03-23917. Parcel Return Services Experiment

AGENCY:

Postal Service.

ACTION:

Final rule.

SUMMARY:

This final rule sets forth the Domestic Mail Manual (DMM) standards adopted by the Postal Service to implement the Parcel Return Services experiment pursuant to the Decision of the Governors of the Postal Service approving the Recommended Decision of the Postal Rate Commission in its Docket No. MC2003-2. The recommended decision is based on the Stipulation and Agreement that represented a negotiated settlement of all issues in that docket.

EFFECTIVE DATE:

This final rule is effective at 12:01 a.m. on October 19, 2003.

FOR FURTHER INFORMATION CONTACT:

Obataiye B. Akinwole, 703-292-3643.

SUPPLEMENTARY INFORMATION:

 

PRS Background

The Postal Service is conducting this Parcel Return Services (PRS) experiment to respond to the rapidly evolving market of Internet and catalog sales. Merchandise sales inevitably lead to returns, and many consumers, as well as Internet and catalog retailers, rely on the Postal Service for return of merchandise. By taking advantage of new ways of handling returned parcels, the new Parcel Return Services can provide convenience to consumers and competitive prices for retailers. Commercial shippers generally enter their parcels in bulk at postal facilities near their destinations and receive discounts for doing so. With the PRS experiment, they will be able to pick up returns in bulk at those same facilities and receive discounts for the handling and transportation costs the Postal Service otherwise would have incurred for single-piece handling and transportation of those parcels back to the original shipper. Thus, the experiment provides return parcels with the benefits of worksharing and the advantages of Parcel Select service realized by mailers for outgoing parcels.

PRS Rate Categories

PRS consists of three rate categories for returned Package Services parcels retrieved in bulk by a permit holder.

• The Parcel Select Return Delivery Unit (RDU) rate category applies to Parcel Post subclass parcels retrieved from a designated delivery unit.^[1] The RDU rates are flat rates that do not vary by weight. There is one rate category for all regular-sized parcels and a separate flat rate for all oversized parcels.

• The Parcel Select Return Bulk Mail Center (RBMC) rate category applies to Parcel Post subclass parcels retrieved in bulk from any of the 21 Bulk Mail Centers (BMCs) listed in DMM L601, or other equivalent facility. Permit holders are required to develop reverse manifests of each piece they retrieve.
• The Bound Printed Matter (BPM) Return Bulk Mail Center (RBMC) rate category applies to BPM subclass parcels retrieved in bulk from any of the 21 BMCs. Permit holders are required to develop reverse manifests of each piece they retrieve. Flat-shaped single-piece rate BPM eligible for a rate reduction in the form of a flat differential does not qualify for the RBMC rate. There is no separate BPM rate for parcels retrieved from RDUs. BPM parcels can qualify as PSRS parcels retrieved from a DDU.

PRS Rates

As part of this experiment, participants will be charged the applicable rate in new DMM G993.3.1 through 3.4.

Parcels must be retrieved on a regular schedule. From BMCs, a minimum of every 48 hours excluding Sundays and Postal Service holidays, and from designated delivery units, a minimum of once every seven days. Permit holders or their agents would be required to set up a recurring or standing appointment to retrieve PRS parcels. If the permit holder (or agent) already has existing appointments to deliver Parcel Select parcels to a BMC or DDU, the same appointment can be used for retrieving PRS parcels.

Participation in the first year of the experiment will be limited to 20 approved participants (permit holders). An additional 10 participants may be added during the second year. Participants will pay one annual PRS permit fee and one annual PRS advance deposit accounting fee of $150.00 and $475.00, respectively, at the post office where the PRS permit is held. Only one permit and accounting fee is required for each participant (permit holder). Payment of these fees allows the permit holder to retrieve both Parcel Select and BPM PRS parcels for their clients, as well as their own parcels, at all approved locations. Permit holders must use the Centralized Account Processing System (CAPS) electronic postage payment system to fund postage payments for all returns through all locations. Information on CAPS can be found at http://caps.usps.gov.

The PRS permit may be canceled by the Postal Service for failure to maintain sufficient funds in a trust account to cover postage and fees on returned parcels, for distributing labels that do not conform to Postal Service specifications, or for several other reasons set out in this rule.

