissioner's ability
to review filings promptly and may delay final disposition, such as in
this instance.
Based on the data submitted, the Commission finds that revenue from
DEP 1 should cover its attributable costs (39 U.S.C. 3633(a)(2)),
should not lead to the subsidization of competitive products by market
dominant products (39 U.S.C. 3633(a)(1)), and should have a positive
effect on competitive products' contribution to institutional costs (39
U.S.C. 3633(a)(3)). Thus, an initial review of the instant DEP contract
indicates that it comports with the provisions applicable to rates for
competitive products.
Pricing provisions. The instant contract includes provisions that
would permit price changes during the 1-year term of the contract. The
Public Representative notes that these provisions may affect results
under the
[[Page 41054]]
contract. Public Representative Comments at 2.
Article 9.2 provides that the prices under the DEP contract are
based on prices established by Canada Post Corporation for Xpresspost,
and that if the latter change, the Postal Service reserves the right to
adjust prices accordingly. The second provision, Article 9.1, is
somewhat more problematic as it is not based on the destination
country's post, but rather on cost increases incurred by the Postal
Service over a specified threshold.
The provisions, agreed to by the parties, mitigate risks associated
with the contract. Should either of these provisions be invoked during
the contract year, the Postal Service shall file a notice of the price
changes with the Commission. The notice, in lieu of a filing under 39
CFR 3015, shall include the new prices as well prior to their effective
date.
Scope of the Governors' Decision. The Public Representative states
that the instant DEP contract is authorized by Governors' Decision No.
09-7, but that any future DEP contracts must be based on a separate
Governors' Decision. Otherwise, 39 U.S.C. 402 would be violated. Public
Representative Comments at 1.
The Public Representative apparently views Governors' Decision No.
09-7 as having ``effectively delegated'' the Governors' authority to
Postal Service management. He argues that the PAEA does not provide for
delegation by the Governors, as distinct from the Board of Governors.
The Public Representative concludes that the instant contract has been
explicitly authorized by the Governors, but that Governors' Decision
No. 09-7 could not be used to support any further DEP contracts. The
Commission does not read the Governors' Decision so narrowly. That
Governors' Decision authorizes contracts that fall within the terms of
the MCS language and price formulas attached to the Governors'
Decision. The Public Representative does not explain and it is not
clear to the Commission why the Governors' Decision should be read to
authorize only the instant contract, but no other. While his conclusion
may be predicated on his theory of delegation, the Commission finds
that it is unnecessary to address those claims for purposes of this
proceeding.
Other considerations. The Postal Service shall promptly notify the
Commission of the effective date and termination date of the contract.
If the contract terminates earlier than anticipated, the Postal Service
shall inform the Commission prior to the new termination date. The
Commission will then remove the product from the MCS at the earliest
possible opportunity.
In conclusion, the Commission approves Direct Entry Parcels 1 as a
new product, and International Return Service and Harmonization Service
as competitive special services. The revision to the Competitive
Product List is shown below the signature of this Order and is
effective upon issuance of this order.
V. Ordering Paragraphs
It is ordered:
1. Direct Entry Parcels 1 (MC2009-26 and CP2009-36) is added to the
Competitive Product List as a new product.
2. International Return Service and Harmonization Service are added
as components of the International Ancillary Services product.
3. The Postal Service shall notify the Commission of the scheduled
effective date and termination date and update the Commission if the
contract terminates at an earlier date, as discussed in this order.
4. As discussed in this order, price changes pursuant to Direct
Entry Parcels 1 shall be filed with the Commission.
5. The Secretary shall arrange for the publication of this Order in
the Federal Register.
List of Subjects in 39 CFR Part 3020
Admininistrative practice and procedure, Postal Service.
Issued: July 31, 2009.
By the Commission.
Judith M. Grady,
Acting Secretary.
0
For the reasons stated in the preamble, under the authority at 39
U.S.C. 503, the Postal Regulatory Commission amends 39 CFR part 3020 as
follows:
PART 3020--PRODUCT LISTS
0
1. The authority citation for part 3020 continues to read as follows:
Authority: 39 U.S.C. 503; 3622; 3631; 3642; 3682.
