[Federal Register Volume 88, Number 177 (Thursday, September 14, 2023)]
[Proposed Rules]
[Pages 63045-63046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-19854]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2023-10; Order No. 6673]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is acknowledging a recent filing requesting the 
Commission initiate a rulemaking proceeding to consider changes to 
analytical principles relating to periodic reports (Proposal Five). 
This document informs the public of the filing, invites public comment, 
and takes other administrative steps.

DATES: Comments are due: October 10, 2023.

ADDRESSES: Submit comments electronically via the Commission's Filing 
Online system at https://www.prc.gov. Those who cannot submit comments 
electronically should contact the person identified in the FOR FURTHER 
INFORMATION CONTACT section by telephone for advice on filing 
alternatives.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 
202-789-6820.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Introduction
II. Proposal Five
III. Notice and Comment
IV. Ordering Paragraphs

I. Introduction

    On September 5, 2023, the Postal Service filed a petition pursuant 
to 39 CFR 3050.11 requesting that the Commission initiate a rulemaking 
proceeding to consider changes to analytical principles relating to 
periodic reports.\1\ The Petition identifies the proposed analytical 
changes filed in this docket as Proposal Five.
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    \1\ Petition of the United States Postal Service for the 
Initiation of a Proceeding to Consider Proposed Changes in 
Analytical Principles (Proposal Five), September 5, 2023 (Petition). 
The Postal Service filed a notice of filing of non-public materials 
relating to Proposal Five. Notice of Filing of USPS-RM2023-10-NP1 
and Application for Nonpublic Treatment, September 5, 2023.
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II. Proposal Five

    Background. Proposal Five relates to modifications to the Parcel 
Select (PS)/Parcel Return Service (PRS) mail processing and 
transportation cost models. Petition, Proposal Five at 1. The cost 
models were last presented in Docket No. ACR2022, Library References 
USPS-FY22-NP15 and USPS-FY22-NP16, respectively. Id. The proposed 
modifications to the mail processing and transportation cost models 
underlie recent operational and price structure changes. Id.
    Previously, USPS Retail Ground (RG), First-Class Package Service 
(FCPS), and Parcel Select were listed as separate Competitive products 
within the Mail Classification Schedule (MCS) with Parcel Select Ground 
(PSG) as a price category within the PS product. Id. In order to 
improve service standards for RG and PSG, the Postal Service 
implemented operational changes to process and transport RG and PSG 
mail along with FCPS mail in the contiguous United States beginning FY 
2022, Quarter 4.\2\
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    \2\ Id.; see Docket No. N2022-1, United States Postal Service's 
Request for an Advisory Opinion on Changes in the Nature of Postal 
Services, March 21, 2022, at 3.
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    In addition, classification changes were made to the products on 
the MCS by removing RG from the Competitive product list, removing PSG 
as a price category from PS, and expanding the FCPS price structure to 
include mailpieces weighing up to 70 pounds thus subsuming the RG and 
PSG price categories under FCPS.\3\
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    \3\ Petition, Proposal Five at 1-2; see Docket Nos. MC2022-81 
and MC2022-82, Order Removing USPS Retail Ground from the 
Competitive Product List and Approving Competitive Classification 
Changes to First-Class Package Service and Parcel Select, October 
28, 2022, at 1-2 (Order No. 6318).
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    In Docket Nos. CP2023-113 and CP2023-114, the Commission approved 
additional proposed classification changes to rename FCPS to USPS 
Ground Advantage and several changes to the PS price structure 
including: (1) eliminating the distinction of machinable and 
nonmachinable prices for Parcel Select Heavy Weight (PSHW), (2) 
establishing a Destination Hub (DHUB) price category for PSHW, (3) 
establishing a DHUB price category for Parcel Select Lightweight 
(PSLW), and

[[Page 63046]]

(4) revising the PSLW price structure that focused on destination entry 
only.\4\
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    \4\ Docket Nos. CP2023-113 and CP2023-114, Order Concerning 
Changes in Rates of General Applicability and Classifications for 
First-Class Package Service and Parcel Select, June 7, 2023, at 1 
(Order No. 6536).
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    Proposal. The Postal Service proposes that the PS/PRS mail 
processing and transportation cost models be modified to accommodate 
both the previous price structure and the new price structure. 
Petition, Proposal Five at 2-3. The Postal Service confirms that both 
price structures were in place for portions of FY 2023. Id. at 3.
    Rationale and impact. The Postal Service provided a modified mail 
processing cost model in the Excel file ``USPS-FY22-
NP15.PROP.FIVE.xls'' and a modified transportation cost model in the 
Excel file ``USPS-FY22-NP16.PROP.FIVE.xls'' under seal in Library 
Reference USPS-RM2023-10-NP1. Id. at 3, 11.
    The Postal Service states that the Docket No. ACR2022 Cost and 
Revenue Analysis (CRA) proportional adjustment factor is incorporated 
in the model as a value so that the factor does not recalculate based 
on proposed FY 2023 modifications and the CRA proportional adjustment 
factor will be calculated as usual when the Docket No. ACR2023 cost 
model input data become available. Id. at 3.
    The Postal Service has incorporated DHUB cost estimates for 
machinable, nonmachinable, oversize PSHW, and PSLW mailpieces into the 
summary worksheet of the modified mail processing cost model. Id. The 
new price structure consists of four destination entry levels: 
destination network distribution center, destination sectional center 
facility, DHUB, and destination delivery unit (DDU). Id. at 4. There 
are numerous other changes to other pages in the workbook described. 
Id. at 4-11.
    The Postal Service states that the transportation cost model has 
been expanded to include both DHUB and DDU transportation cost 
estimates. Id. However, since there is no DHUB data currently available 
the Postal Service used intermediate and long distance PSLW DDU costs 
as proxies for PSLW DHUB costs. Id. The Postal Service states that the 
current methodology used to develop the DHUB cost estimates in the 
transportation cost model is a temporary solution. Id. at 13. The 
Postal Service assures that the cost model will be modified so that the 
DHUB transportation costs will be estimated using the same methodology 
as other price categories once DHUB volume and cubic feet data become 
available. Id.
    Finally, the Postal Service has provided the mail processing unit 
cost estimates and the transportation cost estimate impacts under seal 
in an Excel file in Library Reference USPS-RM2023-10-NP1. Id. The 
Postal Service asserts that adoption of the proposed cost models would 
have no impact on the FY 2022 CRA-level costs. Id.

III. Notice and Comment

    The Commission establishes Docket No. RM2023-10 for consideration 
of matters raised by the Petition. More information on the Petition may 
be accessed via the Commission's website at https://www.prc.gov. 
Interested persons may submit comments on the Petition and Proposal 
Five no later than October 10, 2023. Pursuant to 39 U.S.C. 505, Philip 
T. Abraham is designated as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this proceeding.

IV. Ordering Paragraphs

    It is ordered:
    1. The Commission establishes Docket No. RM2023-10 for 
consideration of the matters raised by the Petition of the United 
States Postal Service for the Initiation of a Proceeding to Consider 
Proposed Changes in Analytical Principles (Proposal Five), filed 
September 5, 2023.
    2. Comments by interested persons in this proceeding are due no 
later than October 10, 2023.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Philip T. 
Abraham to serve as an officer of the Commission (Public 
Representative) to represent the interests of the general public in 
this docket.
    4. The Secretary shall arrange for publication of this order in the 
Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2023-19854 Filed 9-13-23; 8:45 am]
BILLING CODE 7710-FW-P