Because of the purpose and limited scope of this experiment, the Postal Service finds no need to solicit comments on the standards for Parcel Return Services or to delay implementation of this experiment.

List of Subjects in 39 CFR Part 111

• Administrative practice and procedure
• Postal Service

For the reasons discussed above, the Postal Service hereby adopts the following amendments to the Domestic Mail Manual, which is incorporated by reference in the Code of Federal Regulations (see 39 CFR part 111).

PART 111—[AMENDED]

1. The authority citation for 39 CFR part 111 continues to read as follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 101, 401, 403, 404, 414, 3001-3011, 3201-3219, 3403-3406, 3621, 3626, 5001.

2. Revise the following sections of the DMM as set forth below:

G General Information

* * * * *

G900 Experimental Classification and Rate Filings

* * * * *

G990 Experimental Classifications and Rates

* * * * *

[Add new G993 to read as follows:]

G993  Parcel Return Services

Summary G993 describes the eligibility, standards, physical characteristics, markings, and rates that apply to the experimental Parcel Return Services classification.

1.0 BASIC INFORMATION

1.1 Description

The standards in G993 apply to parcels that are retrieved in bulk by authorized permit holders or their agents who are approved participants in the Parcel Return Services (PRS) experiment. The permit holder guarantees payment of postage and retrieval of all PRS parcels mailed with a PRS label. The permit holder has the option of retrieving returned parcels at a designated delivery unit (DDU) (the post office where PRS parcels are mailed by a customer)—or at the bulk mail center (BMC) that serves the post office where returned parcels are deposited by a customer. Payment for parcels returned under PRS is deducted from a separate advance deposit (postage due) account that is funded through the Centralized Account Processing System (CAPS).

1.2 Applicability

Parcels may use PRS when all of the following conditions apply:

a. Parcels contain merchandise being returned to the merchant.

b. Parcels bear a PRS label that meets the standards in 4.0.

c. The parcel shows the permit number, and the permit holder has paid the annual PRS permit fee and the annual PRS accounting fee.

1.3 Services

Package Services pieces using Parcel Return Services are not eligible for ancillary or special services.

1.4 Customer Mailing Options

Returned parcels must be mailed within the service area of the post office shown in the return address on the label. They may be deposited at:

a. The main post office or any associated office, station, or branch.

b. In any collection box (except an Express Mail box).

c. With any rural carrier.

d. On business routes during regular mail delivery if prior arrangements are made with the carrier.

e. As part of a collection run for other mail (special arrangements may be required).

f. At any place designated by the postmaster for the receipt of mail.

1.5 Participation

Companies who wish to participate in this experiment must send a request, on company letterhead, to the manager, Mailing Standards (see G043 for address). Requests also may be sent via e-mail to [e-mail]; or by fax to 703-292-4058. The request must contain the following information:

a. Company name and address.

b. Individual contact name, telephone number, fax number, and e-mail address.

c. The rate category or categories to be used; proposed retrieval locations (delivery units and bulk mail centers); and individual contact information for the company contact or agent at each location.

d. A list of clients, if the applicant is not the merchant (required for mailer identification number assignment).

e. Projected volume per quarter for each RDU and/or RBMC.

f. Label and instruction examples that comply with 4.0.

g. Date(s) label distribution will begin for each client.

h. Description of the electronic returns manifesting system to be used to document returns, by location and rate eligibility.

i. Current Parcel Select and BPM parcel profile (volumes and weights).

1.6 Evaluation

The electronic returns manifesting system will be subject to approval by the manager, Business Mailer Support (BMS). BMS can provide applicants information for developing and receiving approval for a parcel returns system, electronic file transfer requirements, and certification process. Once approved, participants must comply with the terms of the PRS Service Agreement and pay the annual fees in 2.2 and 2.3. The manager, Mailing Standards may request additional data and a visit to the applicant's plant. In selecting participants, the manager, Mailing Standards uses the following additional criteria:

a. The applicant must be prepared to begin operation at a mutually agreed upon time soon after selection.

b. The applicant must demonstrate the ability to retrieve parcels on a regular schedule mutually agreed upon from the designated RDU, RBMC, or both.

