2024-24398. Addition of New Market Dominant Product: “Connect Local Mail”

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Postal Service

AGENCY:

Postal Service^TM.

ACTION:

Notice of request to convert experimental product to a permanent offering.

SUMMARY:

The Postal Service gives notice its request to convert an experimental product to a permanent offering in accordance with statutory requirements.

DATES:

October 22, 2024.

FOR FURTHER INFORMATION CONTACT:

Sean C. Robinson, 202-268-8405.

SUPPLEMENTARY INFORMATION:

The United States Postal Service hereby gives notice pursuant to 39 U.S.C. 3642(d)(1) that it plans to add a new product to the market dominant product list based on the experimental product “Connect Local Mail” on January 1, 2025. On October 3, 2024, the Postal Service filed with the Postal Regulatory Commission a request setting out the basis for the Postal Service's determination that the new product meets the criteria established under 39 U.S.C. 3642(b), as discussed below. Documents are available at www.prc.gov, Docket No. MC2025-19.

Connect Local Mail is properly classified as a market dominant price category under chapter 36 of title 39 of the United States Code and is consistent with the applicable criteria of the chapter. Firms offering products similar to Connect Local Mail are sufficiently distinguishable that the Postal Service believes Connect Local Mail operates largely in a distinct market unto itself. Moreover, Connect Local Mail is currently subject to the letter monopoly, and hence must be categorized as market dominant for that reason.

Connect Local Mail is designed for the local delivery of documents, fitting into the definition of “letter” under 39 CFR 310.1 as a “message directed to a specific person or address and recorded in or on a tangible object.” A private express established for the conveyance of such documents for compensation at the established price point would be prohibited under 18 U.S.C. 1696(a). Therefore, Connect Local Mail, like the other price categories under First-Class Mail, is covered by the postal monopoly reserved to the Postal Service under 18 U.S.C. 1696.

The Postal Service views potential substitutes for Connect Local Mail to be local couriers and messengers delivering documents, overnight and/or 2-day delivery services offered by large national competitors, and smaller companies that deliver documents on an expedited basis. Connect Local Mail will not create an unfair or inappropriate advantage for the Postal Service compared to other small businesses in this space, such as local courier services. Local courier services typically build in pick-up on demand services, which justify a higher price and differentiate their services from Connect Local Mail. Connect Local Mail ( print page 84406) is in line-of-travel for pick-up and drop-off; there is no direct end-to-end transport offered by Connect Local Mail, and it is therefore not as responsive or customizable as a local courier service. In many ways, Connect Local Mail also offers same-day delivery on a more limited basis than a local courier service. It is better suited to businesses who regularly schedule local deliveries (such as mailing bills to their customers), allowing them to plan to meet the requirements for Connect Local Mail ( e.g., drop-off at a designated entry unit by the Critical Entry Time, mail prepared in time for carrier pick-up in their line-of-travel). It is not as well suited to the type of ad hoc document delivery that courier services specialize in.

Sean C. Robinson,

Attorney, Corporate and Postal Business Law.