Periodic Reporting, 12289-12291 [2024-03270]
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Federal Register / Vol. 89, No. 33 / Friday, February 16, 2024 / Proposed Rules
filing of a request for Panel
consideration. A clean copy may be
submitted for the original. Responses or
documents may be submitted
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certified mail, regular mail, or
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documents also may be accepted by the
Panel if transmitted to the facsimile
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which is (202) 482–6674. A party
submitting a response or document by
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the Panel’s records, but failure to do so
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In-person delivery is accepted with
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(d) The date of service or date served
shall be the day when the matter served,
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Approved: February 12, 2024.
Thomas Tso,
Solicitor and Federal Register Liaison, Federal
Labor Relations Authority.
[FR Doc. 2024–03210 Filed 2–15–24; 8:45 am]
BILLING CODE 7627–01–P
POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2024–3; Order No. 6965]
Periodic Reporting
Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
AGENCY:
The Commission is
acknowledging a recent filing requesting
the Commission initiate a rulemaking
proceeding to consider changes to
analytical principles relating to periodic
reports (Proposal One). This document
informs the public of the filing, invites
public comment, and takes other
administrative steps.
DATES: Comments are due: February 26,
2024.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
12289
II. Proposal One
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
On February 8, 2024, the Postal
Service filed a petition pursuant to 39
CFR 3050.11 requesting that the
Commission initiate a rulemaking
proceeding to consider changes to
analytical principles relating to periodic
reports.1 The Petition identifies the
proposed analytical changes filed in this
docket as Proposal One.
II. Proposal One
Background. The Postal Service has in
recent years made several proposals to
improve the methodology used to
calculate dropship workshare discounts
for various flat-shaped USPS Marketing
Mail mailpieces. Petition, Proposal One
at 1. For some flat-shaped USPS
Marketing Mail pieces, two rates are
available: (1) a per-piece rate for pieces
up to a 4-ounce breakpoint weight; (2)
and a combined rate, per piece and per
pound, for pieces heavier than the 4ounce breakpoint weight. Id. In 2017,
the Postal Service’s passthrough
calculation divided the discount for the
heavier pieces by the avoided cost per
pound for all pieces, both above and
below the 4-ounce breakpoint. Id. at 2.
The Postal Services states that this
method was ‘‘incomplete,’’ because ‘‘[i]t
did not include in its numerator pieces
below the pricing breakpoint, but it did
include the weight of those pieces in the
denominator.’’ Id. Therefore, the Postal
Service proposed, and the Commission
approved, the following methodology to
calculate dropship workshare discounts
for USPS Marketing Mail that included
the discount for pieces at or below the
breakpoint weight in the numerator:
((Pound discount * Pounds above breakpoint) + (Piece discount * Pieces below breakpoint))
lotter on DSK11XQN23PROD with PROPOSALS1
(Avoided cost per pound * Pounds above and below breakpoint) 2
The Postal Service states that the
usual approach of taking ‘‘the unit
discount from the published benchmark
price’’ divided by the avoided cost ‘‘did
not work because the benchmark price
varies with the different weights of the
pieces mailed.’’ Id. at 3. The Postal
Service states that it could only
calculate the workshare discounts for
these flat-shaped USPS Marketing Mail
mailpieces on a weighted basis after
mailing, ‘‘when the weights and
numbers of pieces sent were known.’’
Id. The Postal Service contends that, as
a practical matter, the passthrough
percentages for these mailpieces could
sometime vary widely with changes in
mail volumes and weights which, in
turn, made it more difficult for the
passthrough percentages to meet the
requirements of 39 CFR 3030.284 and
3030.284. Id.
The Postal Services states that it
identified the problem complying with
39 CFR 3030.284 and 3030.284 in
Docket No. R2021–2, ‘‘where it was
mathematically impossible for the
Postal Service to make all six
passthrough percentages for Basic
Carrier Route Flats (those on 5-Digit
pallets and those on all other pallets)’’
comply with the Commission’s
workshare discount regulations.3 The
Postal Service therefore filed a petition
to address the non-compliance by
modifying how it calculated and
1 Petition of the United States Postal Service for
the Initiation of a Proceeding to Consider Proposed
Changes in Analytical Principles (Proposal One),
February 8, 2024 (Petition).
2 Id. (citing Docket No. RM2017–11, Order on
Analytical Principles Used in Periodic Reporting
(Proposal Seven), November 20, 2017, at 4, 8 (Order
No. 4227)).
