01-21714. Domestic Mail Manual Changes To Allow Co-Packaging of Automation Rate and Presorted Rate Flats

AGENCY:

Postal Service.

ACTION:

Proposed rule.

SUMMARY:

This proposed rule provides a new preparation option that will allow mailers to place flat-size automation rate First-Class Mail, Periodicals, or Standard Mail together in packages with corresponding flat-size Presorted rate First-Class Mail, Periodicals, or Standard Mail. This new option will be called “co-packaging.”

DATES:

Comments must be received on or before September 27, 2001.

ADDRESSES:

Send written comments to the Manager, Mail Preparation and Standards, U.S. Postal Service, 1735 North Lynn Street, Room 3025, Arlington VA 22209-6038. Written comments may be submitted via fax to 703-292-4058. Copies of all written comments will be available for inspection and photocopying between 9 a.m. and 4 p.m., Monday through Friday, in Room 3025 at the above address.

FOR FURTHER INFORMATION CONTACT:

Jane Stefaniak, 703-292-3548; or Cheryl Beller, 202-268-5166.

SUPPLEMENTARY INFORMATION:

On January 7, 2001, the Postal Service adopted new preparation standards in Domestic Mail Manual (DMM) M910 that required mailers of Periodicals nonletters, and permitted mailers of First-Class Mail and Standard Mail flats, to co-sack (Periodicals and Standard Mail) or co-tray (First-Class Mail) packages of automation rate mail with packages of Presorted rate mail. Under a separately published rule dated May 24, 2001 (66 FR 28659), the Postal Service will require co-traying for First-Class Mail flats and co-sacking for Standard Mail flats effective September 1, 2001.

At this time, the Postal Service is proposing to add a further preparation option, to be named co-packaging, that will allow the combining of flat-sized automation rate pieces and flat-sized Presorted rate pieces within the same package. Most of the same operational justifications for allowing packages of automation rate and Presorted rate flats to be combined in the same container (co-sacking and co-traying) also support allowing these flats to be combined within the same package (co-packaging). Currently, automation rate flats (ZIP+4 or delivery point barcoded) and Presorted rate flats (no barcode required) are usually processed within the same operation.

The Postal Service's prior need for segregating barcoded and nonbarcoded pieces no longer exists due to advances that include an optical character reader (OCR) on the flat sorting machine (FSM) 881 and the OCR/image lift capabilities of the new automated flat sorting machine (AFSM) 100. Beginning in 2002, the Postal Service plans to retrofit FSM 1000s with OCR capabilities. Therefore, continuing to require the separate preparation of automation rate and Presorted rate pieces results in more packages, which reduces the average depth of sort. This causes additional workhours for the Postal Service associated with sorting, opening, and prepping flats for processing.

As part of this notice, the Postal Service is proposing to allow co-packaging of flat-size automation rate pieces and Presorted rate pieces within a mailing job only if all Presorted rate pieces bear a 5-digit barcode. When mailers produce both automation rate and Presorted rate pieces, a vast majority of the pieces usually fall within the automation rate category for a mailing job. Pieces falling into the Presorted rate category are often the result of an unsuccessful address match. This generally results from either an incomplete address (e.g., no directional) or a new address that has yet to appear in the address database used by the mailer.

Requiring a 5-digit barcode on co-packaged Presorted rate pieces will serve two purposes. First, it will allow the Postal Service to differentiate between those Presorted rate pieces that a mailer attempted unsuccessfully to barcode to the ZIP+4 or delivery point level and those Presorted rate pieces on which an attempt was never made. The latter are much more likely to be matched by the Postal Service's address database; consequently, the 5-digit barcode would be useful from a quality control perspective. Second, the 5-digit barcode can be used by the Postal Service to sort the pieces in primary processing operations (5-digit sort). Postal statistics show that barcoded flats sort at a higher rate than nonbarcoded flats in primary processing operations, even when the sorting equipment has barcode reader and OCR capabilities, because the barcode can help the FSM locate the address block. As information, pieces without a 5-digit barcode must continue to be prepared as separate mailings, but they could be co-trayed or co-sacked under M910.

Under this proposal, the current minimum volume requirements for automation rate and Presorted rate mailings would continue to apply separately for First-Class Mail and Standard Mail (e.g., a minimum volume of 500 automation rate and 500 Presorted rate First-Class Mail pieces would be required). The total of all automation rate and Presorted rate pieces could be used to jointly meet package and container minimums. Mailers would be permitted to co-package Presorted rate pieces containing a 5-digit barcode with automation rate pieces containing a ZIP+4 or delivery point barcode for the same presort destination. However, the Postal Service is proposing that when more than one physical package is prepared for a “logical” presort destination, mailers combine Presorted rate pieces and automation rate pieces in no more than one physical package (see proposed DMM M950.1.1g, M950.2.1h, and M950.3.1h). (Note: A “logical” presort destination represents the total number of pieces that are eligible for a specific presort level based on the required sortation, but which might not necessarily be contained in a single container, such as a package, sack, or pallet due to the applicable preparation requirements.) As an example, if nine Presorted rate Periodicals pieces (each containing a 5-digit barcode) are sorted to the same 3-digit ZIP Code destination as 19 automation rate pieces (each containing a ZIP+4 barcode), the following physical packages might be prepared: one package containing eight Presorted rate pieces; one package containing one Presorted rate piece and seven automation rate pieces; and one package containing 12 automation rate pieces.

The proposal to limit the co-packaging of automation rate and Presorted rate pieces to one physical package for each “logical” presort destination is needed to assist the Postal Service during mail verification and acceptance processes. The Postal Service is seeking comments from mailers and presort software developers regarding the ability of software to sequence mailpieces for a package presort destination in such a manner that all of the automation rate pieces are grouped together and all of the Presorted rate pieces are grouped together, resulting in only one physical package that contains both automation rate and Presorted rate pieces.

