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Daily Rules, Proposed Rules, and Notices of the Federal Government

POSTAL SERVICE

Change in Rates and Classes of General Applicability for Competitive Products

AGENCY: Postal Service.
ACTION: Notice of a change in rates of general applicability for competitive products.
SUMMARY: This notice sets forth changes in rates of general applicability for competitive products.
DATES: Effective Date:January 27, 2013.
FOR FURTHER INFORMATION CONTACT: Daniel J. Foucheaux, Jr., 202-268-2989.
SUPPLEMENTARY INFORMATION:

On September 13, 2012, pursuant to their authority under 39 U.S.C. 3632, the Governors of the Postal Service established prices and classification changes for competitive products. The Governors' Decision and the record of proceedings in connection with such decision are reprinted below in accordance with section 3632(b)(2).

Stanley F. Mires, Attorney, Legal Policy & Legislative Advice. Decision of the Governors of the United States Postal Service on Changes in Rates and Classes of General Applicability for Competitive Products (Governors' Decision No. 12-2) September 13, 2012 Statement of Explanation and Justification

Pursuant to our authority under section 3632 of title 39, as amended by the Postal Accountability and Enhancement Act of 2006 (“PAEA”), we establish new prices of general applicability for the Postal Service's shipping services (competitive products), and such changes in classifications as are necessary to define the new prices. The changes are described generally below, with a detailed description of the changes in the attachment. The attachment includes the draft Mail Classification Schedule sections with changes in classification language in legislative format, and new prices displayed in the price charts.

As shown in the nonpublic annex being filed under seal herewith, the changes we establish should enable each competitive product to cover its attributable costs (39 U.S.C. 3633(a)(2)) and should result in competitive products as a whole complying with 39 U.S.C. 3633(a)(3), which, as implemented by 39 CFR 3015.7(c), requires competitive products to contribute a minimum of 5.5 percent to the Postal Service's institutional costs. Accordingly, no issue of subsidization of competitive products by market dominant products should arise (39 U.S.C. 3633(a)(1)). We therefore find that the new prices and classification changes are in accordance with 39 U.S.C. 632-3633 and 39 CFR 3015.2.

I. Domestic Products A. Express Mail

Overall, the Express Mail price change represents a 5.8 percent increase. The existing structure of zoned Retail, Commercial Base and Commercial Plus price categories is maintained.

Retail prices will increase an average of 6.5 percent. The price for the Retail Flat Rate Envelope and Legal Flat Rate Envelope, a significant portion of all Express Mail volume, is increasing 5.3 percent to $19.95. Additionally, the price for the recently-introduced Padded Flat Rate Envelope is increasing to $19.95.

The Commercial Base price category offers lower prices to customers who use online and other authorized postage payment methods. The Commercial Base prices will increase 2.0 percent.

The Commercial Plus price category offers even lower prices to large-volume customers. Commercial Plus prices, as a whole, will receive a 1.0 percent increase.

B. Priority Mail

Overall, Priority Mail prices will increase by 6.3 percent. However, the price increase varies by rate cell and price tier. The existing structure of Retail, Commercial Base, and Commercial Plus price categories is maintained.

Retail prices will increase an average of 9.0 percent. However, approximately three percent of the increase is for free tracking visibility which will now be included at no charge. Flat Rate Box prices will be: Small, $5.80; Medium, $12.35; Large, $16.85; and Large APO/FPO/DPO, $14.85. The regular Flat Rate Envelope will be priced at $5.60, with the Legal Size and Padded Flat Rate Envelopes priced at $5.75 and $5.95, respectively.

The Commercial Base price category offers lower prices to customers using online and other authorized postage payment methods. The average price increase for Commercial Base will be 3.7 percent.

The Commercial Plus price category offers even lower prices to large-volume customers. The average price increase for Commercial Plus will be 3.8 percent. This price category will continue to contain Critical Mail letters and flats, a half pound price, an assortment of Flat Rate packaging, and Commercial Plus Cubic pricing. New for January, Critical Mail letters and flats will each have the option of receiving a signature upon delivery. The letter option will be priced at $4.60; the flat option at $5.35. Cubic mailers will continue to be able to use soft packaging as well as traditional boxes.

