Change in Rates and Classes of General Applicability for Competitive Products

AGENCY:

Postal Service^TM.

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 for the USPS Loyalty Program.

DATES:

Applicable date: August 1, 2020.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Reed, 202-268-3179.

SUPPLEMENTARY INFORMATION:

On May 28, 2020, pursuant to their authority under 39 U.S.C. 3632, the Governors of the Postal Service established prices and classification changes for Priority Mail Express and Priority Mail to implement a new USPS Loyalty Program. The Governors' Decision and the record of proceedings in connection with such decision are reprinted below in accordance with section 3632(b)(2).

Decision of the Governors of the United States Postal Service on Changes in Rates of General Applicability for Competitive Products (Governors' Decision No. 20-2)

May 28, 2020

Statement of Explanation and Justification

Pursuant to 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 certain competitive products, specifically Priority Mail Express and Priority Mail, and such changes in classifications as are necessary to implement the new prices. The changes are described generally below, with a detailed description of the changes in the attachment hereto. The attachment includes the draft Mail Classification Schedule sections with classification changes in legislative format.

As shown in the nonpublic annex being filed under seal herewith, the changes we establish should enable each affected 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 collectively to contribute a minimum of 9.1 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 are in accordance with 39 U.S.C. 3632-3633 and 39 CFR 3015.2.

These price and classification changes implement a new Loyalty Program for postal customers that ship Priority Mail Express and Priority Mail packages via Click-N-Ship. Incentives are established for both new and existing Click-N-Ship customers. The Loyalty Program is designed to encourage small and micro businesses to use Click-N-Ship and increase their shipping spend over the coming year. A portion of the program is also designed to provide a credit to these customers who experienced a volume decline as a result of the ongoing COVID-19 pandemic. The various incentives and tiers for the Loyalty Program are set forth in the Mail Classification Schedule attachment.

Order

The changes in prices and classes set forth herein shall be effective on August 1, 2020, or as soon as practicable thereafter. We direct the Secretary to have this decision published in the Federal Register in accordance with 39 U.S.C. 3632(b)(2), and direct management to file with the Postal Regulatory Commission appropriate notice of these changes.

By The Governors:

/s/

Robert M. Duncan,

Chairman, Board of Governors.

United States Postal Service Office of the Board of Governors

Certification Of Governors' Vote On Governors' Decision No. 20-2

Consistent with 39 U.S.C. 3632(a), I hereby certify that, on May 28, 2020, the Governors voted on adopting Governors' Decision No. 20-2, and that a majority of the Governors then holding office voted in favor of that Decision.

/s/

Date: May 28, 2020

Michael J. Elston,

Secretary of the Board of Governors.

2105 Priority Mail Express

2105.1 Description

a. Priority Mail Express service provides a high speed, high reliability service. It is available from designated acceptance locations to designated postal facilities for delivery to the recipient or, optionally, pickup by the recipient. Drop-off, pick-up, and delivery times are specified by the Postal Service for particular locations and days of the week. Delivery is either overnight, on the second day, or on the second delivery day (the next delivery day following the second day), for particular locations and days of the week.

b. Any matter eligible for mailing may, at the option of the mailer, be mailed by Priority Mail Express service.

c. A receipt showing the time and date of mailing will be provided to the mailer upon acceptance of Priority Mail Express by the Postal Service. The receipt serves as proof of mailing. Claims for refunds of postage for not meeting applicable standards must be filed within the period of time and under terms and conditions specified in the Domestic Mail Manual.

d. Priority Mail Express pieces are sealed against postal inspection and shall not be opened except as authorized by law.

e. Priority Mail Express pieces that are undeliverable-as-addressed are entitled to be forwarded or returned to the sender without additional charge.

f. Insurance, up to $100.00, is included in Priority Mail Express postage. Additional insurance (Priority Mail Express Insurance) is available for an additional charge, depending on the value and nature of the item sent by Priority Mail Express service.

2105.2 Size and Weight Limitations

2105.3 Minimum Volume Requirements

2105.4 Price Categories

The following price categories are available for the product specified in this section:

• Retail

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

○ Loyalty Program—Applies to qualifying business customers who use Click-N-Ship

• Commercial Base—Prices are available to customers who use specifically authorized postage payment methods.

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

• Commercial Plus—Prices are available to customers who use specifically authorized postage payment methods and mail over 5,000 pieces annually.

