# Presentation: 545402

## 
R2001-1 OMNIBUS

RATE CASE

**R2001-1 OMNIBUS**
**RATE CASE**

***MTAC***
***February 6, 2002***

**Timeline And Dates**
**Settlement Changes**
**First Class**
**Periodicals**
**Parcel Post**
**Standard Mail**
**Scorecard**
**Q&A**

**Agenda**

**R2001-1 OMNIBUS RATE CASE **

## Filing Date		SEP 24	
PRC Decision	JUL 24		
GOV Decision	AUG 6
Implementation	Late SEP	
Duration		12 Months	

**Timeline Comparison**

**Filing Date****	****	****SEP 24****	**
**PRC Decision****	****JUL 24****	****	**
**GOV Decision****	****AUG 6**
**Implementation****	****Late SEP****	**
**Duration****	****	****12 Months****	**

**Rate**
_**Case**_

**R2001-1 OMNIBUS RATE CASE **

**Notes:**

Now let’s review the overall strategy. 
As I mentioned last month, we do not want this to be a “plain vanilla” traditional case with more revenue as the only goal.
For instance, we will offer enhancements to make our products more useful.  One example is to expand the availability of delivery confirmation.
Worksharing continues to be an important component in our pricing strategy.. 
We have been listening to our customers and responding to their needs to make the mailing business work for both of us. 
We will begin laying the groundwork for product redesign. 
Finally, we will be looking for ways of mitigating the impact on customers.  This means smoothing out the increases so some are not disproportionately small and others are not disproportionately large.    

## R2001-1 OMNIBUS RATE CASE 

**R2001-1 OMNIBUS RATE CASE **

**Significant Dates**

** ****Chair Suggests Settlement****	****OCT 25**
**“****Final” Proposed Agreement****	****DEC 26**
** ****Parties Request Cross-exam****	****JAN 07**
** ****Final Proposed Agreement****	****JAN 17**
** ****Parties State Opposition****	****JAN 18**
** ****Opposing Testimony Filed****	****JAN 30**
**Opposing Party Cross-exam****	****FEB 14**
**Rebuttal Testimony****	****	****FEB 26**

**Notes:**

Now let’s review the overall strategy. 
As I mentioned last month, we do not want this to be a “plain vanilla” traditional case with more revenue as the only goal.
For instance, we will offer enhancements to make our products more useful.  One example is to expand the availability of delivery confirmation.
Worksharing continues to be an important component in our pricing strategy.. 
We have been listening to our customers and responding to their needs to make the mailing business work for both of us. 
We will begin laying the groundwork for product redesign. 
Finally, we will be looking for ways of mitigating the impact on customers.  This means smoothing out the increases so some are not disproportionately small and others are not disproportionately large.    

## Filing Date		SEP 24	SEP 24
PRC Decision	JUL 24		MAR 25
GOV Decision	AUG 6		APR 2
Implementation	Late SEP	JUN 30
Duration		12 Months	9 Months

**Timeline Comparison**

**Filing Date****	****	****SEP 24****	****SEP 24**
**PRC Decision****	****JUL 24****	****	****MAR 25**
**GOV Decision****	****AUG 6****	****	****APR 2**
**Implementation****	****Late SEP****	****JUN 30**
**Duration****	****	****12 Months****	****9 Months**

**Rate**
_**Case**_

_**Settlement**_

**R2001-1 OMNIBUS RATE CASE **

**Notes:**

Now let’s review the overall strategy. 
As I mentioned last month, we do not want this to be a “plain vanilla” traditional case with more revenue as the only goal.
For instance, we will offer enhancements to make our products more useful.  One example is to expand the availability of delivery confirmation.
Worksharing continues to be an important component in our pricing strategy.. 
We have been listening to our customers and responding to their needs to make the mailing business work for both of us. 
We will begin laying the groundwork for product redesign. 
Finally, we will be looking for ways of mitigating the impact on customers.  This means smoothing out the increases so some are not disproportionately small and others are not disproportionately large.    