C. Parcel Select

On average, prices for Parcel Select, the Postal Service's bulk ground shipping product, will increase 9.0 percent. For destination entered parcels, the average price increases are 8.0 percent for parcels entered at a destination delivery unit (DDU), 4.9 percent for parcels entered at a destination plant (DSCF) and 4.8 percent for parcels entered at a destination Network Distribution Center (DNDC).

For nondestination-entered parcels, the average price increases are 5.7 percent for origin Network Distribution Center (ONDC) presort, 4.3 percent for Network Distribution Center (NDC) presort, and 4.2 percent for nonpresort. Prices for Lightweight Parcel Select, formerly Standard Mail commercial parcels, will increase by 9.8 percent. The Regional Ground category will be eliminated due to insufficient volume.

D. Parcel Return Service

Parcel Return Service prices will have an overall price increase of 4.8 percent. Prices for parcels retrieved at a return Network Distribution Center (RNDC) will have a 1.0 percent overall increase, and prices for parcels picked up at a return delivery unit (RDU) will increase 8.5 percent. Additionally, the Postal Service will be introducing a full network return solution, Full Network PRS, available to high volume mailers with at least 50 thousand pieces annually.

E. First-Class Package Service

First-Class Package Service was transferred to the competitive product list on April 6, 2011. This product is positioned as a lightweight (less than one pound) offering used by businesses for fulfillment purposes. Overall, Commercial First-Class Package Service prices will increase 3.0 percent, with no structural changes.

F. Parcel Post, Renamed Standard Post

On July 20, 2012, in Docket No. MC2012-13, the Postal Regulatory Commission (PRC) gave conditional approval for Parcel Post to be transferred to the competitive product list. The conditions were: (1) That thePostal Service files a notice of competitive price adjustment for Parcel Post rates that demonstrates that the rates satisfy 39 U.S.C. 3633(a) and 39 CFR part 3015 (i.e. that Parcel Post will have 100 percent cost coverage); (2) that the Commission issues an order finding that the rates satisfy 39 U.S.C. 3633(a) and 39 CFR part 3015; and (3) that the Parcel Post transfer authorized by the Commission will not take effect until the effective date of the rates authorized in the subsequent Order. A 21 percent increase in prices will be needed to meet this statutory requirement to achieve 100 percent cost coverage. The transferred product will be renamed Standard Post.

G. Domestic Extra Services

Premium Forwarding Service prices will increase 10.5 percent. The enrollment fee will remain unchanged at $15.00. The weekly reshipment fee will increase to $17.00. Address Enhancement Service prices will be increasing between 3.7 and 17.7 percent depending on the particular rate element, to ensure adequate cost coverage. Competitive Post Office Box prices will be increasing 2.6 percent, which is within the existing price range. Package Intercept service, established January 22, 2012, will not have a change in prices. The Pick-up On Demand fee will be increased from $15.30 to $20.00, its first increase in four years. New for January, customers ordering flat rate packaging supplies online will be able to pay a fee to get supplies delivered faster than the current free service provided by shipping the supplies using Standard Post or Bound Printed Matter. This service will be priced at $2.50, and a price range will be established similar to other items in this category.

II. International Products A. Expedited Services

International expedited services include Global Express Guaranteed (GXG) and Express Mail International (EMI). Overall, GXG prices will rise by 9.6 percent, and EMI will be subject to an overall 13.2 percent increase. The existing structure of GXG Retail, Commercial Base, and Commercial Plus price categories is maintained, as well as the existing structure of EMI Flat Rate, Retail, Commercial Base and Commercial Plus. Classification changes include a change in the maximum weight of the EMI Flat Rate Envelope from 20 pounds to 4 pounds. In addition, the Pickup On Demand Service fee will increase, as previously described in the Domestic Extra Services section of this decision. Further, the Postal Service may offer one or more promotions in the form of a discount or rebate on certain GXG and EMI items, during an established promotional program period, to mailers that comply with the eligibility requirements of the promotional program.

Customers tendering at least $100,000 in revenue per year for not only GXG, EMI, Priority Mail International (PMI), but also First-Class Package International Service may request authorization for Commercial Plus discounts.