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

2105.5 Optional Features

The following additional postal services may be available in conjunction with the product specified in this section:

• Pickup On Demand Service
• Sunday/Holiday Delivery
• 10:30 a.m. Delivery
• Ancillary Services (1505)

○ Address Correction Service (1505.1)

○ Collect On Delivery (1505.7)

○ Priority Mail Express Insurance (1505.9)

○ Return Receipt (1505.13)

○ Special Handling (1505.18)

• Competitive Ancillary Services (2545)

○ Adult Signature (2545.1)

○ Package Intercept Service (2545.2)

○ Premium Data Retention and Retrieval Service (2545.3)

2105.6 Prices

Retail Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Loyalty Program

Upon the initiation of the Loyalty Program, all USPS business customers who use Click-N-Ship will be automatically enrolled in the Basic tier of the Loyalty Program, thereby earning a $40 credit for every $500 combined spent at Priority Mail Express Retail and Priority Mail Retail rates.

Beginning on January 1, 2021, and on every January 1 thereafter, all USPS business customers who use Click-N-Ship will be enrolled in one of the following three tiers of the Loyalty Program, based on their combined shipping spend at Priority Mail Express Retail and Priority Mail Retail rates in the previous calendar year, as follows:

• Basic (no minimum spend):

Earn $40 credit for every $500 spent

• Silver (at least $10,000 spend):

Earn $50 credit for every $500 spent

• Gold (at least $20,000 spend):

Qualify for Commercial Base Pricing

In the first year of the Loyalty Program, any new USPS business customer who uses Click-N-Ship will receive a one-time $40 “Welcome Bonus” credit upon shipping at least $500 combined at Priority Mail Express Retail and Priority Mail Retail rates.

All participants in the Loyalty Program will be eligible to receive an additional one-time $20 credit for shipping during the first two months of the program, which will be applied once participants ship at least $500 combined at Priority Mail Express Retail and Priority Mail Retail rates.

All credits must be redeemed within one year from the date of issuance.

Commercial Base Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Commercial Plus Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Pickup On Demand Service

Add $24.00 for each Pickup On Demand stop.

Sunday/Holiday Delivery

Add $12.50 for requesting Sunday or holiday delivery.

10:30 a.m. Delivery

Add $5.00 for requesting delivery by 10:30 a.m.

IMpb Noncompliance Fee

Add $0.20 for each IMpb-noncompliant parcel paying commercial prices, unless the eVS Unmanifested Fee was already assessed on that parcel.

eVS Unmanifested Fee

Add $0.20 for each unmanifested parcel paying commercial prices, unless the IMpb Noncompliance Fee was already assessed on that parcel.

2110 Priority Mail

2110.1 Description

a. Priority Mail service provides expeditious handling and transportation.

b. Any matter eligible for mailing may, at the option of the mailer, be mailed by Priority Mail service for expeditious handling and transportation.

c. Priority Mail pieces are sealed against postal inspection and shall not be opened except as authorized by law.

d. Priority Mail pieces that are undeliverable-as-addressed are entitled to be forwarded or returned to the sender without additional charge.

e. Up to $50.00 of General Insurance coverage is included at no additional cost in the price of Priority Mail pieces that bear an Intelligent Mail package barcode or retail tracking barcode. This does not apply to Priority Mail pieces sent non-prepaid returns, Priority Mail Open and Distribute, or Premium Forwarding Service.

f. Up to $100.00 of General Insurance coverage is included at no additional cost in the price of Priority Mail pieces that bear an Intelligent Mail package barcode and for which the mailer pays Commercial Plus prices or uses ePostage, Electronic Verification System, Hardcopy Manifest, or an approved Manifest Mailing System. This does not apply to Priority Mail pieces sent using non-prepaid returns, Priority Mail Open and Distribute, or Premium Forwarding Service.

g. Return parcels may be sent without prepayment of postage if authorized by the returns customer, who agrees to pay the postage.