1.7 Authorization

Participants during the first year of this experiment will be limited to the first 20; depending on the results in year one, 10 additional participants may be approved during the second year. The manager, Mailing Standards will review each request and will proceed as follows:

a. If the applicant meets the conditions required for the PRS experiment and the application is otherwise consistent with the purposes and goals of the experiment, the manager, Mailing Standards will approve the letter of request. For the purposes of the experiment, the Postal Service may require additional documentation and periodic review and inspection of each participant's PRS processing and accounting operations.

b. If the application does not appear to meet the conditions required for the PRS experiment, the manager, Mailing Standards will deny the request and send a written notice to the applicant, with the reasons for denial.

1.8 Procedure

Upon approval and payment of fees, participants must provide a copy of the approval to each contact at each pickup location. The manager, Mailing Standards will provide a copy to each district manager, Business Mail Entry that has a pickup location. Local post offices can determine payment of fees through CAPS.

1.9 Pickup Schedule

Parcels must be retrieved on a regular schedule: from BMCs, a minimum of every 48 hours excluding Sundays and Postal Service holidays; and from DDUs, a minimum of once every seven days. Permit holders or their agents will be required to set up a recurring or standing appointment to retrieve PRS parcels. If the permit holder (or agent) already has existing appointments to deliver Parcel Select parcels to a BMC or DDU that meet these standards, the same appointment can be used for retrieving PRS parcels.

2.0 POSTAGE AND FEES

2.1 Postage

There are three PRS rate categories:

a. Parcel Select RDU. Parcels returned as Parcel Post to, and retrieved in bulk from, a designated delivery unit.

b. Parcel Select RBMC. Parcels returned as Parcel Post to, and retrieved in bulk from, a designated BMC.

c. Bound Printed Matter RBMC. Parcels returned as Bound Printed Matter to, and retrieved in bulk from, a designated BMC.

2.2 Permit Fee

A $150.00 permit fee must be paid annually at the post office where the PRS permit is held. The permit must remain valid during the course of the experiment.

2.3 Advance Deposit Account and Annual Accounting Fee

The participant must pay postage through an advance deposit account and must pay an annual accounting fee of $475.00. The account must remain valid during the course of the experiment.

3.0 RATES

3.1 Parcel Select Return Services—Return Delivery Unit

Regardless of weight, any parcel that measures more than 108 inches (but not more than 130 inches) in combined length and girth must pay the oversized rate.

Weight not over (pounds)	Rate
1	$2.00
2	2.00
3	2.00
4	2.00
5	2.00
6	2.00
7	2.00
8	2.00
9	2.00
10	2.00
11	2.00
12	2.00
13	2.00
14	2.00
15	2.00
16	2.00
17	2.00
18	2.00
19	2.00
20	2.00
21	2.00
22	2.00
23	2.00
24	2.00
25	2.00
26	2.00
27	2.00
28	2.00
29	2.00
30	2.00
31	2.00
32	2.00
33	2.00
34	2.00
35	2.00
36	2.00
37	2.00
38	2.00
39	2.00
40	2.00
41	2.00
42	2.00
43	2.00
44	2.00
45	2.00
46	2.00
47	2.00
48	2.00
49	2.00
50	2.00
51	2.00
52	2.00
53	2.00
54	2.00
55	2.00
56	2.00
57	2.00
58	2.00
59	2.00
60	2.00
61	2.00
62	2.00
63	2.00
64	2.00
65	2.00
66	2.00
67	2.00
68	2.00
69	2.00
70	2.00
Oversize	7.51

3.2 Parcel Select Return Services—Return BMC Machinable

Parcels that weigh less than 15 pounds but measure more than 84 inches in combined length and girth are charged the applicable rate for a 15-pound parcel.

