E9-28828. Change in Rates and Classes of General Applicability for Competitive Products

AGENCY:

Postal Service.

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:

Effective Date: January 4, 2010.

FOR FURTHER INFORMATION CONTACT:

Daniel J. Foucheaux, Jr., 202-268-2989.

SUPPLEMENTARY INFORMATION:

On September 22, 2009, 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 § 3632(b)(2). Implementing regulations were published in the Federal Register on November 10, 2009 (74 FR 57899).

Stanley F. Mires,

Chief Counsel, Legislative.

Governors' Decision No. 09-13

Decision of the Governors of the United States Postal Service on Changes in Rates and Classes of General Applicability for Competitive Products (Governors' Decision No. 09-13)

September 22, 2009

Statement of Explanation and Justification

Pursuant to our authority under section 3632 of title 39, as amended by the Postal Accountability and Enhancement Act of 2006 (“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 changes in classification language 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 3015.7(c), requires competitive products to contribute a minimum of 5.5 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 and classification changes are in accordance with 39 U.S.C. 3632-3633 and 39 CFR 3015.2.

I. Domestic Products

A. Express Mail

Overall, the Express Mail price change represents a 4.5 percent increase. The existing structure of zoned Retail, Commercial Base and Commercial Plus price categories is maintained.

Retail prices will increase an average of 4.5 percent. The price for the Retail flat-rate envelope, almost half of all Express Mail volume, will increase by 4.5 percent to $18.30.

The Commercial Base price category offers lower prices to customers who use online and other authorized postage payment methods. The average price increase for Commercial Base will be the same as Retail, 4.5 percent.

The Commercial Plus price category offers even lower prices to large-volume customers who ship at least 6,000 Express Mail pieces annually. Commercial Plus prices will increase 4.4 percent.

B. Priority Mail

Overall, Priority Mail prices will increase by 3.3 percent. In addition to the existing Retail, Commercial Base, and Commercial Plus price categories, a new price category, Commercial Plus Cubic, is being introduced.

Retail prices will increase an average of 3.9 percent. Flat-rate box prices will be: Small, $4.95; Medium, $10.70; Large, $14.50; and Large APO/FPO, $12.50. The name of the medium-sized box is changed from “Regular” to “Medium.”

The Commercial Base price category offers lower prices to customers using online and other authorized postage payment methods. The average price increase for Commercial Base will be 2.9 percent.

The Commercial Plus price category offers even lower prices to customers who ship more than 100,000 Priority Mail pieces or more than 600 Priority Mail Open and Distribute containers annually. The average price increase for Commercial Plus will be 0.9 percent. Two new innovations in Commercial Plus will be added this year—a half pound price starting at $4.22, and a flat-rate padded envelope priced at $4.95.

The new category, Commercial Plus Cubic, offers attractive prices, based on package size (cubic volume), to customers who ship more than 250,000 Priority Mail pieces annually, for their shipments of smaller, cost-efficient packages that weigh less than 20 pounds which are no larger than ½ cubic foot in volume.

C. Parcel Select

On average, prices for Parcel Select, the Postal Service's bulk ground shipping product, will increase 4.7 percent. For destination entered parcels, the average price increases are 3.9 percent for parcels entered at a destination delivery unit (DDU), 6.9 percent for parcels entered at a destination plant (DSCF) and 6.9 percent for parcels entered at a destination Bulk Mail Center (DBMC). There are no changes to nondestination-entered parcels.

The Loyalty Incentive and Growth Incentive rebates are being eliminated as of the end of May 2010. Also, the 50-piece volume minimum for the Barcoded Nonpresort price category is eliminated for parcels paid using PC Postage.

Non-substantive, editorial changes are also made. Headings separating destination-entered and nondestination-entered categories are added to the list of price categories. The price category list is also modified to conform to the way the price charts are displayed, including elimination of repetitive notes from the price charts.

D. Parcel Return Service

Parcel Return Service prices will have an overall price increase of 3.0 percent. Prices will increase 3.3 percent for parcels picked up at a Bulk Mail Center (RBMC) and 2.1 percent for parcels picked up at a delivery unit (RDU).

E. Premium Forwarding Service

There are no changes.

II. International Products

A. Expedited Services

International expedited services include GXG and Express Mail International (EMI). Overall, GXG prices will rise by 4.1 percent, and EMI will be subject to an overall 2.9 percent increase. The existing structure of both services will remain the same.

B. Priority Mail International

The overall increase for Priority Mail International (PMI) will be 3.0 percent. The existing structure of PMI will remain the same; however, minor edits are made to the Mail Classification Schedule for PMI parcels by creating a single maximum dimension for both rectangular and non-rectangular pieces. Corresponding changes are also made to the classification language for inbound air parcels, as well as PMI parcels entered under customized agreements. In addition, rate group 6 is assigned to Cuba. This corrects the MCS text, since the Postal Service currently offers the full array of outbound letter post, including PMI flat-rate envelope and small flat-rate box, to that destination. The name of the medium-sized flat-rate box is changed from “Regular” to “Medium.”

C. Other

A minor classification change is included in the country schedules in Part D of the MCS. Specifically, rate groups are assigned to Kosovo. These country group assignments correspond to those for Serbia.

Order

The changes in prices and classes set forth herein shall be effective at 12:01 a.m. on January 4, 2010. We direct the Secretary to have this decision published in the Federal Register in accordance with 39 U.S.C. 3632(b)(2). We also direct management to file with the Postal Regulatory Commission appropriate notice of these changes.

By The Governors:

Carolyn Lewis Gallagher

Chairman