B. Priority Mail International

The overall increase for Priority Mail International (PMI) will be 15.1 percent. The existing structure of PMI Flat Rate, Retail, Commercial Base, and Commercial Plus price categories is maintained, Classification changes include the availability of Electronic USPS Delivery Confirmation® International, which is optionally provided at no charge and offers scan events for customers using select software or online tools. It is available for certain Priority Mail International Flat Rate Envelopes and Small Flat Rate Box offerings to select destinations. In addition, the Pickup On Demand Service fee will increase, as previously described in the Domestic Extra Services section of this decision. Further, the Postal Service may offer one or more promotions in the form of a discount or rebate on certain PMI items, during an established promotional program period, to mailers that comply with the eligibility requirements of the promotional program.

Customers tendering at least $100,000 in revenue per year for not only GXG, EMI, PMI, but also First-Class Package International Service, may request authorization for Commercial Plus discounts.

C. International Priority Airmail and International Surface Air Lift

Published prices International Priority Airmail (IPA) will increase by 1.9 percent, and International Surface Air Lift (ISAL) prices will increase by 4.4 percent.

D. Airmail M-Bags

The published prices for Airmail M-Bags will increase by 7.3 percent.

E. First-Class Package International ServiceTM

On August 10, 2012, the Postal Service filed with the Postal Regulatory Commission (PRC) a request to transfer First-Class Mail International packages and rolls from the market dominant product list to the competitive product list. On September 10, 2012, the PRC granted the Postal Service's request. The new product will be identified as First-Class Package International ServiceTM(FCPIS), which will comprise packages and rolls. Due to anticipated cost increases and market conditions, a 58.6 percent increase is planned for the new product.

Additionally, Electronic USPS Delivery Confirmation® International, which is optionally provided at no charge, offers scan events for customers using select software or online tools. It is available for FCPIS mailpieces meeting certain physical characteristics to select destinations. Further, the Postal Service will offer Commercial Base and Commercial Plus discounts to eligible FCPIS customers. Customers tendering at least $100,000 in revenue per year for GXG, EMI, PMI and First-Class Package International Service may request authorization for Commercial Plus discounts. Further, the Postal Service may offer one or more promotions in the form of a discount or rebate on certain Outbound Single-Piece First-Class Package International Service items, during an established promotional period, to mailers that comply with the eligibility requirements of the promotional program.

F. International Ancillary Services and Special Services

Prices for several international ancillary services and paper money orders will be increased. Certificates of Mailing will increase 4.3 percent. Registered Mail will increase 10.2 percent. International Return Receipt will also increase, and International Postal Money Orders will increase 1.1 percent. The amount of Express Mail International merchandise insurance coverage available for no fee will be increased from $100 to $200. Due to the elimination of the $0.85 fee for the EMI $100.01-$200 merchandise insurance coverage tier, the overall increase for the international ancillary services is zero percent.

Because of low customer demand, International Restricted Delivery will be removed from the competitive product list. The Postal Service intends to file a separate request, pursuant to 39 U.S.C. 3642, to remove International Restricted Delivery from the competitive product list.

Order

The changes in prices and classes set forth herein shall be effective at 12:01 a.m. on January 27, 2013. We direct the Secretary to have this decisionpublished in theFederal Registerin accordance with 39 U.S.C. 3632(b)(2). We also direct management to file with the Postal Regulatory Commission appropriate notice of these changes.

Further, Postal management is directed to provide the required public notice and to file with the Postal Regulatory Commission a request to remove International Restricted Delivery from the competitive product list of the Mail Classification Schedule, including any supporting documents, in accordance with 39 CFR part 3020.