Weight not over (pounds)	Zones 1 & 2	Zone 3	Zone 4	Zone 5
1	$2.10	$2.13	$2.19	$2.28
2	2.67	2.70	2.77	2.88
3	3.22	3.25	3.34	3.46
4	3.42	3.76	3.86	4.00
5	3.59	4.16	4.29	4.49
6	3.75	4.52	4.65	4.94
7	3.90	4.83	4.98	5.35
8	4.47	5.12	5.28	5.74
9	4.60	5.36	5.59	6.09
10	4.77	5.67	5.88	6.42
11	4.90	5.88	6.14	6.72
12	5.05	6.08	6.40	7.01
13	5.18	6.24	6.64	7.27
14	5.30	6.36	6.89	7.52
15	5.41	6.53	7.10	7.76
16	5.52	6.70	7.30	7.98
17	5.65	6.86	7.52	8.19
18	5.74	7.01	7.71	8.38
19	5.86	7.16	7.89	8.57
20	5.96	7.30	8.05	8.74
21	6.05	7.44	8.20	8.91
22	6.16	7.56	8.34	9.06
23	6.24	7.72	8.48	9.21
24	6.33	7.84	8.60	9.36
25	6.41	7.96	8.72	9.49
26	6.51	8.07	8.85	9.62
27	6.59	8.20	8.96	9.74
28	6.66	8.32	9.05	9.86
29	6.75	8.44	9.16	9.97
30	6.83	8.54	9.26	10.07
31	6.91	8.62	9.35	10.18
32	7.00	8.74	9.45	10.27
33	7.06	8.84	9.53	10.37
34	7.14	8.92	9.61	10.45
35	7.20	9.03	9.69	10.54

3.3 Parcel Select Return Services—Return BMC Nonmachinable

Parcels that weigh less than 15 pounds but measure more than 84 inches in combined length and girth are charged the applicable rate for a 15-pound parcel. Regardless of weight, any parcel that measures more than 108 inches (but not more than 130 inches) in combined length and girth must pay the oversized rate.

Weight not over (pounds)	Zones 1 & 2	Zone 3	Zone 4	Zone 5
1	$3.45	$3.48	$3.54	$3.63
2	4.02	4.05	4.12	4.23
3	4.57	4.60	4.69	4.81
4	4.77	5.11	5.21	5.35
5	4.94	5.51	5.64	5.84
6	5.10	5.87	6.00	6.29
7	5.25	6.18	6.33	6.70
8	5.82	6.47	6.63	7.09
9	5.95	6.71	6.94	7.44
10	6.12	7.02	7.23	7.77
11	6.25	7.23	7.49	8.07
12	6.40	7.43	7.75	8.36
13	6.53	7.59	7.99	8.62
14	6.65	7.71	8.24	8.87
15	6.76	7.88	8.45	9.11
16	6.87	8.05	8.65	9.33
17	7.00	8.21	8.87	9.54
18	7.09	8.36	9.06	9.73
19	7.21	8.51	9.24	9.92
20	7.31	8.65	9.40	10.09
21	7.40	8.79	9.55	10.26
22	7.51	8.91	9.69	10.41
23	7.59	9.07	9.83	10.56
24	7.68	9.19	9.95	10.71
25	7.76	9.31	10.07	10.84
26	7.86	9.42	10.20	10.97
27	7.94	9.55	10.31	11.09
28	8.01	9.67	10.40	11.21
29	8.10	9.79	10.51	11.32
30	8.18	9.89	10.61	11.42
31	8.26	9.97	10.70	11.53
32	8.35	10.09	10.80	11.62
33	8.41	10.19	10.88	11.72
34	8.49	10.27	10.96	11.80
35	8.55	10.38	11.04	11.89
36	8.65	10.49	11.14	12.00
37	8.72	10.56	11.20	12.06
38	8.76	10.63	11.25	12.11
39	8.82	10.71	11.29	12.16
40	8.85	10.76	11.33	12.21
41	8.92	10.85	11.37	12.26
42	8.95	10.90	11.42	12.30
43	8.99	10.96	11.46	12.33
44	9.04	11.02	11.50	12.36
45	9.07	11.07	11.64	12.39
46	9.14	11.14	11.67	12.42
47	9.19	11.18	11.70	12.45
48	9.22	11.25	11.72	12.48
49	9.27	11.30	11.75	12.51
50	9.28	11.35	11.77	12.54
51	9.35	11.39	11.80	12.57
52	9.39	11.47	11.82	12.60
53	9.40	11.50	11.83	12.63
54	9.44	11.52	11.86	12.66
55	9.48	11.54	11.89	12.69
56	9.52	11.56	11.91	12.72
57	9.57	11.56	11.91	12.75
58	9.60	11.58	11.93	12.78
59	9.63	11.59	11.95	12.81
60	9.68	11.60	11.95	12.84
61	9.72	11.61	11.97	12.87
62	9.75	11.62	12.01	12.90
63	9.78	11.62	12.06	12.93
64	9.82	11.62	12.09	12.96
65	9.85	11.64	12.13	12.99
66	9.90	11.64	12.18	13.02
67	9.94	11.65	12.23	13.05
68	9.94	11.65	12.25	13.08
69	9.99	11.65	12.30	13.11
70	10.02	11.65	12.34	13.14
Oversized	25.99	26.31	27.00	28.05