3 Id.; see Docket No. R2021–2, Order on Price
Adjustments for First-Class Mail, USPS Marketing
Mail, Periodicals, Package Services, and Special
Services Products and Related Mail Classification
Changes, July 19, 2021 (Order No. 5937).
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12290
Federal Register / Vol. 89, No. 33 / Friday, February 16, 2024 / Proposed Rules
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reported passthroughs for USPS
Marketing Mail flats.4 Specifically, the
Postal Service proposed to calculate and
report passthroughs for USPS Marketing
Mail Carrier Route Flats on 5-digit
pallets and passthroughs for all other
USPS Marketing Mail Carrier Route
Flats together rather than separately.
Petition, Proposal One at 4. The
Commission approved this proposal and
Postal Service notes that the
Commission observed that the prior
methodology ‘‘leads to anomalous
results and could precipitate inefficient
pricing.’’ 5
The Postal Service states that while
the adjustments in 2021 prevented the
compliance problem for USPS
Marketing Mail Carrier Route Flats on 5digit pallets from reoccurring, ‘‘the
adjustments did not otherwise change
the methodology for calculating
passthrough percentages for other flatshaped [USPS] Marketing Mail pieces
with piece and pound price
components.’’ Id. at 5. Instead, the
Postal Services states that changes in
volumes and weight cause compliance
issues with 39 CFR 3030.284 and
3030.284. Id. The Postal Service states
that it ‘‘found a great disparity in the
volumes and weights of [USPS]
Marketing Mail Carrier Route Flats
dropshipped at the [destination
sectional center facility] DSCF and
[destination delivery unit (DDU)].’’ Id. at
5. The Postal Service states that it
requested, and the Commission granted,
a waiver permitting the passthrough
percentage for USPS Marketing Mail
Carrier Route Flats dropshipped at the
DDU to be 105 percent.6 Thereafter, the
Postal Service again revised the way it
prices flat-shaped USPS Marketing Mail
pieces with piece and pound price
components and offering dropship
discounts on per-piece prices only,
which the Commission approved.7
4 Petition, Proposal One at 3; see Docket No.
RM2021–6, Petition of the United States Postal
Service for the Initiation of a Proceeding to
Consider Proposed Changes in Analytical Principles
(Proposal Three), April 8, 2021.
5 Petition, Proposal One at 4–5 (citing Docket No.
RM2021–6, Order on Analytical Principles Used in
Periodic Reporting (Proposal Three), November 4,
2021, at 11 (Order No. 6032)). Additionally, the
Postal Service states that, in approving the price
adjustments in Docket No. R2021–2, the
Commission also granted a one-time exemption
from 39 CFR part 3030, subpart J for Basic Carrier
Route Flats entered at the [Destination Delivery
Unit] DDU workshare discount that noted the
‘‘mathematical impossibility’’ of compliance.
Petition, Proposal One at 4.
6 Id. at 5–6 (citing Docket No. RM2022–12, Order
Approving Postal Service Application for Waiver
under 39 CFR 3030.286, August 30, 2022, at 9, 11
(Order No. 6261)).
7 Petition, Proposal One at 6, 7–8 (citing Docket
No. RM2023–4, Petition of the United States Postal
Service for the Initiation of a Proceeding to
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The Postal Service’s current
methodology for calculating workshare
discount passthrough percentages is
‘‘the same . . . as it uses for most other
products, dividing the per-piece
discount by the per-piece cost
avoidance.’’ Petition, Proposal One at 7.
The Postal Service states that the
passthrough percentages no longer vary
with the different weights of pieces
mailed because the passthroughs are
calculated independently of the
volumes and weights of pieces mailed.
Id.
The Postal Service states that its
current methodology for calculating
workshare discount passthrough
percentages ‘‘has some limitations.’’ Id.
The Postal Service argues that because
pound prices do not vary by dropship
entry point, it reduces incentives for
mailers to dropship flat-shaped pieces
weighing more than 4 ounces closer to
their delivery destinations. Id. at 8. The
Postal Service also states that its current
methodology does not ‘‘reflect the
avoided costs of delivering flat-shaped
[USPS] Marketing Mail pieces as closely
as they could.’’ Id. at 9. Instead, the
Postal Service states that workshare
discounts for pieces weighing more than
4 ounces are too small relative to their
avoided costs, while those for pieces
weighing 4 ounces or less are too large.