By The Governors. Thurgood Marshall, Jr. Chairman Part B—Competitive Products 2000Competitive Product List 2001Competitive Product Descriptions 2100Domestic Products 2105Express Mail 2105.6Prices Retail Express Mail Zone/Weight Maximum weight (pounds) Zones 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 ($) ($) ($) ($) ($) ($) ($) 0.5 14.10 20.85 23.25 25.25 27.05 28.70 30.60 1 16.05 23.50 28.30 31.70 32.85 34.85 35.90 2 18.10 25.05 30.85 34.55 35.95 38.10 39.40 3 21.55 26.25 34.70 39.75 41.45 43.90 45.15 4 22.95 27.95 37.00 44.95 46.70 49.45 50.80 5 24.85 31.40 39.45 48.10 52.50 55.00 56.50 6 26.40 35.95 45.75 54.65 57.50 60.45 62.30 7 28.60 39.40 52.40 59.75 62.45 66.05 68.40 8 30.85 43.25 56.75 64.30 67.80 71.70 73.65 9 33.05 44.95 58.90 68.75 73.05 77.25 79.30 10 35.50 46.85 61.15 71.85 76.85 81.20 83.25 11 37.50 52.40 68.30 76.80 80.55 85.10 87.25 12 39.50 56.10 72.55 80.85 84.20 88.95 91.10 13 41.80 59.70 75.90 84.55 87.75 92.65 96.40 14 43.70 63.40 78.90 87.85 91.40 96.50 100.40 15 45.15 66.95 82.25 91.55 95.15 100.40 104.40 16 47.10 70.75 85.50 95.10 99.25 104.70 107.90 17 48.90 74.45 88.70 98.60 102.60 108.15 110.95 18 50.90 77.95 91.85 102.05 106.20 111.95 114.90 19 52.70 81.65 95.00 105.50 109.85 115.75 118.75 20 54.95 85.35 99.70 110.65 114.15 120.25 124.05 21 56.20 90.70 102.85 114.15 119.20 125.50 128.70 22 58.30 94.45 107.35 119.10 122.95 129.40 133.65 23 60.00 98.10 110.50 122.55 126.75 133.35 137.55 24 62.20 101.85 114.10 126.45 130.55 137.35 140.60 25 64.70 105.65 116.85 129.40 134.10 141.00 145.00 26 66.15 109.40 120.20 133.10 137.90 144.95 149.10 27 68.05 113.00 123.35 136.50 141.50 148.70 153.05 28 69.45 116.80 127.30 140.80 145.20 152.55 157.05 29 71.60 120.45 131.45 145.35 148.95 156.40 160.90 30 73.60 124.20 135.60 149.85 153.25 160.90 166.00 31 75.40 127.90 139.70 154.35 158.10 165.90 171.25 32 77.45 131.80 143.90 158.85 162.70 170.70 176.35 33 79.85 135.45 148.05 163.35 167.45 175.60 181.40 34 82.15 139.05 152.30 168.00 172.10 180.40 186.45 35 84.25 142.85 156.30 172.30 176.70 185.20 191.55 36 86.40 146.60 160.55 176.90 181.55 190.20 196.70 37 88.25 150.25 164.65 181.35 186.35 195.15 201.85 38 90.35 154.05 168.85 185.90 190.95 199.95 206.85 39 92.60 157.80 173.05 190.40 195.45 204.55 212.00 40 94.55 161.40 177.30 195.00 200.20 209.45 217.15 41 96.40 165.20 181.40 199.40 205.05 214.50 222.25 42 98.15 169.00 185.55 203.90 209.85 219.45 227.30 43 100.40 172.60 189.65 208.30 214.50 224.20 232.45 44 102.20 176.40 193.85 212.80 219.15 229.00 237.50 45 104.15 180.20 197.90 217.15 223.85 233.85 242.70 46 106.25 183.75 202.30 221.85 228.50 238.60 247.75 47 108.45 187.55 206.40 226.25 233.20 243.45 252.85 48 110.30 191.35 210.45 230.55 237.95 248.30 257.95 49 112.25 194.95 214.65 235.05 242.80 253.30 263.10 50 114.65 198.75 218.90 239.65 247.30 257.90 268.15 51 116.70 202.55 223.00 244.00 251.95 262.65 272.55 52 118.70 206.10 227.10 248.40 256.80 267.60 278.45 53 120.60 209.90 231.35 252.85 261.55 272.45 283.55 54 122.75 213.70 235.45 257.20 266.25 277.30 288.60 55 125.20 218.60 239.75 261.80 270.90 282.00 293.65