3.4 Bound Printed Matter Return Services—Return BMC

Weight not over (pounds)	Zones 1 & 2	Zone 3	Zone 4	Zone 5
1.0	$1.63	$1.68	$1.72	$1.80
1.5	1.63	1.68	1.72	1.80
2.0	1.70	1.76	1.82	1.92
2.5	1.77	1.85	1.92	2.05
3.0	1.84	1.93	2.02	2.17
3.5	1.91	2.02	2.12	2.30
4.0	1.98	2.10	2.22	2.42
4.5	2.05	2.19	2.32	2.55
5.0	2.12	2.27	2.42	2.67
6.0	2.26	2.44	2.62	2.92
7.0	2.40	2.61	2.82	3.17
8.0	2.54	2.78	3.02	3.42
9.0	2.68	2.95	3.22	3.67
10.0	2.82	3.12	3.42	3.92
11.0	2.96	3.29	3.62	4.17
12.0	3.10	3.46	3.82	4.42
13.0	3.24	3.63	4.02	4.67
14.0	3.38	3.80	4.22	4.92
15.0	3.52	3.97	4.42	5.17

4.0 LABEL FORMAT

4.1 Label Preparation

PRS labels must be certified for use by the Postal Service prior to distribution. In addition, permit holders must obtain Postal Service certification for barcode symbologies. Any photographic, mechanical, or electronic process or any combination of such processes may be used to produce PRS labels. The background of the label may be any light color that allows the address, barcodes, and other required information to be easily distinguished. If labels are electronically transmitted to customers for their local printing, the permit holder must advise customers of these printing requirements as part of the instructions in 4.3.

4.2 Labeling Methods

If all applicable content and format standards are approved (including instructions to the user), a PRS label may be distributed by any of the following methods:

a. As an enclosure with merchandise when initially shipped, as part of the original invoice accompanying the merchandise, or as a separate label preprinted by the permit holder. If the reverse side of the label bears an adhesive, it must be strong enough to bond the label securely to the mailpiece.

b. As an electronic file created by the permit holder for local output and printing by the customer.

4.3 Instructions

Regardless of label distribution method, written instructions always must be provided to the user of the PRS label that, at a minimum, direct the user to do the following:

a. “If your name and address are not already printed in the return address area, please print them neatly in that area or attach a return address label there.”

b. “Attach the label provided by the merchant squarely onto the largest side of the mailpiece, unless you need to use another side to make the parcel more stable. Place the label at least 1 inch from the edge of the parcel, so that it does not fold over to another side. If you are using tape to attach the new label, do not put tape over any barcodes on the label, even if the tape is clear, because the reflection interferes with barcode readers.”

c. “If you are reusing the original container to return the merchandise, use the label to cover your original delivery address and the barcodes and any other postal information on it. If it is not possible to cover all that information with the label, either remove old labels containing these items, mark them out completely with a permanent marker, or cover them completely with blank labels or paper that cannot be seen through. If that cannot be done, or if the original container is no longer sound, please use a new box to return the merchandise and attach the return label to that new box.”

d. “Once repackaged and labeled, you can mail the parcel at a post office, deposit it in a collection box, or give it to the carrier at the original delivery address. If the parcel is addressed to Return Delivery Unit, mail it at a local post office near the original delivery address. If the parcel is addressed to Return Bulk Mail Center, you can mail it at any post office or collection box in the town, city, or metropolitan area of the original delivery address.”