Id.
Proposal. The Postal Service proposes
to address the limitations in its current
methodology for calculating workshare
discount passthrough percentages by
separately deriving prices for flatshaped USPS Marketing Mail pieces at
or below the 4-ounce breakpoint from
those pieces above the 4-ounce
breakpoint. Id. For mailpieces at or
below the 4-ounce breakpoint, the
Postal Service states that:
• mailers would continue to pay only
a per-piece price;
• dropship discounts would be given
on these per-piece prices, so that perpiece prices would still vary based upon
entry (i.e., origin, (destination network
distribution center) DNDC, DSCF, or
DDU); and
• the methodology for calculating
passthroughs would remain
substantially unchanged from the
current formula.
Id. at 10. The Postal Service states that
the only difference in its proposed
methodology and the current
methodology is the per-piece cost
avoidance from Folder 13, as submitted
in its annual compliance filing. Id. The
Consider Proposed Changes in Analytical Principles
(Proposal One), February 10, 2023; Docket No.
RM2023–4, Order on Analytical Principles Used in
Periodic Reporting (Proposal One), April 6, 2023, at
14 (Order No. 6474).
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Postal Service’s proposed methodology
for calculating workshare discount
passthrough percentages for these pieces
is as follows:
Per-piece dropship discount/per-piece
dropship cost avoidance of
lightweight pieces (Folder 13)
Id. The Postal Service contends that
the change to the cost avoidance
component of the passthrough
calculation is much closer to actual
avoided costs than if the weights of
pieces over 4-ounces were included. Id.
For mailpieces weighting 4-ounces or
more, the Postal Services states:
• prices would continue to have perpiece and per-pound components;
• pound prices would, once again,
apply to the entire weight of a piece, not
just the pounds above the breakpoint as
they do in the current price structure;
and
• the Postal Service would
reintroduce per-pound dropship
discounts, and so the per-pound prices
would again vary by dropship entry
point, as they did prior to adopting the
current methodology.
Id. at 10–11. The Postal Service states
that, instead of basing dropship
discounts on the per-piece rates and
cost avoidances, it proposes to base
dropship workshare discounts for pieces
weighing 4 ounces or more on the perpound component of the rates. Id. at 12.
As such, the Postal Service’s proposed
methodology for calculating
passthroughs for pieces weighing 4
ounces or more is:
Per-pound dropship discount/Perpound dropship cost avoidance
(Folder 13)
Id.
The Postal Service contends that ‘‘the
virtue’’ of the proposed methodology is
that the discounts are tied directly to the
per-pound cost avoidance and are
‘‘better aligned with actual cost
avoidances’’ because they are ‘‘based on
actual weight.’’ Id. at 12. Finally, the
Postal Service argues that an
‘‘immediate effect’’ of its proposal
would be to double the number of
workshare discounts, from eight
discounts to 16, for dropshipped flatshaped USPS Marketing Mail
mailpieces. Id. at 12–13.
III. Notice and Comment
The Commission establishes Docket
No. RM2024–3 for consideration of
matters raised by the Petition. More
information on the Petition may be
accessed via the Commission’s website
at https://www.prc.gov. Interested
persons may submit comments on the
Petition and Proposal One no later than
February 26, 2024. Pursuant to 39 U.S.C.
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Federal Register / Vol. 89, No. 33 / Friday, February 16, 2024 / Proposed Rules
505, JP Klingenberg is designated as an
officer of the Commission (Public
Representative) to represent the
interests of the general public in this
proceeding.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket
No. RM2024–3 for consideration of the
matters raised by the Petition of the
United States Postal Service for the
Initiation of a Proceeding to Consider
Proposed Changes in Analytical
Principles (Proposal One), filed
February 8, 2024.
2. Comments by interested persons in
this proceeding are due no later than
February 26, 2024.
3. Pursuant to 39 U.S.C. 505, the
Commission appoints JP Klingenberg to
serve as an officer of the Commission
(Public Representative) to represent the
interests of the general public in this
docket.
4. The Secretary shall arrange for
publication of this order in the Federal
Register.
By the Commission.
Erica A. Barker,
Secretary.
Table of Contents
I. Written Comments
II. What is being addressed in this document?
III. What SIP revisions are being proposed by
EPA?
IV. What operating permit plan revisions are
being proposed by EPA?