56 127.80 222.40 243.80 266.10 275.55 286.80 298.80 57 130.05 226.15 248.00 270.55 280.25 291.60 303.90 58 132.25 229.75 252.10 274.90 285.00 296.40 309.00 59 134.05 233.45 256.25 279.30 289.80 301.30 314.10 60 135.85 237.20 260.40 283.70 294.45 306.05 319.20 61 137.80 241.00 264.75 288.30 299.15 310.80 324.30 62 139.95 244.65 268.80 292.55 303.80 315.50 329.50 63 142.25 248.35 272.95 296.95 308.55 320.40 334.65 64 144.15 252.05 277.10 301.30 313.30 325.20 339.75 65 146.60 255.80 281.20 305.65 317.95 329.90 344.75 66 149.35 259.60 285.50 310.15 322.65 334.70 349.80 67 151.10 263.25 289.70 314.55 327.25 339.30 354.95 68 153.10 267.00 293.80 318.85 332.15 344.30 360.20 69 155.50 270.75 297.95 323.20 336.70 348.90 365.05 70 158.35 274.50 302.15 327.60 341.45 353.70 370.20 Retail Flat Rate Envelope ($) Retail Regular Flat Rate Envelope, per piece 19.95 Retail Legal Flat Rate Envelope, per piece 19.95 Retail Padded Flat Rate Envelope, per piece 19.95 Retail Flat Rate Box ($) Retail Flat Rate Box, per piece 39.95 Commercial Base Zone/Weight Maximum weight (pounds) Zones 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 ($) ($) ($) ($) ($) ($) ($) 0.5 13.09 16.99 20.42 23.23 25.22 26.95 27.68 1 15.13 16.99 20.42 23.23 25.22 26.95 27.68 2 15.58 17.25 22.98 25.71 28.51 29.93 31.36 3 15.94 18.47 25.44 28.48 31.59 32.64 33.81 4 16.30 19.36 27.58 31.16 34.48 35.54 36.94 5 16.65 20.16 30.17 34.08 37.40 38.49 39.87 6 16.93 21.84 33.47 37.65 41.52 42.49 44.29 7 17.51 22.93 35.78 40.46 44.45 45.48 47.05 8 18.02 24.06 38.09 43.04 47.41 48.67 50.07 9 18.66 24.94 40.26 45.82 50.39 51.85 53.29 10 19.32 24.97 42.12 48.23 53.05 54.52 57.32 11 20.00 27.38 44.34 50.82 56.32 58.13 59.49 12 20.83 28.51 46.72 53.19 59.10 61.28 62.68 13 21.37 29.57 48.94 55.62 61.46 64.53 65.71 14 21.99 30.70 51.47 57.97 63.86 67.34 68.93 15 22.62 31.52 53.21 60.31 66.35 71.96 73.98 16 23.40 32.89 55.77 62.56 68.40 72.92 74.91 17 24.14 34.83 58.78 64.53 69.95 73.75 75.78 18 25.02 35.97 60.56 65.90 71.51 74.55 76.92 19 25.81 36.93 61.97 67.31 73.14 76.20 78.95 20 26.67 37.40 63.56 68.93 74.73 77.98 80.76 21 28.52 41.60 69.49 75.64 81.62 85.12 88.80 22 29.34 42.52 71.16 77.34 83.32 87.10 90.70 23 30.31 43.40 72.87 79.24 85.26 88.97 92.84 24 31.12 44.16 74.80 81.25 87.53 90.91 94.75 25 31.85 44.40 76.71 82.92 89.10 93.02 96.60 26 32.59 46.10 78.82 84.96 92.24 95.66 98.90 27 33.40 46.98 80.75 87.39 94.78 97.56 100.59 28 34.15 48.00 82.89 89.90 96.72 99.49 102.73 29 34.92 48.81 84.99 91.80 98.79 101.66 104.90 30 35.56 48.84 86.70 93.91 101.05 104.02 106.03 31 36.41 50.64 88.56 96.05 102.80 105.71 109.18 32 37.45 51.81 90.51 98.19 104.90 