## Settlement Changes

**First-Class**
**Periodicals**
**Parcel Post**
**Standard Mail**

**R2001-1 OMNIBUS RATE CASE **

## First-Class Mail

**3- & 5-Digit Automation Discounts Increased**
**QBRM Postage Discount Increased**
**3-Digit Sortation Required For Auto Letters & Cards**

**R2001-1 OMNIBUS RATE CASE **

## First-Class Mail

**	****	****   ****	****	****USPS****	****	****12/26**
_**Discount**_**        **_**Proposed**__**	**_**    **_**Settlement**_
**3-D Auto****	****	****7.6 ¢                  7.8 ¢****	**
**5-D Auto****	****	****9.0 ¢****	****	****         9.2 ¢**
**QBRM****	****	****2.5 ¢****	****	****         3.0 ¢**

**R2001-1 OMNIBUS RATE CASE **

## Periodical Changes

**Eliminate Editorial Drop Ship Discounts**
**Replace With Enhanced Pallet Drop Ship Discounts**
**“****Re-balance” Rates**

**R2001-1 OMNIBUS RATE CASE **

## Periodicals -- Outside County

**R2001-1 OMNIBUS RATE CASE **

## Periodicals -- Outside County

**R2001-1 OMNIBUS RATE CASE **

## Periodicals -- Outside County

**R2001-1 OMNIBUS RATE CASE **

**Retail Parcel Post**
**Settlement Rates same as Proposed**
**Parcel Select Settlement Rates**
**DDU:     Same As Current**
**DSCF:  ****	****For Increases -- As Proposed Rates,**
**	****	****For Decreases -- Frozen At Current Rates**
**DBMC:  Reduced 1.8% from Proposed Rates**

**Parcel ****Post**

**R2001-1 OMNIBUS RATE CASE **

**Intra-BMC****	****18.1%****	****18.1%**
**Inter-BMC****	****17.2%****	****17.2%**
**Retail****	****17.6%****	****17.6%**
**DBMC****	****               9.6%****	****7.8%**
**DSCF****	****-1.2%****	****1.3%**
**DDU****	****-3.1%****	****0.0%**
**Parcel Select****	****4.6%****	****4.1%**

**Parcel Post**

**USPS**
_**Proposed**_

**Settlement**
_**Offer**_

**R2001-1 OMNIBUS RATE CASE **

**Increase Pound Rate to 61 cents**
**Still a reduction from today’s 63.8 cents**
**But higher than proposed 59.8 cents**
**Per piece rate element changes, too**
** ****Lower proposed saturation letter rate**
**1/10 cent lower than proposed**
** ****Extend 3.5 oz. Letter Proposal to ECR**

**Standard Mail - ECR**

**R2001-1 OMNIBUS RATE CASE **

**R2001-1 Omnibus Rate Case**
**Automation Letter Weight Limit**

**3.3**

**3.5**

**16 ounces**

**Price**

**3/5 auto flat**

**5-D auto letter**

**26.1**

**19.0**

**7.1 cents**

**Notes:**
For letter-size Standard Mail items, there are three major initiatives.
Just like in the proposal for First-Class Mail, pieces that cannot be processed on automation equipment will be assessed higher charges.  In particular, this affects mailers who use small items such as pens, pencils, or bulky return address labels in their promotional or fundraising letters.  It will also apply to pieces for which the mailer has requested manual handling. The nonmachinable letter surcharge would be 4 cents for Regular and 2 cents for Nonprofit. 
We will refine the sorting options in the same manner as First-Class letters by replacing the current basic Automation rate with AADC and mixed AADC rates. As in First-Class Mail, the 3-digit preparation would be optional.
The significant change for ECR rates is the introduction of delivery point barcode and other automation-compatibility requirements for all ECR letters that qualify for high-density or saturation rates.
The barcode requirement would give the Postal Service the option of merging this mail with other letters in carrier-route sequence.  The automation-compatibility requirements would be the same as now exist for Standard Mail Regular automation letters.  Pieces that do not meet automation compatibility would be charged the nonletter rate.  
We also propose a modest 6.3 percent reduction in the pound rate charged for enhanced carrier route pieces weighing more than 3.3 ounces.  We have asked for reductions in previous cases, and the Commission recommended a modest reduction in the last case.  
We also propose to increase the maximum weight limit for automation letters to 3.5 ounces. This differs from our proposal in the last rate case because mailers will pay for the added weight through the pound charge.
In addition, we will increase the residual shape or parcel surcharge from 18 to 23 cents. This will better reflect the additional costs of handling small or light weight parcels. 

## R2001-1 OMNIBUS SETTLEMENT

**56 Signers**
** ****1 Opponent**
** ****5 Others**

**Current Status**