For Periodicals, if a Presorted rate mailing includes firm packages, these packages must be accompanied by (but must be physically separate from) the automation rate and/or other Presorted rate pieces to the same presort destination to satisfy a six-piece package requirement when applicable for rate eligibility, regardless of the number of copies in the firm package.

For Periodicals or Standard Mail mailings that are co-packaged and prepared under the optional preparation methods for merged pallets in DMM M930 or M940, new standards are proposed to allow a portion of a logical package to be placed on a merged pallet under the 5 percent limit. Comments are also requested from software developers concerning the proposed method for determining how to select mail to be placed on merged pallets.

Documentation generated by Presort Accuracy, Validation, and Evaluation (PAVE)-certified software or standardized documentation (DMM P012) would be required for mailings prepared under this option. The documentation is required to indicate the total number of automation rate and Presorted rate pieces contained in each package. The proposed date that mailers may begin to use this preparation option is March 31, 2002. The Postal Service is considering mandatory use beginning on January 1, 2003, and is seeking comments regarding the required use of co-packaging. These dates should allow presort software vendors enough time to update, test, and distribute software to their clients. It also should afford the Postal Service sufficient time to develop PAVE certification criteria for this proposal and conduct PAVE certification testing. The Postal Service invites interested parties to comment on any or all parts of this proposed rule.

Although exempt from the notice and comment requirements of the Administrative Procedures Act (5 U.S.C. 553(b), (c)) regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites comments on the following proposed revisions of the DMM, incorporated by reference into the Code of Federal Regulations (see 39 CFR part 111).

List of Subjects in 39 CFR Part 111

• Postal Service

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. Amend the following sections of the Domestic Mail Manual (DMM) as set forth below:

M MAIL PREPARATION AND SORTATION

M000 General Preparation Standards

M010 Mailpieces

M011 Basic Standards

1.0 TERMS AND CONDITIONS

* * * * *

1.3 Preparation Instructions

For purposes of preparing mail:

* * * * *

[Insert new 1.3ad and ae, as follows:]

ad. A “logical” presort destination represents the total number of pieces that are eligible for a specific presort level based on the required sortation, but which might not be contained in a single package or in a single container (i.e., sack, pallet) due to applicable preparation requirements or the size of the individual pieces. For example, there may be 42 mailpieces for ZIP Code 43112 forming a Standard Mail “logical” 5-digit package, and they are prepared in three physical 5-digit packages because of the applicable weight and height restrictions on packages. For pallets, 2,800 pounds of mail may be destined to an SCF destination, and these would form the “logical” SCF pallet, but the mail is placed on two physical SCF pallets, each weighing 1,400 pounds, because of the 2,200 pound maximum pallet weight requirement.

ae. Co-packaging is an alternate preparation option available under M900 for First-Class Mail, Periodicals, and Standard Mail that allows the combining of flat-size automation rate and Presorted rate pieces within the same package under a single minimum package size requirement. Pieces may not be combined in more than one physical package for each logical presort destination.

1.4 Mailing

Mailings are defined as:

* * * * *

[Revise 1.4b, d, and e by adding references to the advanced preparation options for flat-sized mail in M910, M920, M930, M940, and M950 as follows (the remainder of 1.4 is unchanged):]

b. First-Class Mail. Except as provided by standard, the types of First-Class Mail listed below may not be part of the same mailing despite being in the same processing category. See M910 and M950 for advanced preparation options for flat-size mail. * * *

* * * * *

d. Periodicals. Mail qualifying for the In-County rates may be part of a mailing that includes pieces eligible for the Outside County rates. Mail at carrier route rates, nonautomation Presorted rates, and automation rates must each be sorted as separate mailings. However, each of these mailings may be reported on the same postage statement if the pieces are for the same publication and edition. See M041, M045, M210, and M220 for copalletized, combined, and mixed rate mailings. See M910, M920, M930, M940, and 950 for advanced preparation options for nonletter-size mail.

e. Standard Mail. Except as provided in E620.1.2 and M900, the types of Standard Mail listed below may not be part of the same mailing. See M041, M045, M610, and M620 for copalletized, combined, and mixed rate mailings. See M910, M920, M930, M940, and M950 for advanced preparation options for flat-size mail. * * *

* * * * *

M040 Pallets

* * * * *

M045 Palletized Mailings

* * * * *

2.0 PACKAGES ON PALLETS

* * * * *

[Revise 2.2 by adding a sentence at the end to refer to the co-packaging option for Periodicals nonletters and Standard Mail flats, as follows (the remainder of 2.2 is unchanged):]

2.2 Basic Packaging Standards

* * * If palletized mailing jobs of nonletter-size Periodicals or palletized mailing jobs of flat-size Standard Mail contain both automation rate and Presorted rate pieces, the automation rate and Presorted rate pieces may be co-packaged under the standards in M950.

* * * * *

M100 First-Class Mail (Nonautomation)

* * * * *

M130 Presorted First-Class Mail

1.0 BASIC STANDARDS

* * * * *

[Revise the title of 1.6 and add a new sentence at the end to refer to the co-packaging option in M950, as follows (the remainder of 1.6 is unchanged):]

1.6 Co-Traying and Co-Packaging With Automation Rate Mail

* * * Flat-size Presorted rate pieces may be co-packaged with flat-size automation rate pieces under the standards in M950.