V. Have the requirements for approval of a
SIP and the operating permit plan
revisions been met?
VI. What action is the EPA taking?
VII. Incorporation by Reference
VIII. Statutory and Executive Order Reviews
[FR Doc. 2024–03270 Filed 2–15–24; 8:45 am]
BILLING CODE 7710–FW–P
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 52 and 70
[EPA–R07–OAR–2024–0064; FRL–11722–
01–R7]
Air Plan Approval; Iowa; State
Implementation Plan and State
Operating Permits Program
I. Written Comments
Environmental Protection
Agency (EPA).
ACTION: Proposed rule.
AGENCY:
The Environmental Protection
Agency (EPA) is proposing to approve
revisions to the Iowa State
Implementation Plan (SIP) and the
Operating Permit Program for the State
of Iowa. The revisions update
incorporations by reference to EPA
methods for performance testing (stack
testing), update the definitions, and
adopt the most recent National Ambient
Air Quality Standards (NAAQS) for
ozone. These revisions do not impact
the stringency of the SIP or have an
adverse effect on air quality. The EPA’s
proposed approval of this rule revision
is being done in accordance with the
requirements of the Clean Air Act
(CAA).
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SUMMARY:
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16:47 Feb 15, 2024
Comments must be received on
or before March 18, 2024.
ADDRESSES: You may send comments,
identified by Docket ID No. EPA–R07–
OAR–2024–0064 to https://
www.regulations.gov. Follow the online
instructions for submitting comments.
Instructions: All submissions received
must include the Docket ID No. for this
rulemaking. Comments received will be
posted without change to https://
www.regulations.gov, including any
personal information provided. For
detailed instructions on sending
comments and additional information
on the rulemaking process, see the
‘‘Written Comments’’ heading of the
SUPPLEMENTARY INFORMATION section of
this document.
FOR FURTHER INFORMATION CONTACT:
Bethany Olson, Environmental
Protection Agency, Region 7 Office, Air
Quality Planning Branch, 11201 Renner
Boulevard, Lenexa, Kansas 66219;
telephone number: (913) 551–7905;
email address: olson.bethany@epa.gov.
SUPPLEMENTARY INFORMATION:
Throughout this document ‘‘we,’’ ‘‘us,’’
and ‘‘our’’ refer to the EPA.
DATES:
Jkt 262001
Submit your comments, identified by
Docket ID No. EPA–R07–OAR–2024–
0064, at https://www.regulations.gov.
Once submitted, comments cannot be
edited or removed from Regulations.gov.
The EPA may publish any comment
received to its public docket. Do not
submit electronically any information
you consider to be Confidential
Business Information (CBI) or other
information whose disclosure is
restricted by statute. Multimedia
submissions (audio, video, etc.) must be
accompanied by a written comment.
The written comment is considered the
official comment and should include
discussion of all points you wish to
make. The EPA will generally not
consider comments or comment
contents located outside of the primary
submission (i.e., on the web, cloud, or
other file sharing system). For
additional submission methods, the full
EPA public comment policy,
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12291
information about CBI or multimedia
submissions, and general guidance on
making effective comments, please visit
https://www.epa.gov/dockets/
commenting-epa-dockets.
II. What is being addressed in this
document?
The EPA is proposing to approve
revisions to the Iowa SIP and the
Operating Permits Program received on
March 29, 2023. The revisions
incorporate recent changes to Iowa
Administrative Code. The following
chapters are impacted:
• Chapter 20, ‘‘Scope of Title—
Definitions;’’
• Chapter 22, ‘‘Controlling
Pollution;’’
• Chapter 25, ‘‘Measurement of
Emissions;’’ and
• Chapter 28, ‘‘Ambient Air Quality
Standards.’’
The revisions update incorporations
by reference to EPA methods for
performance testing (stack testing) and
adopt the most recent National Ambient
Air Quality Standards (NAAQS) for
ozone. EPA proposes to find that these
revisions meet the requirements of the
Clean Air Act, do not impact the
stringency of the SIP, and do not
adversely impact air quality. The full
text of these changes can be found in the
State’s submission, which is included in
the docket for this action.
Sections 111 and 112 of the Clean Air
Act (CAA) allow EPA to delegate
authority to states for New Source
Performance Standards (NSPS) and
National Emission Standards for
Hazardous Air Pollutants (NESHAPs).
