Proposed Rule2023-12895
Periodic Reporting
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 16, 2023
Issuing agencies
Postal Regulatory Commission
Abstract
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 Three). This document informs the public of the filing, invites public comment, and takes other administrative steps.
Full Text
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<title>Federal Register, Volume 88 Issue 116 (Friday, June 16, 2023)</title>
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[Federal Register Volume 88, Number 116 (Friday, June 16, 2023)]
[Proposed Rules]
[Pages 39388-39390]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12895]
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POSTAL REGULATORY COMMISSION
39 CFR Part 3050
[Docket No. RM2023-8; Order No. 6538]
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 Three).
This document informs the public of the filing, invites public comment,
and takes other administrative steps.
DATES: Comments are due: July 12, 2023.
ADDRESSES: Submit comments electronically via the Commission's Filing
Online system at <a href="https://www.prc.gov">https://www.prc.gov</a>. 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 Three
III. Notice and Comment
IV. Ordering Paragraphs
I. Introduction
On June 7, 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 Three.
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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 Three), June 7, 2023 (Petition).
Proposal Three is attached to the Petition. The Postal Service also
filed a notice of filing of non-public material relating to Proposal
Three. Notice of Filing of USPS-RM2023-8-NP1 and Application for
Nonpublic Treatment, June 7, 2023.
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II. Proposal Three
Background. The International Cost and Revenue Analysis (ICRA)
model develops estimated settlement and international transportation
costs for the various categories of outbound international Negotiated
Service Agreement (NSA) mail by using NSA
[[Page 39389]]
activity to calculate product pricing group average rates. Petition,
Proposal Three at 4-5. In Docket No. RM2022-9, the Commission approved
changes in analytical principles to allow for more precise reporting of
Revenue, Pieces, and Weight (RPW) data used in the ICRA.\2\ As relevant
here, the System for International Revenue and Volume, Outbound-
International Origin-Destination Information System (SIRVO) data, which
the Postal Service uses in its RPW methodology, includes fields at the
destination-country level, a ``Tracked'' indicator for First-Class
Package International Service (FCPIS), and gross weights for outbound
international NSA mailpieces. Petition, Proposal Three at 5.
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\2\ Docket No. RM2022-9, Order on Analytical Principles Used in
Periodic Reporting (Proposal Three), September 12, 2022 (Order No.
6272).
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In addition, in January 2023, the Commission approved the Postal
Service's proposal to collapse zoned prices based on origin ZIP Code
for Priority Mail International (PMI) destined to Canada into uniform
rates as a single country group.\3\ In the Fiscal Year 2022 Annual
Compliance Determination (ACD), the Commission noted that the Postal
Service had included a file in a Library Reference that altered ICRA
unit costs used as input to the financial models for NSAs as a result
of the pricing changes for PMI destined to Canada, but did not mention
the relevant computational change in the preface.\4\ Although the new
file did not alter the results of the FY 2022 ACD, the Commission
reminded the Postal Service of its obligations to identify any input
data or quantification techniques that changed in the prior year and to
request changes to analytical principles as appropriate. FY 2022 ACD at
86-87.
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\3\ Docket No. CP2023-42, Order Approving Price Adjustments for
Competitive Products, December 22, 2022 (Order No. 6384).
\4\ Docket No. ACR2022, Annual Compliance Determination, March
29, 2023, at 86 (FY 2022 ACD).
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Proposal. The Postal Service proposes five revisions to analytical
principles related to the ICRA. Three of those five revisions pertain
to the use of Outbound International NSA SIRVO data.
First, the Postal Service proposes to use Outbound International
NSA SIRVO data to attribute outbound settlement expenses and
international transportation costs to international NSA products at the
country-level. Petition, Proposal Three at 1. Currently, Outbound
International NSA data used in the ICRA are reported by pricing group
only. Id. at 11. Following the approval of Docket No. RM2022-9,
Proposal Three, the underlying report data used in the ICRA contains
more granularity, including NSA country-level detail. Id. Thus, the
Postal Service proposes to assign settlement and international
transportation rates to International NSA products using actual
country-level International NSA data rather than product average
pricing group rates. Id. at 5.