0
2. Revise Appendix A to Subpart A of Part 3020--Mail Classification
Schedule to read as follows:
Appendix A to Subpart A of Part 3020--Mail Classification Schedule
Part A--Market Dominant Products
1000 Market Dominant Product List
First-Class Mail
Single-Piece Letters/Postcards
Bulk Letters/Postcards
Flats
Parcels
Outbound Single-Piece First-Class Mail International
Inbound Single-Piece First-Class Mail International
Standard Mail (Regular and Nonprofit)
High Density and Saturation Letters
High Density and Saturation Flats/Parcels
Carrier Route
Letters
Flats
Not Flat-Machinables (NFMs)/Parcels
Periodicals
Within County Periodicals
Outside County Periodicals
Package Services
Single-Piece Parcel Post
Inbound Surface Parcel Post (at UPU rates)
Bound Printed Matter Flats
Bound Printed Matter Parcels
Media Mail/Library Mail
Special Services
Ancillary Services
International Ancillary Services
Address List Services
Caller Service
Change-of-Address Credit Card Authentication
Confirm
International Reply Coupon Service
International Business Reply Mail Service
Money Orders
Post Office Box Service
Negotiated Service Agreements
HSBC North America Holdings Inc. Negotiated Service Agreement
Bookspan Negotiated Service Agreement
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Inbound International
Canada Post--United States Postal Service Contractual Bilateral
Agreement for Inbound Market Dominant Services
Market Dominant Product Descriptions
First-Class Mail
[Reserved for Class Description]
Single-Piece Letters/Postcards
[Reserved for Product Description]
Bulk Letters/Postcards
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Parcels
[Reserved for Product Description]
Outbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Inbound Single-Piece First-Class Mail International
[Reserved for Product Description]
Standard Mail (Regular and Nonprofit)
[Reserved for Class Description]
High Density and Saturation Letters
[Reserved for Product Description]
High Density and Saturation Flats/Parcels
[Reserved for Product Description]
Carrier Route
[Reserved for Product Description]
Letters
[Reserved for Product Description]
Flats
[Reserved for Product Description]
Not Flat-Machinables (NFMs)/Parcels
[Reserved for Product Description]
[[Page 41055]]
Periodicals
[Reserved for Class Description]
Within County Periodicals
[Reserved for Product Description]
Outside County Periodicals
[Reserved for Product Description]
Package Services
[Reserved for Class Description]
Single-Piece Parcel Post
[Reserved for Product Description]
Inbound Surface Parcel Post (at UPU rates)
[Reserved for Product Description]
Bound Printed Matter Flats
[Reserved for Product Description]
Bound Printed Matter Parcels
[Reserved for Product Description]
Media Mail/Library Mail
[Reserved for Product Description]
Special Services
[Reserved for Class Description]
Ancillary Services
[Reserved for Product Description]
Address Correction Service
[Reserved for Product Description]
Applications and Mailing Permits
[Reserved for Product Description]
Business Reply Mail
[Reserved for Product Description]
Bulk Parcel Return Service
[Reserved for Product Description]
Certified Mail
[Reserved for Product Description]
Certificate of Mailing
[Reserved for Product Description]
Collect on Delivery
[Reserved for Product Description]
Delivery Confirmation
[Reserved for Product Description]
Insurance
[Reserved for Product Description]
Merchandise Return Service
[Reserved for Product Description]
Parcel Airlift (PAL)
[Reserved for Product Description]
Registered Mail
[Reserved for Product Description]
Return Receipt
[Reserved for Product Description]
Return Receipt for Merchandise
[Reserved for Product Description]
Restricted Delivery
[Reserved for Product Description]
Shipper-Paid Forwarding
[Reserved for Product Description]
Signature Confirmation
[Reserved for Product Description]
Special Handling
[Reserved for Product Description]
Stamped Envelopes
[Reserved for Product Description]
Stamped Cards
[Reserved for Product Description]
Premium Stamped Stationery
[Reserved for Product Description]
Premium Stamped Cards
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
Address List Services
[Reserved for Product Description]
Caller Service
[Reserved for Product Description]
Change-of-Address Credit Card Authentication
[Reserved for Product Description]
Confirm
[Reserved for Product Description]
International Reply Coupon Service
[Reserved for Product Description]
International Business Reply Mail Service
[Reserved for Product Description]
Money Orders
[Reserved for Product Description]
Post Office Box Service
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Class Description]
HSBC North America Holdings Inc. Negotiated Service Agreement
[Reserved for Product Description]
Bookspan Negotiated Service Agreement
[Reserved for Product Description]
Bank of America Corporation Negotiated Service Agreement
The Bradford Group Negotiated Service Agreement