4.4 Label Format Elements

There is no minimum size for PRS labels; however, the label must be of a sufficient size to accommodate all label elements and standards in this section. All PRS label elements must be legible. Except where a specific type size is required, elements must be of a type size large enough to be legible from a normal reading distance and to separate them from other elements on the label. Examples of PRS label formats are shown in Exhibits 4.4a, 4.4b, 4.4c, and 4.4d. The following elements are required:

a. Postage Guarantee. The imprint “No Postage Necessary if Mailed in the United States” must appear in the upper right corner.

b. Horizontal Bars. A minimum of three horizontal bars must appear directly below the imprint in the upper right corner. The bars must be uniform in length, at least 1 inch long, 1/16 inch thick, and evenly spaced.

c. Parcel Return Service Legend. The legend must be placed directly above the address and include:

(1) Line 1: In capital letters at least 3/16 inch high, PARCEL SELECT RETURN SERVICE or BOUND PRINTED MATTER RETURN SERVICE, as appropriate. Bound Printed Matter may be abbreviated BPM.

(2) Line 2: In all capital letters, Permit holder's name, left justified, followed by PERMIT NO., followed by the permit number.

d. Customer's return address. The return address of the customer using the label to mail the parcel back to the permit holder must appear in the upper left corner. If it is not preprinted by the permit holder or merchant, space must be provided for the customer to enter the return address.

e. Address. The address must be the physical location of the return facility, as shown in the Drop Ship Product. The address must consist of at least three lines. If needed, the ZIP Code may appear left-justified on the line directly below the city and state line.

(1) Line 1: In all capital letters RETURN DELIVERY UNIT, or RETURN BULK MAIL CENTER, as appropriate. Center may be abbreviated CTR.

(2) Line 2: Street address, including number.

(3) Line 3: City, state, and ZIP Code.

f. Parcel Return Service Barcode. A PRS barcode must be printed directly on the label. The barcode may appear in any location on the label, except the upper left, upper right, and lower right corners. The barcode must meet the standards for barcodes in Publication 91, with the following exceptions:

(1) The barcode must be produced using the UCC/EAN Code 128 barcode symbology.

(2) The service type code (STC) contained in the barcode must identify the rate associated with the label destination. For labels addressed to a return delivery unit, the STC must be 58. For labels addressed to a return bulk mail center, the STC must be 57.

(3) Human-readable text above the barcode must read USPS PARCEL RETURN SERVICE. If the barcode is a single concatenated barcode with the postal routing code described in 4.4g, the text above the barcode must read BMC ZIP—USPS PARCEL RETURN SERVICE.

(4) The clear zone between the barcode, human-readable text, and the horizontal bar above and below the barcode must be at least 1/16 inch.

g. Postal Routing Barcode. If a single concatenated barcode is not used for the PRS Barcode, a postal routing barcode also must be printed directly on the label. The barcode may appear in any location on the label, except the upper left, upper right, and lower right corners. Postal routing barcodes must meet the standards in C850, with the following exceptions:

(1) The barcode symbology must be produced using the UCC/EAN Code 128 barcode symbology.

(2) The human-readable text below the barcode must read BMC ZIP—followed by the 5-digit ZIP Code for the BMC facility. The ZIP Code must be the correct ZIP Code for the RBMC as provided by the Postal Service. For RDU-addressed labels, the RBMC that services the location of the RDU must be used as the BMC 5-digit ZIP Code in the postal routing barcode.

h. Mailer Identification (ID). An individual mailer ID must appear in the lower right corner. The mailer ID is assigned by the permit holder to each individual client (merchant) of the permit holder. The mailer ID must consist of a single, uppercase alpha character followed by a two-digit number, with no spaces or dashes (e.g., A01) . The mailer ID must be at least 3/16 inch high and surrounded by a border (box) , with a clearance of at least3/16 inch between the mailer ID characters and the border. The mailer ID may be reverse-printed.

i. Additional Information. Additional information (e.g., company logo, return authorization number, inventory barcode) is permitted on the PRS label if it does not interfere with any required format elements. Inventory barcodes must not resemble barcodes described in C850.

We will publish an appropriate amendment to 39 CFR to reflect these changes.

Stanley F. Mires,

Chief Counsel, Legislative.

Footnotes

1.  Designated delivery units are those that currently offer extended hours for entry of Parcel Select-DDU parcels, and represent approximately 6,500 of the largest offices. This limit will allow the Postal Service to better manage and evaluate the experiment. Delivery unit information can be obtained from the Drop Ship Product, which provides information to customers who deliver their Package Services mailings to BMCs and DDUs. The Drop Ship Address portion of the product contains USPS facility address and telephone information. The Drop Ship Product is available by subscription from the National Customer Support Center (NCSC), Memphis, TN.