Second, the Postal Service proposes to use the Outbound
International NSA SIRVO data ``Tracked'' indicator to attribute
settlement expenses more accurately to NSA FCPIS. Id. at 2. The Postal
Service explains that Outbound FCPIS tracking remuneration is included
for some countries in settlement costs, but data used in the ICRA do
not distinguish between tracked and un-tracked NSA FCPIS. Id. at 13. As
a result, the ICRA applies a higher tracked per-piece settlement rate
to all countries to calculate NSA FCPIS settlement expenses. Id. The
Postal Service proposes to incorporate the ``Tracked'' indicator to
apply the tracked per-piece settlement rate only to countries that
include FCPIS tracking remuneration in settlements. Id.
Third, the Postal Service proposes to use Outbound International
NSA SIRVO gross weight data to attribute settlement expenses and
domestic and international transportation costs to outbound
International NSA products. Id. at 2. Previously, data for outbound
International NSA products included only net weights, so the ICRA
applied gross-to-net-weight conversion factors using non-NSA product
data. Id. at 2, 14. Following the Commission's approval of Docket No.
RM2022-9, Proposal Three, NSA gross weight is now included in the
underlying data used in the ICRA. Id. at 14. Accordingly, the Postal
Service proposes to incorporate the gross weights for outbound
International NSA products to refine its calculations of settlement
expenses and domestic and international transportation costs, and to
make the International NSA approach consistent with the non-NSA
approach. Id.
Fourth, beginning with Postal Quarter 2 of FY 2023, the Postal
Service proposes to apply PMI average domestic transportation unit cost
to calculate the domestic transportation costs for NSA PMI destined to
Canada. Id. at 3. Currently, the Postal Service applies PMI zone-based
domestic transportation unit costs to zone profile data for NSA PMI
destined to Canada. Id. However, in Docket No. CP2023-42, the
Commission approved the Postal Service's request to collapse zone-based
prices for PMI destined to Canada into a single country group. See
Order No. 6384. Consequently, the Postal Service explains that the
estimated zone-based unit costs that are developed in the ICRA are no
longer useful for PMI destined to Canada. Petition, Proposal Three at
6.
Finally, the Postal Service proposes several ``maintenance and
aesthetic changes that clarify and streamline the ICRA model'' in
advance of the FY 2023 Annual Compliance Report (ACR). Id. at 4. For
instance, the Postal Service proposes to remove sections of the ICRA
model that are redundant or no longer used, refresh nomenclature used
in the model, update product labels to align with the Mail
Classification Schedule (MCS), and modify or eliminate certain
workbooks to promote clarity and efficiency. Id. at 7.
Impact. According to the Postal Service, the proposed changes are
``relatively minor, because, in total, they have a percentage impact of
less than one percent.'' Id. at 1. Specifically, the Postal Service
asserts that if this proposal had been in effect in FY 2022, the net
impact on total costs of Market Dominant products and Competitive
products would have been zero. Id. at 8. Further, with respect to
International NSAs, the Postal Service represents that there would have
been no impact on Inbound International NSAs, all positive contribution
Outbound International NSAs would have remained positive, and all
negative contribution Outbound International NSAs would have remained
negative. Id.
III. Notice and Comment
The Commission establishes Docket No. RM2023-8 for consideration of
matters raised by the Petition. More information on the Petition may be
accessed via the Commission's website at <a href="https://www.prc.gov">https://www.prc.gov</a>.
Interested persons may submit comments on the Petition and Proposal
Three no later than July 12, 2023. Pursuant to 39 U.S.C. 505, Samuel
Koroma 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. RM2023-8 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 Three), filed June 7, 2023.
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2. Comments by interested persons in this proceeding are due no
later than July 12, 2023.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Samuel Koroma
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. 2023-12895 Filed 6-15-23; 8:45 am]
BILLING CODE 7710-FW-P
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