* * * * *

M200 Periodicals (Nonautomation)

M210 Presorted Rates

1.0 BASIC STANDARDS

* * * * *

[Revise the title and text of 1.2a and b to refer to the new co-packaging option in M950, as follows (the remainder of 1.2 is unchanged):]

1.2 Additional Standards for Nonletter-Size Sacked Mailing Jobs Containing More Than One Mailing

The following standards apply:

a. Mailings prepared in sacks that are part of a mailing job that includes a carrier route mailing, an automation rate mailing, and a presorted rate mailing must be prepared under one of the following options: (1) the carrier route mailing must be prepared under E230 and M220 and the automation rate and Presorted rate mailing must be prepared under M910; or (2) all three mailings in the mailing job must be prepared under M920. Presorted rate pieces may be co-packaged with automation rate pieces under the standards in M950.

b. Mailings prepared in sacks that are part of a mailing job that includes an automation rate mailing under E240 and a Presorted rate mailing under E220 must be prepared under the co-sacking standards in M910. Presorted rate pieces may be co-packaged with automation rate pieces under the standards in M950.

* * * * *

[Revise 1.6 to show that merging is optional and to refer to the co-packaging option in M950, as follows:]

1.6 Merged Containerization of Nonletter-Size Carrier Route, Automation Rate, and Presorted Rate Mail

Under the optional preparation method in M920, Presorted rate firm and 5-digit packages prepared under 1.0 and under 2.2a and b must be co-sacked with firm and carrier route packages prepared under M220 and with automation rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit scheme sacks. Under the optional preparation methods in M920, M930, or M940, Presorted rate firm and 5-digit packages prepared under 1.0 and under 2.2a and b must be copalletized with firm and carrier route packages prepared under M220 and with automation rate 5-digit packages prepared under M820 on merged 5-digit and 5-digit scheme pallets. See 1.2a for information on when preparation under M920 may be required. Presorted rate pieces may be co-packaged with automation rate pieces under M950.

* * * * *

M220 Carrier Route Rates

1.0 BASIC INFORMATION

* * * * *

[Revise 1.6 to show that merging is optional and to refer to the co-packaging option in M950, as follows:]

1.6 Merged Containerization of Nonletter-Size Carrier Route, Automation Rate, and Presorted Rate Mail

Under the optional preparation method in M920, firm and carrier route packages prepared under 1.0 and 2.4 must be co-sacked with Presorted rate 5-digit packages prepared under M210 and with automation rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit scheme sacks. For sacked mailing jobs that contain an automation rate and a Presorted rate mailing as well as a carrier route mailing, the automation rate and the Presorted rate mailings must be prepared under M910 (see M210) and the carrier route mailing must be prepared under M220, unless the mailings are prepared under M920. Under the optional preparation methods in M920, M930, or M940, firm and carrier route packages prepared under 1.0 and 2.4 must be copalletized with Presorted rate 5-digit packages prepared under M210 and with automation rate 5-digit packages prepared under M820 on merged 5-digit and 5-digit scheme pallets. Presorted rate pieces may be co-packaged with automation rate pieces under M950.

* * * * *

M600 Standard Mail (Nonautomation)

M610 Presorted Standard Mail

1.0 BASIC STANDARDS

* * * * *

[Revise the title of 1.5 and add a new sentence at the end to refer to the co-packaging option in M950, as follows (the remainder of 1.5 is unchanged):]

1.5 Co-Traying and Co-Packaging With Automation Rate Mail

* * * Flat-size Presorted rate pieces may be co-packaged with flat-size automation rate pieces under the standards in M950.

[Revise the title and text of 1.6 to refer to the new co-packaging option in M950, as follows:]

1.6 Merged Containerization of Flat-Size Carrier Route, Automation Rate, and Presorted Rate Mail

When the conditions and preparation standards in M920 are met, Presorted rate 5-digit packages prepared under 4.3a may be co-sacked with carrier route rate packages prepared under M620 and with automation rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit scheme sacks. When the conditions and preparation standards in M920, M930, or M940 are met, Presorted rate 5-digit packages prepared under 4.3a may be copalletized with carrier route rate packages prepared under M620 and with automation rate 5-digit packages prepared under M820 on merged 5-digit and 5-digit scheme pallets. Presorted rate pieces may be co-packaged with automation rate pieces under M950.

* * * * *

M620 Enhanced Carrier Route Standard Mail

1.0 BASIC STANDARDS

* * * * *

[Revise the title and text of 1.6 to refer to the co-packaging option in M950, as follows:]

1.6 Merged Containerization of Flat-Size Carrier Route, Automation Rate, and Presorted Rate Mail

When the conditions and preparation standards in M920 are met, carrier route rate packages prepared under 2.0 may be co-sacked with Presorted rate 5-digit packages prepared under M610 and with automation rate 5-digit packages prepared under M820 in merged 5-digit and 5-digit scheme sacks. When the conditions and preparation standards in M920, M930, or M940 are met, carrier route rate packages prepared under 2.0 may be copalletized with Presorted rate 5-digit packages prepared under M610 and with automation rate 5-digit packages prepared under M820 on merged 5-digit and 5-digit scheme pallets. Presorted rate pieces may be co-packaged with automation rate pieces under M950.

* * * * *

M800 All Automation Mail

* * * * *

M820 Flat-Size Mail

1.0 BASIC STANDARDS

* * * * *

[Revise the title of 1.9 and add a new sentence at the end to refer to the co-packaging option in M950, as follows (the remainder of 1.9 is unchanged):]

1.9 Co-Traying, Co-sacking and Co-Packaging With Presorted Rate Mail

* * * Automation rate pieces may be co-packaged with Presorted rate pieces under the standards in M950.