EPA has delegated authority to Iowa for
approved portions of these sections of
the CAA. Changes made to Iowa’s
Chapter 23 pertaining to new and
revised NSPS and NESHAPs are not
directly approved into the SIP, but
rather, are adopted by reference. Thus,
EPA is not proposing to approve the
changes to Chapter 23 of the Iowa
Administrative Code into the state’s SIP.
III. What SIP revisions are being
proposed by EPA?
The EPA is proposing the following
revisions to the Iowa SIP:
Chapter 20, Subrule 20.2, Scope of
Title-Definitions: The state revised the
definition of ‘‘EPA reference method’’ to
adopt the most current performance test
(stack test) method as specified in 40
CFR part 60, appendix A and amended
or corrected through February 16, 2021.
The proposed update will ensure that
state reference methods are equivalent
to Federal reference methods; thus, EPA
proposes to approve this change.
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Agencies
[Federal Register Volume 89, Number 33 (Friday, February 16, 2024)]
[Proposed Rules]
[Pages 12289-12291]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03270]
=======================================================================
-----------------------------------------------------------------------
POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2024-3; Order No. 6965]
Periodic Reporting
AGENCY: Postal Regulatory Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Commission is acknowledging a recent filing requesting the
Commission initiate a rulemaking proceeding to consider changes to
analytical principles relating to periodic reports (Proposal One). This
document informs the public of the filing, invites public comment, and
takes other administrative steps.
DATES: Comments are due: February 26, 2024.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at https://www.prc.gov. Those who cannot submit comments
electronically should contact the person identified in the FOR FURTHER
INFORMATION CONTACT section by telephone for advice on filing
alternatives.
FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Proposal One
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
On February 8, 2024, the Postal Service filed a petition pursuant
to 39 CFR 3050.11 requesting that the Commission initiate a rulemaking
proceeding to consider changes to analytical principles relating to
periodic reports.\1\ The Petition identifies the proposed analytical
changes filed in this docket as Proposal One.
---------------------------------------------------------------------------
\1\ Petition of the United States Postal Service for the
Initiation of a Proceeding to Consider Proposed Changes in
Analytical Principles (Proposal One), February 8, 2024 (Petition).
---------------------------------------------------------------------------
II. Proposal One
Background. The Postal Service has in recent years made several
proposals to improve the methodology used to calculate dropship
workshare discounts for various flat-shaped USPS Marketing Mail
mailpieces. Petition, Proposal One at 1. For some flat-shaped USPS
Marketing Mail pieces, two rates are available: (1) a per-piece rate
for pieces up to a 4-ounce breakpoint weight; (2) and a combined rate,
per piece and per pound, for pieces heavier than the 4-ounce breakpoint
weight. Id. In 2017, the Postal Service's passthrough calculation
divided the discount for the heavier pieces by the avoided cost per
pound for all pieces, both above and below the 4-ounce breakpoint. Id.
at 2. The Postal Services states that this method was ``incomplete,''
because ``[i]t did not include in its numerator pieces below the
pricing breakpoint, but it did include the weight of those pieces in
the denominator.'' Id. Therefore, the Postal Service proposed, and the
Commission approved, the following methodology to calculate dropship
workshare discounts for USPS Marketing Mail that included the discount
for pieces at or below the breakpoint weight in the numerator:
((Pound discount * Pounds above breakpoint) +
(Piece discount * Pieces below breakpoint)).
--------------------------------------------------
(Avoided cost per pound * Pounds above and below
breakpoint) \2\.
The Postal Service states that the usual approach of taking ``the
unit discount from the published benchmark price'' divided by the
avoided cost ``did not work because the benchmark price varies with the
different weights of the pieces mailed.'' Id. at 3. The Postal Service
states that it could only calculate the workshare discounts for these
flat-shaped USPS Marketing Mail mailpieces on a weighted basis after
mailing, ``when the weights and numbers of pieces sent were known.''
Id. The Postal Service contends that, as a practical matter, the
passthrough percentages for these mailpieces could sometime vary widely
with changes in mail volumes and weights which, in turn, made it more
difficult for the passthrough percentages to meet the requirements of
39 CFR 3030.284 and 3030.284. Id.
---------------------------------------------------------------------------
\2\ Id. (citing Docket No. RM2017-11, Order on Analytical
Principles Used in Periodic Reporting (Proposal Seven), November 20,
2017, at 4, 8 (Order No. 4227)).