107.84 111.25 33 38.32 53.12 92.24 100.30 107.04 110.25 113.79 34 39.15 53.92 94.35 102.43 109.34 112.62 116.17 35 39.99 54.92 96.45 104.56 111.45 114.99 118.44 36 40.70 55.80 98.52 106.67 113.62 117.53 120.74 37 41.36 57.40 100.46 108.84 115.89 120.14 123.28 38 42.03 58.30 102.23 110.75 118.10 122.94 125.62 39 42.75 59.30 104.14 112.83 120.34 125.49 128.12 40 43.43 60.30 106.04 114.95 122.47 127.89 130.69 41 44.61 61.54 107.95 117.13 124.81 129.96 133.17 42 45.50 62.77 110.04 119.23 127.35 133.00 135.87 43 46.70 63.94 112.22 121.34 129.72 135.14 138.68 44 47.74 65.22 114.12 123.48 131.99 137.50 141.62 45 48.75 66.58 116.17 125.59 134.57 139.88 143.89 46 49.72 68.02 118.20 128.26 137.11 142.29 146.43 47 50.55 69.46 120.27 129.66 139.64 144.36 148.74 48 50.88 70.83 121.97 131.80 142.19 146.97 151.51 49 51.25 72.43 123.71 132.20 142.22 149.30 154.21 50 52.22 72.46 123.74 132.83 142.25 149.34 154.25 51 54.05 75.47 127.66 138.15 150.00 154.48 160.13 52 54.89 77.07 129.62 140.24 152.54 157.02 163.26 53 55.96 78.35 131.60 142.59 155.28 159.91 166.31 54 56.87 79.92 133.77 144.70 157.62 162.66 169.15 55 57.70 81.38 136.14 146.66 159.99 165.37 171.66 56 58.77 82.92 138.61 148.36 162.50 168.45 174.43 57 59.90 84.36 141.12 151.01 164.84 171.19 177.40 58 61.20 85.76 143.69 153.08 167.38 174.25 180.54 59 62.07 87.20 146.19 154.95 169.92 176.99 183.72 60 62.71 87.80 148.57 157.59 172.65 180.01 185.95 61 64.41 90.23 151.10 159.60 175.39 182.78 185.99 62 65.95 91.84 153.41 162.63 178.13 185.78 192.93 63 67.05 93.65 156.02 164.98 181.08 188.99 196.14 64 68.32 95.48 158.56 167.75 184.08 192.26 199.28 65 69.18 97.32 160.89 170.45 187.02 195.67 201.99 66 70.35 99.08 163.47 173.23 189.96 198.88 205.59 67 71.10 100.96 165.81 176.23 193.17 202.33 209.17 68 73.30 102.73 168.35 179.17 196.14 202.36 212.54 69 74.41 104.56 170.85 182.15 199.73 208.87 221.63 70 75.18 105.37 170.88 184.95 202.91 211.69 224.85 Commercial Base Flat Rate Envelope ($) Commercial Base Regular Flat Rate Envelope, per piece 18.11 Commercial Base Legal Flat Rate Envelope, per piece 18.11 Commercial Base Padded Flat Rate Envelope, per piece 18.11 Commercial Base Flat Rate Box ($) Commercial Base Flat Rate Box, per piece 39.95 Commercial Plus Zone/Weight Maximum weight (pounds) Zones 1 & 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8 ($) ($) ($) ($) ($) ($) ($) 0.5 11.16 13.00 15.82 16.93 17.19 17.87 18.13 1 11.82 15.62 18.63 20.69 21.12 21.41 24.93 2 12.53 16.87 21.91 24.43 26.91 28.67 29.79 3 13.30 18.26 25.16 28.16 30.06 32.28 33.29 4 14.19 19.15 27.27 30.81 34.09 35.14 36.31 5 15.07 19.93 29.83 33.70 36.98 38.06 39.33 6 15.74 21.59 33.10 37.22 41.05 41.77 43.55 7 16.43 22.67 35.38 40.00 43.95 44.97 46.52 8 17.15 23.79 37.67 42.56 46.88 48.12 49.51 9 17.89 24.67 39.81 45.31 49.82 51.27 52.69 10 18.58 24.70 41.65 47.69 52.46 53.91 56.68 11 19.48 27.07 43.84 50.25