[Revise the title and text of 1.10 to be consistent with M210.1.6 and M610.1.6 to refer to the options for merged containerization and co-packaging, as follows:]

1.10 Merged Containerization of Flat-size Carrier Route, Automation Rate, and Presorted Rate Mail

Under the optional preparation methods in M920, 5-digit packages of Periodicals or Standard Mail automation rate flats must be co-sacked with 5-digit packages of Periodicals Presorted rate nonletters or Standard Mail Presorted rate flats prepared under M210 or M610, as applicable, and with packages of Periodicals carrier route nonletters or Standard Mail carrier route flats in merged 5-digit and 5-digit scheme sacks. Under the optional preparation methods in M920, M930, or M940, 5-digit packages of Periodicals or Standard Mail automation rate flats must be copalletized with 5-digit packages of Periodicals Presorted rate nonletters or Standard Mail Presorted rate flats prepared under M210 or M610, as applicable, and with packages of Periodicals carrier route nonletters or Standard Mail carrier route flats on merged 5-digit and 5-digit scheme pallets. Presorted rate nonletter-size Periodicals pieces or Presorted rate flat-size Standard Mail pieces may be co-packaged with flat-size automation rate pieces under M950.

* * * * *

M900 Advanced Preparation Options for Flats

M910 Co-Traying and Co-Sacking Packages of Automation and Presorted Mailings

1.0 FIRST-CLASS MAIL

1.1 Basic Standards

[Revise 1.1c, d, and g by changing the reference to tray preparation standards from “1.3” to “1.4” (the remainder of 1.1 is unchanged).]

* * * * *

[Revise 1.2 to refer to the co-packaging option in 1.3, as follows:]

1.2 Package Preparation

Except for mail prepared under the co-packaging option in 1.3, the automation rate mailing must be packaged and labeled under M820 and the Presorted rate mailing must be packaged and labeled under M130.

[Renumber current 1.3 as 1.4 and insert new 1.3, as follows:]

1.3 Optional Co-Packaging Preparation

As an option to the basic packaging requirements in 1.2, a mailer may choose to co-package (see M011) automation rate and Presorted rate flat-size pieces, subject to the conditions in M950.

[Revise the first sentence of the renumbered 1.4 to refer to the co-packaging option in 1.3, as follows (the remainder of 1.4 is unchanged):]

1.4 Tray Preparation and Labeling

Presorted rate and automation rate packages prepared under 1.2 or 1.3 must be presorted together into trays (co-trayed) in the sequence listed below. * * *

* * * * *

2.0 PERIODICALS

2.1 Basic Standards

[Revise 2.1c, d, and f by changing the reference to sack preparation standards from “2.4” to “2.5” (the remainder of 2.1 is unchanged).]

* * * * *

[Revise 2.2 to refer to the co-packaging option in 2.3, as follows:]

2.2 Package Preparation

Except for mail prepared under the co-packaging option in 2.3, the automation rate mailing must be packaged and labeled under M820 (all package levels) and the Presorted rate mailing must be packaged and labeled under M210 (excluding carrier route level).

[Renumber current 2.3 and 2.4 as 2.4 and 2.5, respectively, and insert new 2.3 as follows:]

2.3 Optional Co-Packaging Preparation

As an option to the basic packaging requirements in 2.2, a mailer may choose to co-package (see M011) automation rate and Presorted rate nonletter-size pieces, subject to the conditions in M950.

[Revise the renumbered 2.4 by adding references to packages prepared under the co-packaging option in 2.3, as follows:]

2.4 Low-Volume Packages in Sacks or on Pallets

Periodicals 5-digit and 3-digit packages prepared under M210 and M820 or under 2.3 may contain fewer than six pieces when the publisher determines that such preparation improves service. These low-volume packages may be placed in 5-digit, 3-digit, and SCF sacks or on 5-digit, 3-digit, or SCF pallets. Presorted rate pieces in such low-volume packages must be claimed at the applicable basic Presorted rate. Automation rate pieces in such low-volume packages must be claimed at the applicable basic automation rate.

[Revise the first sentence of the renumbered 2.5 to refer to the co-packaging option in 2.3, as follows (the remainder of 2.5 is unchanged):]

2.5 Sack Preparation and Labeling

Presorted rate and automation rate packages prepared under 2.2 and 2.4 must be presorted together in sacks (co-sacked) in the sequence listed below. * * *

3.0 STANDARD MAIL

3.1 Basic Standards

[Revise 3.1c, d, and g by changing the references to sack preparation standards from “3.3 and 3.4” to “3.4 and 3.5” (the remainder of 3.1 is unchanged).]

* * * * *

[Revise 3.2 to refer to the co-packaging option in 3.3, as follows:]

3.2 Package Preparation

Except for mail prepared under the co-packaging option in 3.3, the automation rate mailing must be packaged and labeled under M820 and the Presorted rate mailing must be packaged and labeled under M610. Loose packing under M610 is not permitted.

[Renumber current 3.3 and 3.4 as 3.4 and 3.5, respectively, and insert new 3.3, as follows:]

3.3 Optional Co-Packaging Preparation

As an option to the basic packaging requirements in 3.2, a mailer may choose to co-package (see M011) automation rate and Presorted rate flat-size pieces, subject to the conditions in M950.

* * * * *

M920 Merged Containerization of Packages Using the City State Product

[Revise the summary in M920 to refer to the co-packaging option in M950, as follows:]

Summary: M920 describes the eligibility and preparation requirements for co-sacking or copalletizing 5-digit automation rate packages, 5-digit Presorted packages, including automation and Presorted rate pieces co-packaged under M950, and carrier route packages of Periodicals nonletter-size mailings and Standard Mail flat-size mailings in merged 5-digit and 5-digit scheme containers using the City State Product.