---------------------------------------------------------------------------
The Postal Services states that it identified the problem complying
with 39 CFR 3030.284 and 3030.284 in Docket No. R2021-2, ``where it was
mathematically impossible for the Postal Service to make all six
passthrough percentages for Basic Carrier Route Flats (those on 5-Digit
pallets and those on all other pallets)'' comply with the Commission's
workshare discount regulations.\3\ The Postal Service therefore filed a
petition to address the non-compliance by modifying how it calculated
and
[[Page 12290]]
reported passthroughs for USPS Marketing Mail flats.\4\ Specifically,
the Postal Service proposed to calculate and report passthroughs for
USPS Marketing Mail Carrier Route Flats on 5-digit pallets and
passthroughs for all other USPS Marketing Mail Carrier Route Flats
together rather than separately. Petition, Proposal One at 4. The
Commission approved this proposal and Postal Service notes that the
Commission observed that the prior methodology ``leads to anomalous
results and could precipitate inefficient pricing.'' \5\
---------------------------------------------------------------------------
\3\ Id.; see Docket No. R2021-2, Order on Price Adjustments for
First-Class Mail, USPS Marketing Mail, Periodicals, Package
Services, and Special Services Products and Related Mail
Classification Changes, July 19, 2021 (Order No. 5937).
\4\ Petition, Proposal One at 3; see Docket No. RM2021-6,
Petition of the United States Postal Service for the Initiation of a
Proceeding to Consider Proposed Changes in Analytical Principles
(Proposal Three), April 8, 2021.
\5\ Petition, Proposal One at 4-5 (citing Docket No. RM2021-6,
Order on Analytical Principles Used in Periodic Reporting (Proposal
Three), November 4, 2021, at 11 (Order No. 6032)). Additionally, the
Postal Service states that, in approving the price adjustments in
Docket No. R2021-2, the Commission also granted a one-time exemption
from 39 CFR part 3030, subpart J for Basic Carrier Route Flats
entered at the [Destination Delivery Unit] DDU workshare discount
that noted the ``mathematical impossibility'' of compliance.
Petition, Proposal One at 4.
---------------------------------------------------------------------------
The Postal Service states that while the adjustments in 2021
prevented the compliance problem for USPS Marketing Mail Carrier Route
Flats on 5-digit pallets from reoccurring, ``the adjustments did not
otherwise change the methodology for calculating passthrough
percentages for other flat-shaped [USPS] Marketing Mail pieces with
piece and pound price components.'' Id. at 5. Instead, the Postal
Services states that changes in volumes and weight cause compliance
issues with 39 CFR 3030.284 and 3030.284. Id. The Postal Service states
that it ``found a great disparity in the volumes and weights of [USPS]
Marketing Mail Carrier Route Flats dropshipped at the [destination
sectional center facility] DSCF and [destination delivery unit
(DDU)].'' Id. at 5. The Postal Service states that it requested, and
the Commission granted, a waiver permitting the passthrough percentage
for USPS Marketing Mail Carrier Route Flats dropshipped at the DDU to
be 105 percent.\6\ Thereafter, the Postal Service again revised the way
it prices flat-shaped USPS Marketing Mail pieces with piece and pound
price components and offering dropship discounts on per-piece prices
only, which the Commission approved.\7\
---------------------------------------------------------------------------
\6\ Id. at 5-6 (citing Docket No. RM2022-12, Order Approving
Postal Service Application for Waiver under 39 CFR 3030.286, August
30, 2022, at 9, 11 (Order No. 6261)).
\7\ Petition, Proposal One at 6, 7-8 (citing Docket No. RM2023-
4, Petition of the United States Postal Service for the Initiation
of a Proceeding to Consider Proposed Changes in Analytical
Principles (Proposal One), February 10, 2023; Docket No. RM2023-4,
Order on Analytical Principles Used in Periodic Reporting (Proposal
One), April 6, 2023, at 14 (Order No. 6474).
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The Postal Service's current methodology for calculating workshare
discount passthrough percentages is ``the same . . . as it uses for
most other products, dividing the per-piece discount by the per-piece
cost avoidance.'' Petition, Proposal One at 7. The Postal Service
states that the passthrough percentages no longer vary with the
different weights of pieces mailed because the passthroughs are
calculated independently of the volumes and weights of pieces mailed.
Id.
