2020-25620. Change in Rates and Classes of General Applicability for Competitive Products

AGENCY:

Postal Service^TM.

ACTION:

Notice of a change in rates of general applicability for competitive products.

SUMMARY:

This notice sets forth changes in rates of general applicability for competitive products.

DATES:

The change in rates is effective January 24, 2021.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Reed, 202-268-3179.

SUPPLEMENTARY INFORMATION:

On November 12, 2020, pursuant to their authority under 39 U.S.C. 3632, the Governors of the Postal Service established prices and classification changes for competitive products. The Governors' Decision and the record of proceedings in connection with such decision are reprinted below in accordance with section 3632(b)(2).

Joshua J. Hofer,

Attorney, Federal Compliance.

Decision of the Governors of the United States Postal Service on Changes in Rates of General Applicability for Competitive Products (Governors' Decision No. 20-5)

November 12, 2020

Statement of Explanation and Justification

Pursuant to authority under section 3632 of title 39, as amended by the Postal Accountability and Enhancement Act of 2006 (“PAEA”), we establish new prices of general applicability for the Postal Service's shipping services (competitive products), and such changes in classifications as are necessary to define the new prices. The changes are described generally below, with a detailed description of the changes in the attachment. The attachment includes the draft Mail Classification Schedule sections with classification changes in legislative format, and new prices displayed in the price charts.

As shown in the nonpublic annex being filed under seal herewith, the changes we establish should enable each competitive product to cover its attributable costs (39 U.S.C. 3633(a)(2)) and should result in competitive products as a whole complying with 39 U.S.C. 3633(a)(3), which, as implemented by 39 CFR 3035.107(c), requires competitive products collectively to contribute a minimum of 9.1 percent to the Postal Service's institutional costs. Accordingly, no issue of subsidization of competitive products by market dominant products should arise (39 U.S.C. 3633(a)(1)). We therefore find that the new prices are in accordance with 39 U.S.C. 3632-3633 and 39 CFR 3035.102.

I. Domestic Products

A. Priority Mail Express

Overall, the Priority Mail Express price change represents a 1.2 percent increase. The existing structure of zoned Retail, Commercial Base, and Commercial Plus price categories is maintained, with Commercial Base and Commercial Plus prices continuing to be set equal to each other. Dimensional weighting, which was introduced for all zones in 2019, will continue in 2021. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

Retail prices will increase an average of 1.0 percent. The price for the Retail Flat Rate Envelope, a significant portion of all Priority Mail Express volume, will remain priced at $26.35, with the Legal Size and Padded Flat Rate Envelopes priced at $26.50 and $26.95, respectively.

The Commercial Base price category offers lower prices to customers who use online and other authorized postage payment methods. The Commercial Base prices will increase 2.5 percent on average. Commercial Base prices will, on average, reflect a 14.1 percent discount off of Retail prices.

The Commercial Plus price category has traditionally offered even lower prices to large-volume customers. Commercial Plus prices were matched to the Commercial Base prices in 2016 and will continue to be in 2021. For January, Commercial Plus prices as a whole will receive a 2.5 percent increase on average.

B. Priority Mail

On average, the Priority Mail prices will be increased by 3.5 percent. The existing structure of Priority Mail Retail, Commercial Base, and Commercial Plus price categories is maintained. Dimensional weighting, which was extended to all zones in 2019, will continue in 2021. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

Retail prices will increase an average of 3.0 percent. Retail Flat Rate Box prices will be: Small, $8.45; Medium, $15.50; Large, $21.90 and Large APO/FPO/DPO, $20.40. Thus, the Large APO/FPO/DPO Flat Rate Box will be $1.50 less than the Large Flat Rate Box. The regular Flat Rate Envelope will be priced at $7.95, with the Legal Size and Padded Flat Rate Envelopes priced at $8.25 and $8.55, respectively.