[Revise the heading of 1.0, as follows:]

1.0 PERIODICALS

[Revise the first sentence in 1.1 to refer to the co-packaging option in M950, as follows:]

1.1 Basic Standards

Carrier route packages in a carrier route rate mailing may be placed in the same sack or on the same pallet (in a merged 5-digit or 5-digit scheme sack or pallet) as 5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation and Presorted rate pieces co-packaged as permitted in M950, under the following conditions:

* * * * *

[Revise the first sentence in 1.1e to refer to the co-packaging option in M950, as follows (the remainder of 1.1e is unchanged):]

e. Carrier route packages must be co-sacked or copalletized with automation rate 5-digit packages and Presorted rate 5-digit packages, including automation and Presorted rate pieces co-packaged under M950, only for those 5-digit ZIP Codes that have an “A” or “C” indicator in the Carrier Route Indicators field in the City State Product showing they are eligible for co-sacking or copalletization. * * *

* * * * *

1.2 Package Preparation

Packages must be prepared as follows:

[Revise 1.2a to refer to the co-packaging option in M950, as follows:]

a. Sacked Mailings. The carrier route mailing must be packaged and labeled under M220. Except when prepared under the co-packaging option in M950, the automation rate mailing must be packaged and labeled under M820 and the Presorted rate mailing must be packaged and labeled under M210.

* * * * *

1.3 Low-Volume Packages in Sacks or on Pallets

[Revise 1.3 to refer to the co-packaging option by adding “or M950” after the reference to M820 in the first sentence (the remainder of 1.3 is unchanged).]

* * * * *

2.0 STANDARD MAIL

[Revise the first sentence in 2.1 to refer to the co-packaging option in M950, as follows:]

2.1 Basic Standards

Carrier route packages of flat-size pieces in a carrier route rate mailing may be placed in the same sack or on the same pallet (a merged 5-digit or 5-digit scheme sack or pallet) as 5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation and Presorted rate pieces co-packaged as permitted in M950, under the following conditions:

* * * * *

[Revise the first sentence in 2.1e to refer to the co-packaging option in M950, as follows (the remainder of 2.1e is unchanged):]

e. Carrier route rate packages must be co-sacked or copalletized with automation rate 5-digit packages and Presorted rate 5-digit packages, including automation and Presorted rate pieces co-packaged under M950, only for those 5-digit ZIP Codes with an “A” or “C” indicator in the Carrier Route Indicators field in the City State Product indicating they are eligible for such co-sacking or copalletization. * * *

* * * * *

2.2 Package Preparation

Packages must be prepared as follows:

[Revise 2.2a to refer to the co-packaging option in M95, as follows:]

a. Sacked Mailings. The carrier route mailing must be packaged and labeled under M620. Except when prepared under the co-packaging option in M950, the automation rate mailing must be packaged and labeled under M820 and the Presorted rate mailing must be packaged and labeled under M610.

* * * * *

M930 Merged Palletization of Packages Using a 5% Threshold

[Revise the summary in M930 to refer to the co-packaging option in M950, as follows:]

Summary: M930 describes the eligibility and preparation requirements for copalletizing 5-digit automation rate packages; 5-digit Presorted rate packages, including automation and Presorted rate pieces co-packaged under M950; and carrier route rate packages of Periodicals nonletter-size mailings and Standard Mail flat-size mailings in merged 5-digit and 5-digit scheme pallets using only the 5% threshold (not the City State Product).

[Revise the heading of 1.0, as follows:]

1.0 PERIODICALS

[Revise the heading and first sentence of 1.1 to refer to the co-packaging option in M950, as follows:]

1.1 Basic Standards

5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation and Presorted rate pieces co-packaged under M950, may be placed on the same pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route rate packages from a carrier route mailing under the following conditions:

* * * * *

[Revise the first sentence of 1.1d to refer to the co-packaging option in M950, as follows (the remainder of 1.1d is unchanged):]

d. Automation rate 5-digit packages and Presorted rate 5-digit packages, including automation rate and Presorted rate pieces co-packaged under M950, must be copalletized with carrier route rate packages only when the pieces in the 5-digit packages do not exceed the 5% limit described in 1.4.* * *

* * * * *

1.3 Low-Volume Packages on Pallets

[Revise 1.3 to refer to the co-packaging option by adding “or M950” after the reference to M820 in the first sentence (the remainder of 1.3 is unchanged).]

* * * * *

[Revise the first sentence of 1.4, as follows:]

1.4 5% Threshold Standard

5-digit packages and carrier route packages may be placed on the same merged 5-digit or 5-digit scheme pallet under 1.5 if all of the following conditions are met:

* * * * *

[Revise 1.4c by replacing the first sentence with the following new sentence; then delete the last four sentences beginning with the word “Example” (the remainder of 1.4c is unchanged):]

c. Except when packages are prepared under the co-packaging option in M950, all mail in a logical 5-digit package must be able to be placed on the logical pallet using the 5% limit.* * *

[Insert the following clause at the beginning of 1.4d (the remainder of 1.4d is unchanged):]

d. Except for packages prepared under the co-packaging option in M950,* * *

[Insert new 1.4e to permit mailers using the co-packaging option in M950 to place a portion of a “logical” 5-digit package on a merged 5-digit scheme or merged 5-digit pallet with carrier route mail; renumber current 1.4e and f as 1.4f and g, respectively; and change the references in renumbered 1.4f and g from “1.4a through 1.4d” to “1.4a through 1.4e,” as follows:]

e. For mailing jobs prepared using the co-packaging option in M950, if the total number of pieces prepared in a logical 5-digit package (containing automation rate and Presorted rate pieces) exceeds the 5% limit for a 5-digit ZIP Code in 1.4a, a mailer may, for each 5-digit ZIP Code, choose to place a portion of the pieces prepared in the logical 5-digit package on a merged 5-digit or 5-digit scheme pallet using one of the options below. Regardless of the option selected, a minimum of six pieces must be prepared in 5-digit package(s) placed on the merged pallet and a minimum of six remaining pieces prepared in 5-digit package(s) not placed on the merged pallet, with the total number of pieces not exceeding the 5% limit. The options are:

(1) Place either all automation rate pieces or all Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(2) Place a portion of either the automation rate pieces or the Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(3) Place either all the automation rate pieces plus a portion of the Presorted rate pieces or all the Presorted rate pieces plus a portion of the automation rate pieces for the 5-digit ZIP Code on the merged pallet.

