[Federal Register Volume 89, Number 201 (Thursday, October 17, 2024)]
[Proposed Rules]
[Pages 83632-83633]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23861]


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POSTAL REGULATORY COMMISSION

39 CFR Part 3050

[Docket No. RM2025-1; Order No. 7705]


Periodic Reporting

AGENCY: Postal Regulatory Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is acknowledging a recent Postal Service 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: November 8, 2024.

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 October 8, 2024, 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), October 8, 2024 (Petition).
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II. Proposal Five

    Background. The Postal Service states that, on August 8, 2024, the 
Commission approved a methodology to report USPS Ground Advantage costs 
below the product level.\2\ The Postal Service explains that USPS 
Ground Advantage processing and delivery costs are both disaggregated 
into weight groupings of under 1 pound and 1 pound and greater. 
Petition, Proposal Five at 1. The Postal Service states that, ``[a]t 
the time the methodology was implemented, it was unknown whether the 
Postal Service would have sufficient data to support additional 
refinement of these weight groups for mail processing costs.'' Id. The 
Postal Service notes that the Commission acknowledged this uncertainty, 
but encouraged the Postal Service ``to further refine the mail 
processing cost model as more data becomes available to support 
additional weight steps.'' Id. (citing Order No. 7347 at 20). The 
Postal Service asserts that the USPS Ground Advantage product has now 
existed for four full quarters and, because volume 1 pound and greater 
has grown substantially, the Postal Service has confirmed that there 
are sufficient data being collected to support additional refinement of 
the 1 pound and greater weight grouping. Id.
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    \2\ Petition, Proposal Five at 1 (citing Docket No. RM2024-7, 
Order on Analytical Principles Used in Periodic Reporting (Proposal 
Two), August 8, 2024 (Order No. 7347)).
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    Additionally, the Postal Service notes that, as a result of 
recently approved methodologies relating to rural and city delivery 
costs, delivery costs reported in the Fiscal Year (FY) 2024 Annual 
Compliance Report will be substantially different from those reported 
in FY 2023.\3\ The Postal Service contends that ``the cost difference 
between parcels delivered to the door [compared to] those delivered to 
the mailbox is expected to widen.'' Id. at 2. The Postal Service 
contends that disaggregation of delivery costs into under 1 pound and 1 
pound and greater aims to capture this cost difference. Id. (citing 
Order No. 7347 at 20).
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    \3\ Id. at 2 (citing Docket No. RM2024-2, Order Approving 
Analytical Principles Used in Periodic Reporting (Proposal Eight) 
with Two Modifications, April 18, 2024 (Order No. 7049); Docket No. 
RM2022-3, Order Approving Analytical Principles Used in Periodic 
Reporting (Proposal One), August 26, 2024 (Order No. 7411)).
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    Proposal. For the purposes of negotiated service agreement cost 
reporting, the Postal Service proposes to disaggregate both mail 
processing and delivery costs for USPS Ground Advantage into the 
following weight groups:

    <bullet> 0-1 pound
    <bullet> 1-3 pounds
    <bullet> 3 pounds and greater

    Id. The Postal Service asserts that mail processing costs would 
continue to be disaggregated based on In-Office Cost System (IOCS) 
tallies. Id. at 3. The Postal Service states that delivery costs would 
continue to be disaggregated

[[Page 83633]]

based on the recording of USPS Ground Advantage pieces in the carrier 
cost systems. Id. The Postal Service contends that, based on a 
comparison of USPS Ground Advantage and Priority Mail IOCS mail 
processing tallies for FY 2024, Quarter 3 year-to-date, ``the precision 
of the proposed weight groupings will be better than those already 
approved for use in Priority Mail.'' Id. The Postal Service further 
contends that, because recent operational and methodological changes 
have increased the impact of delivery location on cost, it would be an 
improvement to further refine delivery cost into additional weight 
groupings. Id. at 3-4.
    Impact. The Postal Service states that the proposed methodology 
``tends to reflect'' lower mail processing and delivery costs for 
pieces that are 1-3 pounds and higher costs for pieces that are 3 
pounds or greater. Id. at 4. The Postal Service also explains generally 
that ``the share of pieces delivered to the mailbox decreases from the 
0-1 pound grouping to the 1-3 pound grouping and decreases further from 
1-3 pounds to 3 [pounds and greater].'' \4\
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    \4\ Id. at 4; id. n.2 (citing Library Reference USPS-RM2025-1-
NP1, Prop 5 ImpactAnalysis.xlsx, tab ``% to Mailbox'').
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III. Notice and Comment

    The Commission establishes Docket No. RM2025-1 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 November 8, 2024. Pursuant to 39 U.S.C. 505, 
Christopher C. Mohr 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. RM2025-1 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 October 8, 2024.
    2. Comments by interested persons in this proceeding are due no 
later than November 8, 2024.
    3. Pursuant to 39 U.S.C. 505, the Commission appoints Christopher 
C. Mohr 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 the publication of this Order in 
the Federal Register.

    By the Commission.
Erica A. Barker,
Secretary.
[FR Doc. 2024-23861 Filed 10-16-24; 8:45 am]
BILLING CODE 7710-FW-P