The Commercial Base price category offers lower prices to customers using authorized postage payment methods. The Commercial Base prices will increase 3.6 percent on average. Commercial Base prices will, on average, reflect a 14.4 percent discount off of Retail prices.

The Commercial Plus price category has traditionally offered even lower prices to large-volume customers. For January, Commercial Plus prices as a whole will receive a 4.5 percent increase and will average 14.1 percent off Retail prices.

C. Parcel Select

On average, prices for destination-entered non-Lightweight Parcel Select, the Postal Service's bulk ground shipping product, will increase 8.9 percent. For destination delivery unit (DDU) entered parcels, the average price increase is 4.9 percent. For destination sectional center facility (DSCF) destination entered parcels, the average price increase is 10.7 percent. For destination network distribution center (DNDC) parcels, the average price increase is 9.7 percent. Prices for Parcel Select Lightweight will increase by 20.0 percent. Parcel Select Ground will see a 1.3 percent price increase. Dimensional weighting, which was introduced for all zones in 2019, will continue in 2021. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

D. Parcel Return Service

Parcel Return Service prices will have an overall price increase of 4.9 percent. Prices for parcels retrieved at a return sectional center facility (RSCF) will increase by 4.9 percent, and prices for parcels picked up at a return delivery unit (RDU) will increase 4.9 percent. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

E. First-Class Package Service

First-Class Package Service (FCPS) continues to be positioned as a lightweight (less than one pound) offering primarily used by businesses for fulfillment purposes. In 2017, First-Class Mail Parcels were transferred to the competitive product list and renamed First-Class Package Service—Retail (FCPS-Retail), and in 2019, the FCPS-Retail and FCPS-Commercial price categories were given zone-based pricing. Overall, FCPS prices will increase 6.2 percent, with a 4.8 percent increase for FCPS-Retail and a 6.5 percent increase for FCPS-Commercial. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

F. USPS Retail Ground

USPS Retail Ground prices will increase 3.0 percent. Customers shipping in Zones 1-4 will continue to receive Priority Mail service and will only default to Retail Ground if the item contains hazardous material or is otherwise not permitted to travel by air transportation. New for 2021, a $100 fee will be assessed on parcels found in the mailstream that exceed the maximum mailable size limit (combined length and girth greater than 130 inches).

G. Domestic Extra Services

Premium Forwarding Service (PFS) prices will increase between 3.9 and 4.0 percent in 2021, depending on the specific rate element. The retail counter enrollment fee will increase to $22.75. The online enrollment option, introduced in 2014, will now be available for $20.90. The weekly reshipment fee will increase to $22.75. PFS Local, which was introduced in 2019 for P.O. Box customers, will have an increase in the reshipment fee to $22.75. Prices for Adult Signature service will increase to $6.90 for the basic service and $7.15 for the person-specific service. Address Enhancement Service price increases will vary depending on the particular rate element, to ensure adequate cost coverage. Competitive Post Office Box prices will be increasing 23.3 percent on average, and some adjustments will be made to the price ranges. Package Intercept Service will increase 4.1 percent, to $15.25. The Pickup On Demand fee will increase to $25.00 for 2021. Premium Data Retention and Retrieval Service, which was introduced in 2020, will have no price change for 2021.

Order

The changes in prices and classes set forth herein shall be effective at 12:01 a.m. on January 24, 2021. We direct the Secretary to have this decision published in the Federal Register in accordance with 39 U.S.C. 3632(b)(2), and direct management to file with the Postal Regulatory Commission appropriate notice of these changes.

By The Governors:

/s/

Robert M. Duncan,

Chairman, Board of Governors.

United States Postal Service Office of the Board of Governors

Certification of Governors' Vote On Governors' Decision No. 20-5

Consistent with 39 U.S.C. 3632(a), I hereby certify that, on November 12, 2020, the Governors voted on adopting Governors' Decision No. 20-5, and that a majority of the Governors then holding office voted in favor of that Decision.

/s/

Katherine Sigler,

Secretary of the Board of Governors (A).

Dated: November 12, 2020.