* * * * *

2.0 STANDARD MAIL

[Revise the first sentence in 2.1 to refer to the co-packaging option in M950, as follows:]

2.1 Basic Standards

5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation rate and Presorted rate pieces co-packaged under M950, may be placed on the same pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route rate packages from a carrier route rate mailing under the following conditions:

* * * * *

[Revise the first sentence in 2.1d to refer to the co-packaging option in M950, as follows (the remainder of 2.1d is unchanged):]

d. Automation rate 5-digit packages and Presorted rate 5-digit packages, including automation and Presorted rate pieces co-packaged under M950, must be copalletized with carrier route packages only when the pieces in the 5-digit packages do not exceed the 5% limit in 2.3 .* * *

* * * * *

[Revise the first sentence of 2.3, as follows:]

2.3 5% Threshold Standard

5-digit packages and carrier route packages may be placed on the same merged 5-digit pallet under 2.4 or on the same merged 5-digit or 5-digit scheme pallet under 2.5 if all of the following conditions are met:

* * * * *

[Revise the first sentence in 2.3c as follows; then delete the last four sentences beginning with the word “Example” (the remainder of 2.3c is unchanged):]

c. Except when packages are prepared under the co-packaging option in M950, all mail in a logical 5-digit package must be able to be placed on the logical pallet using the 5% limit. * * *

[Revise 2.3d by inserting the following clause at the beginning (the remainder of 2.3d is unchanged):]

d. Except for packages prepared under the co-packaging option in M950, * * *

[Insert new 2.3e to permit mailers using the co-packaging option in M950 to place a portion of a logical 5-digit package on a merged 5-digit scheme or merged 5-digit pallet with carrier route mail, as follows:]

e. For mailing jobs prepared using the co-packaging option in M950, if the total number of pieces prepared in a logical 5-digit package (containing automation rate and Presorted rate pieces) exceeds the 5% limit for a 5-digit ZIP Code in 2.3a, a mailer may, for each 5-digit ZIP Code, choose to place a portion of the pieces prepared in the logical 5-digit package on a merged 5-digit or 5-digit scheme pallet using one of the options below. Regardless of the option selected, a minimum of 10 pieces must be prepared in 5-digit package(s) placed on the merged pallet and a minimum of 10 remaining pieces prepared in 5-digit package(s) not placed on the merged pallet, with the total number of pieces not exceeding the 5% limit. The options are:

(1) Place either all automation rate pieces or all Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(2) Place a portion of either the automation rate pieces or the Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(3) Place either all the automation rate pieces plus a portion of the Presorted rate pieces or all the Presorted rate pieces plus a portion of the automation rate pieces for the 5-digit ZIP Code on the merged pallet.

* * * * *

M940 Merged Palletization of Packages Using the City State Product and a 5% Threshold

[Revise the summary in M940 to refer to the co-packaging option in M950 and 3.3, as follows:]

Summary: M940 describes the eligibility and preparation requirements for copalletizing 5-digit automation rate packages; 5-digit Presorted rate packages, including automation rate and Presorted rate pieces co-packaged under M950; and carrier route packages of Periodicals nonletter-size mailings and Standard Mail flat-size mailings in merged 5-digit scheme and merged 5-digit pallets using both the City State Product and a 5% threshold, as applicable.

[Revise the title of 1.0, as follows:]

1.0 PERIODICALS

[Revise the first sentence of 1.1 to refer to the co-packaging option in M950, as follows:]

1.1 Basic Standards

5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation rate and Presorted rate pieces co-packaged under M950, may be placed on the same pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route packages from a carrier route rate mailing under the following conditions:

* * * * *

[Revise the first sentence in 1.1e to refer to the co-packaging option in M950, as follows (the remainder of 1.1e is unchanged):]

e. Automation rate 5-digit packages and Presorted rate 5-digit packages, including automation rate and Presorted rate pieces co-packaged under M950, must be copalletized with carrier route packages on merged 5-digit and 5-digit scheme pallets as follows:

* * * * *

1.3 Low-Volume Packages on Pallets

[Revise 1.3 to refer to the co-packaging option by adding “or M950” after the reference to M820 in the first sentence (the remainder of 1.3 is unchanged).]

