[Federal Register Volume 69, Number 212 (Wednesday, November 3, 2004)]
[Rules and Regulations]
[Pages 63946-63947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23997]


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POSTAL SERVICE

39 CFR Part 20


Discontinuance of Volume Discount Availability for IPA and ISAL 
Mailers

AGENCY: Postal Service.

ACTION: Final rule.

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SUMMARY: This final rule deletes International Mail Manual (IMM) 
292.212, 292.213, and 293.75, which authorized mailers who spent $2 
million or more combined on International Priority Airmail (IPA) and 
International Surface Air Lift (ISAL) in the preceding Postal Service 
fiscal year to receive discounted postage rates.

EFFECTIVE DATE: November 3, 2004.

FOR FURTHER INFORMATION CONTACT: Rick Klutts, 202-268-7268.

SUPPLEMENTARY INFORMATION: On July 28, 2004, the Postal Service 
published for comment in the Federal Register (69 FR 45002-45003) a 
proposed rule to delete standards that authorize postage discounts for 
mailers who spend $2 million or more combined on International Priority 
Airmail (IPA) and International Surface Air Lift (ISAL) in the 
preceding Postal Service fiscal year. The Postal Service proposed to 
discontinue these discounts due to recent Postal Service reviews of 
costs for providing these services. These cost reviews identified 
increases in transportation, terminal dues, and other costs that have 
all risen while published rates for IPA and ISAL have remained static 
since 2001. When costs rise above the rate we are charging, we are 
obliged to adjust prices and discounts (in this case IPA and ISAL) so 
they are not subsidized by other domestic or international product 
offerings. These changes do not affect the standards for existing or 
prospective customers who use IPA or ISAL mail and participate or would 
like to participate in the International Customized Mail (ICM) service 
agreement program as defined in IMM 297.
    The Postal Service requested comments on the proposed rule by 
August 18, 2004. Comments were received from two parties, one who 
voiced opposition to the proposal, and one whose comment was outside 
the scope of the proposed rule.
    An industry organization respondent questioned the rationale for 
the proposal and requested a more detailed cost analysis; this 
commenter also cited a 1998 report to Congress that states there is 
adequate cost coverage for these products. In addition, the commenter 
suggested a correlation between the proposed discontinuance of volume 
discounts and International Customized Mail (ICM) agreements. As 
pointed out in the supplementary information, the Postal Service is 
obligated to offer its services at a rate that covers both average 
attributable cost and institutional cost. When costs rise above the 
rate we are charging, adjustments to prices and discounts (in this case 
IPA and ISAL) are required so they are not subsidized by other domestic 
or international product offerings. Moreover, since 1998, 
transportation costs, terminal dues costs, and other costs have risen 
while published rates for IPA and ISAL have remained static since 2001.
    The other comment was made by an international mailer who enters 
mail under an ICM agreement. The mailer stated that IPA was a very good 
service and they did not want to lose their current discount. Since 
this proposed rule does not address ICMs, this comment falls outside 
the scope of this rulemaking and therefore will not be addressed at 
this time. Additionally, nothing in this change precludes this mailer 
from entering IPA and ISAL mailings under their existing ICM agreement.
    For the reasons discussed above, the Postal Service adopts the 
following amendments to the International Mail Manual, which is 
incorporated by reference in the Code of Federal Regulations. See 39 
CFR Part 20.1.

List of Subjects in 39 CFR Part 20

    International postal service, Foreign relations.

PART 20--[AMENDED]

0
1. The authority citation for 39 CFR part 20 continues to read as 
follows:

    Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407 and 408.


0
2. Amend the International Mail Manual as set forth below:

International Mail Manual (IMM)

* * * * *

2 Conditions for Mailing

* * * * *

290 Commercial Services

* * * * *

292 International Priority Airmail Service

* * * * *
292.2 Postage
292.21 Rates
* * * * *

[[Page 63947]]

(Delete 292.212 and 292.213; renumber current 292.214 through 292.217 
as new 292.212 through 292.215.)
* * * * *

293 International Surface Air Lift (ISAL) Service

* * * * *
293.7 Postage
* * * * *
(Delete 293.75; renumber current 293.76 as new 293.75.)
* * * * *

Neva R. Watson,
Attorney, Legislative.
[FR Doc. 04-23997 Filed 11-2-04; 8:45 am]
BILLING CODE 7710-12-P