Periodic Reporting

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. The Petition identifies the proposed analytical changes filed in this docket as Proposal Five.

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. 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.

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. 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).

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:

• 0-1 pound
• 1-3 pounds
• 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 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].”

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 .

[FR Doc. 2024-23861 Filed 10-16-24; 8:45 am]

BILLING CODE 7710-FW-P