2110.2 Size and Weight Limitations

2110.3 Minimum Volume Requirements

2110.4 Price Categories

The following price categories are available for the product specified in this section:

• Retail

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Flat Rate Boxes—Boxes provided or approved by the Postal Service

○ Regional Rate Boxes

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

○ Loyalty Program—Applies to qualifying business customers who use Click-N-Ship

• Commercial Base—Available to mailers who use specifically authorized postage payment methods

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Flat Rate Boxes—Boxes provided or approved by the Postal Service

○ Regional Rate Boxes

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

• Commercial Plus—Available to mailers who use specifically authorized postage payment methods and whose annual volume exceeds 50,000 pieces or 600 open and distribute containers for parcels, or 5,000 letter-sized pieces excluding the Padded Flat Rate Envelope

○ Zone/Weight—Prices are based on weight and zone

○ Flat Rate Envelopes—Envelope provided or approved by the Postal Service

○ Flat Rate Boxes—Boxes provided or approved by the Postal Service

○ Regional Rate Boxes

○ Dimensional Weight—Applies to parcels in zones local through 9 that exceed one cubic foot

• Commercial Plus Cubic—Prices are available to customers who use specifically authorized postage payment methods and whose annual Priority Mail volume exceeds 50,000 pieces

○ Zone/Cubic Volume

• Open and Distribute (PMOD)—Prices are available to customers who use specifically authorized postage payment methods

○ Processing Facilities—Received at designated processing facilities, or other equivalent facility

• Half Tray, Full Tray, EMM Tray, or Flat Tub

○ DDU—Received at designated Destination Delivery Unit, or other equivalent facility

• Half Tray, Full Tray, EMM Tray, or Flat Tub

2110.5 Optional Features

The following additional postal services may be available in conjunction with the product specified in this section:

• Pickup On Demand Service
• Ancillary Services (1505)

○ Address Correction Service (1505.1)

○ Business Reply Mail (1505.3)

○ Certified Mail (1505.5)

○ Certificate of Mailing (1505.6)

○ Collect On Delivery (1505.7)

○ USPS Tracking (1505.8)

○ Insurance (1505.9)

○ Registered Mail (1505.12)

○ Return Receipt (1505.13)

○ Return Receipt for Merchandise (1505.14)

○ Signature Confirmation (1505.17)

○ Special Handling (1505.18)

• Competitive Ancillary Services (2545)

○ Adult Signature (2545.1)

○ Package Intercept Service (2545.2)

○ Premium Data Retention and Retrieval Service (2545.3)

2110.6 Prices

Retail Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Loyalty Program

Upon the initiation of the Loyalty Program, all USPS business customers who use Click-N-Ship will be automatically enrolled in the Basic tier of the Loyalty Program, thereby earning a $40 credit for every $500 combined spent at Priority Mail Express Retail and Priority Mail Retail rates.

Beginning on January 1, 2021, and on every January 1 thereafter, all USPS business customers who use Click-N-Ship will be enrolled in one of the following three tiers of the Loyalty Program, based on their combined shipping spend at Priority Mail Express Retail and Priority Mail Retail rates in the previous calendar year, as follows:

• Basic (no minimum spend):

Earn $40 credit for every $500 spent

• Silver (at least $10,000 spend):

Earn $50 credit for every $500 spent

• Gold (at least $20,000 spend):

Qualify for Commercial Base Pricing

In the first year of the Loyalty Program, any new USPS business customer who uses Click-N-Ship will receive a one-time $40 “Welcome Bonus” credit upon shipping at least $500 combined at Priority Mail Express Retail and Priority Mail Retail rates.

All participants in the Loyalty Program will be eligible to receive an additional one-time $20 credit for shipping during the first two months of the program, which will be applied once participants ship at least $500 combined at Priority Mail Express Retail and Priority Mail Retail rates.

All credits must be redeemed within one year from the date of issuance.

Commercial Base Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Commercial Plus Dimensional Weight

In Zones 1-9 (including local), parcels exceeding one cubic foot are priced at the actual weight or the dimensional weight, whichever is greater.

For box-shaped parcels, the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) of the parcel, and dividing by 166.

For irregular-shaped parcels (parcels not appearing box-shaped), the dimensional weight (pounds) is calculated by multiplying the length (inches) times the width (inches) times the height (inches) at the associated maximum cross-sections of the parcel, dividing by 166, and multiplying by an adjustment factor of 0.785.

Open and Distribute (PMOD)

a. DDU

b. Processing Facilities

Pickup On Demand Service

Add $24.00 for each Pickup On Demand stop.

IMpb Noncompliance Fee

Add $0.20 for each IMpb-noncompliant parcel paying commercial prices, unless the eVS Unmanifested Fee was already assessed on that parcel.

eVS Unmanifested Fee

Add $0.20 for each unmanifested parcel paying commercial prices, unless the IMpb Noncompliance Fee was already assessed on that parcel.