* * * * *

[Revise the first sentence of 1.4, as follows:]

1.4 5% Threshold Standard

5-digit packages and carrier route packages for 5-digit ZIP Codes with a “B” or “D” indicator in the City State Product may be placed on the same merged 5-digit or 5-digit scheme pallet under 1.5 if all of the following conditions are met:

* * * * *

[Revise the first sentence of 1.4c, as follows, then delete the last four sentences beginning with the word “Example” (the remainder of 1.4c is unchanged):]

c. Except when packages are prepared under the co-packaging option in M950, all mail in a logical 5-digit package for a 5-digit ZIP Code with a “B” or “D” indicator must be able to be placed on the logical pallet under the 5% limit. * * *

[Insert the following clause at the beginning of 1.4d (the remainder of 1.4d is unchanged):]

d. Except for packages prepared under the co-packaging option in M950, * * *

[Insert new 1.4e to permit mailers using the co-packaging option in M950 to place a portion of a logical 5-digit package on a merged 5-digit scheme or merged 5-digit pallet with carrier route mail; renumber current 1.4e and f as 1.4f and g, respectively; and change the references in renumbered 1.4f and g from “1.4a through 1.4d” to “1.4a through 1.4e,” as follows:]

e. For mailing jobs prepared using the co-packaging option in M950, if the total number of pieces prepared in a logical 5-digit package (containing automation rate and Presorted rate pieces) exceeds the 5% limit for a 5-digit ZIP Code in 1.4a, a mailer may, for each 5-digit ZIP Code, choose to place a portion of the pieces prepared in the logical 5-digit package on a merged 5-digit or 5-digit scheme pallet using one of the options below. Regardless of the option selected, a minimum of six pieces must be prepared in 5-digit package(s) placed on the merged pallet and a minimum of six remaining pieces prepared in 5-digit package(s) not placed on the merged pallet, with the total number of pieces not exceeding the 5% limit. The options are:

(1) Place either all automation rate pieces or all Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(2) Place a portion of either the automation rate pieces or the Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(3) Place either all the automation rate pieces plus a portion of the Presorted rate mail or all the Presorted rate pieces plus a portion of the automation rate pieces for the 5-digit ZIP Code on the merged pallet.

* * * * *

2.0 STANDARD MAIL

[Revise the first sentence in 2.1 to refer to the co-packaging option in M950, as follows:]

2.1 Basic Standards

5-digit packages from an automation rate mailing and 5-digit packages from a Presorted rate mailing, including automation and Presorted rate pieces co-packaged under M950, may be placed on the same pallet (a merged 5-digit or 5-digit scheme pallet) as carrier route packages from a carrier route rate mailing under the following conditions:

* * * * *

[Revise the first sentence of 2.1e to refer to the co-packaging option in M950, as follows (the remainder of 2.1e is unchanged):]

e. Automation rate 5-digit packages and Presorted rate 5-digit packages, including automation rate and Presorted rate pieces co-packaged under M950, must be copalletized with carrier route packages on merged 5-digit scheme and merged 5-digit pallets as follows:

* * * * *

[Revise the first sentence of 2.3, as follows:]

2.3 Threshold Standard

5-digit packages and carrier route packages for 5-digit ZIP Codes with a “B” or “D” indicator in the City State Product may be placed on the same merged 5-digit pallet under 2.4 or on the same merged 5-digit or 5-digit scheme pallet under 2.5 if all of the following conditions are met:

* * * * *

[Revise the first sentence of 2.3c, as follows (the remainder of 2.3c is unchanged):]

c. Except when packages are prepared under the co-packaging option in M950, all mail in a logical 5-digit package must be able to be placed on the logical pallet using the 5% limit.* * *

[Insert the following clause at the beginning of 2.3d (the remainder of 2.3d is unchanged):]

d. Except for packages prepared under the co-packaging option in M950,* * *

[Insert new 2.3e to permit mailers using the co-packaging option in M950 to place a portion of a logical 5-digit package on a merged 5-digit scheme or merged 5-digit pallet with carrier route mail, as follows:]

e. For mailing jobs prepared using the co-packaging option in M950, if the total number of pieces prepared in a logical 5-digit package (containing automation rate and Presorted rate pieces) exceeds the 5% limit for a 5-digit ZIP Code in 2.3a, a mailer may, for each 5-digit ZIP Code, choose to place a portion of the pieces prepared in the logical 5-digit package on a merged 5-digit or 5-digit scheme pallet using one of the options below. Regardless of the option selected, a minimum of 10 pieces must be prepared in 5-digit package(s) placed on the merged pallet and a minimum of 10 remaining pieces prepared in 5-digit package(s) not placed on the merged pallet, with the total number of pieces not exceeding the 5% limit. The options are:

(1)Place either all automation rate pieces or all Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(2)Place a portion of either the automation rate pieces or the Presorted rate pieces for the 5-digit ZIP Code on the merged pallet.

(3)Place either all the automation rate pieces plus a portion of the Presorted rate pieces or all the Presorted rate pieces plus a portion of the automation rate pieces for the 5-digit ZIP Code on the merged pallet.

* * * * *

[Add new section M950 to provide requirements for co-packaging of automation rate and Presorted rate First-Class Mail, Periodicals, and Standard Mail, to read as follows:]

M950 Co-Packaging Automation Rate and Presorted Rate Pieces Summary

M950 describes the eligibility and preparation requirements for co-packaging flat-size automation rate and Presorted rate First-Class Mail, nonletter-size automation and Presorted rate Periodicals, and flat-size automation rate and Presorted rate Standard Mail.

1.0 FIRST-CLASS MAIL

1.1 Basic Standards

As an option to the basic packaging requirements in M910, a mailer may choose to co-package (see M011) automation rate and Presorted rate pieces, subject to the following conditions:

a. The pieces in the automation rate mailing and the Presorted rate mailing must be part of the same mailing job and must be reported on the appropriate postage statement(s).

b. The pieces in the mailing job must be flat size and meet any other size and mailpiece design requirements applicable to the rate category for which they are prepared.

c. The basic standards in M910 must be met.

d. A minimum of 500 automation rate pieces and 500 Presorted rate pieces are required. The total number of automation rate and Presorted rate pieces must be used to meet the minimum volume requirements for packages and containers to a presort destination.

e. Presorted rate pieces must contain a 5-digit barcode and be co-packaged with automation rate pieces for the same presort destination. If this optional preparation method is used, all automation rate and Presorted rate pieces in the same mailing job and reported on the same postage statement must be co-packaged.

f. Within a package, all pieces must meet the FSM 881 requirements or all pieces must meet the FSM 1000 requirements described in C820.

g. Mailers must sort automation rate pieces and Presorted rate pieces for each presort destination so that only one physical package for each logical presort destination (see M011) includes both automation rate pieces (containing a ZIP+4 or delivery point barcode) and Presorted rate pieces (containing a 5-digit barcode).