Part B--Competitive Products
2000 Competitive Product List
Express Mail
Express Mail
Outbound International Expedited Services
Inbound International Expedited Services
Inbound International Expedited Services 1 (CP2008-7)
Inbound International Expedited Services 2 (MC2009-10 and
CP2009-12)
Priority Mail
Priority Mail
Outbound Priority Mail International
Inbound Air Parcel Post
Royal Mail Group Inbound Air Parcel Post Agreement
Parcel Select
Parcel Return Service
International
International Priority Airlift (IPA)
International Surface Airlift (ISAL)
International Direct Sacks--M-Bags
Global Customized Shipping Services
Inbound Surface Parcel Post (at non-UPU rates)
Canada Post--United States Postal service Contractual Bilateral
Agreement for Inbound Competitive Services (MC2009-8 and CP2009-9)
International Money Transfer Service
International Ancillary Services
Special Services
Premium Forwarding Service
Negotiated Service Agreements
Domestic
Express Mail Contract 1 (MC2008-5)
Express Mail Contract 2 (MC2009-3 and CP2009-4)
Express Mail Contract 3 (MC2009-15 and CP2009-21)
Express Mail Contract 4 (MC2009-34 and CP2009-45)
Express Mail & Priority Mail Contract 1 (MC2009-6 and CP2009-7)
Express Mail & Priority Mail Contract 2 (MC2009-12 and CP2009-
14)
Express Mail & Priority Mail Contract 3 (MC2009-13 and CP2009-
17)
Express Mail & Priority Mail Contract 4 (MC2009-17 and CP2009-
24)
Express Mail & Priority Mail Contract 5 (MC2009-18 and CP2009-
25)
Express Mail & Priority Mail Contract 6 (MC2009-31 and CP2009-
42)
Express Mail & Priority Mail Contract 7 (MC2009-32 and CP2009-
43)
Express Mail & Priority Mail Contract 8 (MC2009-33 and CP2009-
44)
Parcel Return Service Contract 1 (MC2009-1 and CP2009-2)
Priority Mail Contract 1 (MC2008-8 and CP2008-26)
Priority Mail Contract 2 (MC2009-2 and CP2009-3)
Priority Mail Contract 3 (MC2009-4 and CP2009-5)
Priority Mail Contract 4 (MC2009-5 and CP2009-6)
Priority Mail Contract 5 (MC2009-21 and CP2009-26)
Priority Mail Contract 6 (MC2009-25 and CP2009-30)
Priority Mail Contract 7 (MC2009-25 and CP2009-31)
Priority Mail Contract 8 (MC2009-25 and CP2009-32)
Priority Mail Contract 9 (MC2009-25 and CP2009-33)
Priority Mail Contract 10 (MC2009-25 and CP2009-34)
Priority Mail Contract 11 (MC2009-27 and CP2009-37)
Priority Mail Contract 12 (MC2009-28 and CP2009-38)
Priority Mail Contract 13 (MC2009-29 and CP2009-39)
Priority Mail Contract 14 (MC2009-30 and CP2009-40)
Outbound International
Direct Entry Parcels Contracts
Direct Entry Parcels 1 (MC2009-26 and CP2009-36)
Global Direct Contracts (MC2009-9, CP2009-10, and CP2009-11)
Global Expedited Package Services (GEPS) Contracts
GEPS 1 (CP2008-5, CP2008-11, CP2008-12, and CP2008-13, CP2008-
18, CP2008-19, CP2008-20, CP2008-21, CP2008-22, CP2008-23, and
CP2008-24)
Global Plus Contracts
Global Plus 1 (CP2008-9 and CP2008-10)
Global Plus 2 (MC2008-7, CP2008-16 and CP2008-17)
Inbound International
Inbound Direct Entry Contracts with Foreign Postal
Administrations (MC2008-6, CP2008-14 and CP2008-15)
International Business Reply Service Competitive Contract 1
(MC2009-14 and CP2009-20)
Competitive Product Descriptions
Express Mail
[Reserved for Group Description]
Express Mail
[Reserved for Product Description]
Outbound International Expedited Services
[Reserved for Product Description]
Inbound International Expedited Services
[Reserved for Product Description]
Priority
[Reserved for Product Description]
Priority Mail
[Reserved for Product Description]
[[Page 41056]]
Outbound Priority Mail International
[Reserved for Product Description]
Inbound Air Parcel Post
[Reserved for Product Description]
Parcel Select
[Reserved for Group Description]
Parcel Return Service
[Reserved for Group Description]
International
[Reserved for Group Description]
International Priority Airlift (IPA)
[Reserved for Product Description]
International Surface Airlift (ISAL)
[Reserved for Product Description]
International Direct Sacks--M-Bags
[Reserved for Product Description]
Global Customized Shipping Services
[Reserved for Product Description]
International Money Transfer Service
[Reserved for Product Description]
Inbound Surface Parcel Post (at non-UPU rates)
[Reserved for Product Description]
International Ancillary Services
[Reserved for Product Description]
International Certificate of Mailing
[Reserved for Product Description]
International Registered Mail
[Reserved for Product Description]
International Return Receipt
[Reserved for Product Description]
International Restricted Delivery
[Reserved for Product Description]
International Insurance
[Reserved for Product Description]
Negotiated Service Agreements
[Reserved for Group Description]
Domestic
[Reserved for Product Description]
Outbound International
[Reserved for Group Description]
Part C--Glossary of Terms and Conditions [Reserved]
Part D--Country Price Lists for International Mail [Reserved]
[FR Doc. E9-19366 Filed 8-13-09; 8:45 am]
BILLING CODE 7710-FW-P