The Postal Service states that its current methodology for
calculating workshare discount passthrough percentages ``has some
limitations.'' Id. The Postal Service argues that because pound prices
do not vary by dropship entry point, it reduces incentives for mailers
to dropship flat-shaped pieces weighing more than 4 ounces closer to
their delivery destinations. Id. at 8. The Postal Service also states
that its current methodology does not ``reflect the avoided costs of
delivering flat-shaped [USPS] Marketing Mail pieces as closely as they
could.'' Id. at 9. Instead, the Postal Service states that workshare
discounts for pieces weighing more than 4 ounces are too small relative
to their avoided costs, while those for pieces weighing 4 ounces or
less are too large. Id.
Proposal. The Postal Service proposes to address the limitations in
its current methodology for calculating workshare discount passthrough
percentages by separately deriving prices for flat-shaped USPS
Marketing Mail pieces at or below the 4-ounce breakpoint from those
pieces above the 4-ounce breakpoint. Id. For mailpieces at or below the
4-ounce breakpoint, the Postal Service states that:
mailers would continue to pay only a per-piece
price;
dropship discounts would be given on these per-
piece prices, so that per-piece prices would still vary based upon
entry (i.e., origin, (destination network distribution center) DNDC,
DSCF, or DDU); and
the methodology for calculating passthroughs
would remain substantially unchanged from the current formula.
Id. at 10. The Postal Service states that the only difference in
its proposed methodology and the current methodology is the per-piece
cost avoidance from Folder 13, as submitted in its annual compliance
filing. Id. The Postal Service's proposed methodology for calculating
workshare discount passthrough percentages for these pieces is as
follows:
Per-piece dropship discount/per-piece dropship cost avoidance of
lightweight pieces (Folder 13)
Id. The Postal Service contends that the change to the cost
avoidance component of the passthrough calculation is much closer to
actual avoided costs than if the weights of pieces over 4-ounces were
included. Id.
For mailpieces weighting 4-ounces or more, the Postal Services
states:
prices would continue to have per-piece and per-
pound components;
pound prices would, once again, apply to the
entire weight of a piece, not just the pounds above the breakpoint as
they do in the current price structure; and
the Postal Service would reintroduce per-pound
dropship discounts, and so the per-pound prices would again vary by
dropship entry point, as they did prior to adopting the current
methodology.
Id. at 10-11. The Postal Service states that, instead of basing
dropship discounts on the per-piece rates and cost avoidances, it
proposes to base dropship workshare discounts for pieces weighing 4
ounces or more on the per-pound component of the rates. Id. at 12. As
such, the Postal Service's proposed methodology for calculating
passthroughs for pieces weighing 4 ounces or more is:
Per-pound dropship discount/Per-pound dropship cost avoidance (Folder
13)
Id.
The Postal Service contends that ``the virtue'' of the proposed
methodology is that the discounts are tied directly to the per-pound
cost avoidance and are ``better aligned with actual cost avoidances''
because they are ``based on actual weight.'' Id. at 12. Finally, the
Postal Service argues that an ``immediate effect'' of its proposal
would be to double the number of workshare discounts, from eight
discounts to 16, for dropshipped flat-shaped USPS Marketing Mail
mailpieces. Id. at 12-13.
III. Notice and Comment
The Commission establishes Docket No. RM2024-3 for consideration of
matters raised by the Petition. More information on the Petition may be
accessed via the Commission's website at https://www.prc.gov. Interested
persons may submit comments on the Petition and Proposal One no later
than February 26, 2024. Pursuant to 39 U.S.C.
[[Page 12291]]
505, JP Klingenberg is designated as an officer of the Commission
(Public Representative) to represent the interests of the general
public in this proceeding.
IV. Ordering Paragraphs
It is ordered:
1. The Commission establishes Docket No. RM2024-3 for consideration
of the matters raised by the Petition of the United States Postal
Service for the Initiation of a Proceeding to Consider Proposed Changes
in Analytical Principles (Proposal One), filed February 8, 2024.
2. Comments by interested persons in this proceeding are due no
later than February 26, 2024.
3. Pursuant to 39 U.S.C. 505, the Commission appoints JP
Klingenberg to serve as an officer of the Commission (Public
Representative) to represent the interests of the general public in
this docket.
4. The Secretary shall arrange for publication of this order in the
Federal Register.
By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024-03270 Filed 2-15-24; 8:45 am]
BILLING CODE 7710-FW-P