1.2 Package Preparation

Package size, preparation sequence, and labeling:

a. 5-digit: required (10-piece minimum, fewer not permitted); red Label D or optional endorsement line (OEL).

b. 3-digit: required (10-piece minimum, fewer not permitted); green Label 3 or OEL.

c. ADC: required (10-piece minimum, fewer not permitted); pink Label A or OEL.

d. Mixed ADC: required (no minimum); tan Label MXD or OEL.

2.0 PERIODICALS

2.1 Basic Standards

As an option to the basic packaging requirements in M210 and M820, a mailer may choose to co-package (see M011) automation rate and Presorted rate pieces, subject to the following conditions:

a. The pieces in the automation rate mailing and the Presorted rate mailing must be part of the same mailing job and must be reported on the appropriate postage statement(s).

b. The pieces in the mailing job must be nonletter-size and meet any other size and mailpiece design requirements applicable to the rate category for which they are prepared.

c. Mailings prepared in sacks must meet the basic standards in M910 or M920.

d. Mailings prepared on pallets must meet the basic standards in M045, M920, M930, or M940.

e. The total number of automation rate and Presorted rate pieces must be used to meet the minimum volume requirements for packages and containers.

f. Presorted rate pieces must contain a 5-digit barcode and be co-packaged with automation rate pieces for the same presort destination. If this optional preparation method is used, all automation rate and Presorted rate pieces in the same mailing job and reported on the same postage statement must be co-packaged.

g. Within a package, all pieces must meet the FSM 881 requirements or all pieces must meet the FSM 1000 requirements described in C820.

h. Mailers must sort Presorted rate pieces and automation rate pieces for each presort destination so that only one physical package for each logical presort destination (see M011) includes both automation rate pieces (containing a ZIP+4 or delivery point barcode) and Presorted rate pieces (containing a 5-digit barcode).

2.2 Package Preparation

Package size, preparation sequence, and labeling:

a. Firm: optional (for Presorted rate pieces only under M210.1.4) (two-piece minimum); blue Label.

b. 5-digit: required (six-piece minimum, fewer not permitted except under 2.3); red Label D or optional endorsement line (OEL).

c. 3-digit: required (six-piece minimum, fewer not permitted except under 2.3); green Label 3 or OEL.

d. ADC: required (six-piece minimum, fewer not permitted); pink Label A or OEL.

e. Mixed ADC: required (no minimum); tan Label MXD or OEL.

2.3 Low-Volume Packages in Sacks or on Pallets

Periodicals 5-digit and 3-digit packages prepared under 2.2 may contain fewer than six pieces when the publisher determines that such preparation improves service. These low-volume packages may be placed in merged 5-digit scheme, merged 5-digit, 5-digit, 3-digit, and SCF sacks or on merged 5-digit scheme, merged 5-digit, 5-digit, 3-digit, or SCF pallets. Presorted rate pieces in such low-volume packages must be claimed at the applicable basic Presorted rate.

Automation rate pieces in such low-volume packages must be claimed at the applicable basic automation rate.

3.0 STANDARD MAIL

3.1 Basic Standards

As an option to the basic packaging requirements in M610 and M820, a mailer may choose to co-package (see M011) automation rate and Presorted rate pieces, subject to the following conditions:

a. The pieces in the automation rate mailing and the Presorted rate mailing must be part of the same mailing job and must be reported on the appropriate postage statement(s).

b. The pieces in the mailing job must be flat size and meet any other size and mailpiece design requirements applicable to the rate category for which they are prepared.

c. Mailings prepared in sacks must meet the basic standards in M910 or M920.

d. Mailings prepared on pallets must meet the basic standards in M045, M920, M930, or M940.

e. A minimum of 200 pieces or 50 pounds of automation rate pieces are required; the Presorted rate mailing may meet the residual volume requirements in E620. The total number of automation rate and Presorted rate pieces must be used to meet the minimum volume requirements for packages and containers.

f. Presorted rate pieces must contain a 5-digit barcode and be co-packaged with automation rate pieces for the same presort destination. If this optional preparation method is used, all automation rate and Presorted rate pieces in the same mailing job and reported on the same postage statement must be co-packaged.

g. Within a package, all pieces must meet the FSM 881 requirements or all pieces must meet the FSM 1000 requirements described in C820.

h. Mailers must sort Presorted rate pieces and automation rate pieces for each presort destination so that only one physical package for each logical presort destination (see M011) includes both Presorted rate pieces (containing a 5-digit barcode) and automation rate pieces (containing a ZIP+4 or delivery point barcode).

3.2 Package Preparation

Package size, preparation sequence, and labeling:

a. 5-digit: required (10-piece minimum, fewer not permitted); red Label D or optional endorsement line (OEL).

b. 3-digit: required (10-piece minimum, fewer not permitted); green Label 3 or OEL.

c. ADC: required (six-piece minimum, fewer not permitted); pink Label A or OEL.

d. Mixed ADC: required (no minimum); tan Label MXD or OEL.

* * * * *

An appropriate amendment to 39 CFR 111 to reflect these changes will be published if the proposal is adopted.

Stanley F. Mires,

Chief Counsel, Legislative.