Service Standards for Market-Dominant Mail Products

AGENCY:

Postal Service^TM.

ACTION:

Proposed rule.

SUMMARY:

The Postal Service seeks public comment on proposed revisions to the service standards for market-dominant mail products. The Postal Service proposes to apply a two-day service standard to intra-Sectional Center Facility (SCF) First-Class Mail where the SCF is both the origin and destination Processing & Distribution Center or Facility (P&DC/F), and to intra-SCF and inter-SCF First-Class Mail if the combined drive time between the origin P&DC/F, destination Area Distribution Center (ADC), and destination SCF is 3 hours or less. For inter-SCF First-Class Mail within the 48 contiguous states (which include, for purposes of these standards, the District of Columbia) where the combined drive time between the origin P&DC/F, destination ADC, and destination SCF is more than 3 hours, but does not exceed 20 hours, the Postal Service proposes a three-day service standard; the same standard would apply for intra-SCF First-Class Mail if the combined drive time exceeds 3 hours and the SCF is not the origin P&DC/F. The Postal Service proposes a four-day service standard for inter-SCF First-Class Mail within the 48 contiguous states where the combined drive time between the origin P&DC/F, destination ADC, and destination SCF is more than 20 hours, but does not exceed 41 hours; and for certain First-Class Mail originating from and/or destined to certain portions of the non-contiguous states and territories. A five-day service standard would apply in the 48 contiguous states if the combined drive time between the origin P&DC/F, destination ADC, and destination SCF exceeds 41 hours, and also for other First-Class Mail originating from and/or destined to the non-contiguous states and territories. The Postal Service also proposes to apply a three-to-six-day service standard for certain Periodicals, rather than the current three-to-four-day standard, because they are merged with First-Class Mail.

DATES:

Comments must be received on or before June 22, 2021.

ADDRESSES:

Mail or deliver written comments to the Manager, Product Classification, U.S. Postal Service, 475 L'Enfant Plaza SW, Room 4446, Washington, DC 20260-3436. Email comments, containing the name and address of the commenter, may be sent to: PCFederalRegister@usps.gov, with a subject line of “Service Standards for Market-Dominant Mail Products.” Faxed comments are not accepted. All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or inappropriate for public disclosure.

You may inspect and photocopy all written comments, by appointment only, at USPS® Headquarters Library, 475 L'Enfant Plaza SW, 11th Floor North, Washington, DC 20260. These records are available for review Monday through Friday, 9 a.m. and 4 p.m. by calling 202-268-2906.

FOR FURTHER INFORMATION CONTACT:

Twana Barber, Strategic Communications Business Partner, at 202-714-3417.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

II. Proposed Revisions to Service Standards

A. Service Standards Generally

B. First-Class Mail

C. Periodicals

III. Request for Comments

I. Introduction

The Postal Service proposes to amend 39 CFR part 121 to revise the current service standards for certain First-Class Mail and Periodicals. The most significant revisions would increase the service standards for certain categories of First-Class Mail from the current one-to-three-day service standard to a one-to-five-day service standard for First-Class Mail originating and destinating within the 48 contiguous United States. Because certain Periodicals are merged with First-Class Mail, the corresponding service standards for those Periodicals would also change, from the current three-to-four-day service standard to a three-to-six-day service standard.

These revisions achieve the objectives set forth in 39 U.S.C. 3691(b), taking into account the factors of 39 U.S.C. 3691(c). Overall, they further the Postal Service's obligations under 39 U.S.C. 101 and other provisions of Title 39, U.S. Code to provide universal postal services in a prompt, reliable, and efficient manner. The current standards for First-Class Mail make it difficult for the Postal Service to provide reliable and consistent service, and also lead to high costs and inefficiencies in its transportation network. Indeed, the Postal Service has failed to meet its composite service performance target for First-Class Mail for many years, and the service provided for First-Class Mail traveling longer distances has fallen particularly short of the targets over that period. The end result is an unsustainable situation: Failure to provide reliable service, and costs that are higher than they should be. These problems will only grow as mail volumes continue to decline: Mail volumes have declined by 42 percent since FY 2007, and are projected to continue to decline.

The Postal Service is adjusting its service standards to improve its capability to deliver mail reliably and predictably for its customers, while enhancing its ability to increase operational efficiency and effectiveness consistent with best business practices. These standards will allow the Postal Service to better meet customer needs for prompt and reliable service, while supporting the maintenance of reasonable postage rates.

The standards that the Postal Service proposes address certain factors that are a consequence of trying to meet the current standards, and that contribute to service performance difficulties and high transportation costs. These revisions will enable the Postal Service to achieve a better balance of cost-effectiveness and reliability by increasing the volume of mail moved by surface transportation and reducing the volume of mail moved by air transportation. Shifting to rely more on surface transportation than air transportation will promote a better balance of both reliability and cost-effectiveness, because surface transportation is more reliable and cost-effective than air transportation. In addition, these revisions will enable the Postal Service to address inefficiencies in its surface transportation network caused by the current standards.

The revisions will therefore enable the Postal Service to improve its service capability by more realistically aligning the Postal Service's First-Class Mail service standards with the Postal Service's operational capabilities. This will result in much more precise and efficient network operations that better match current and projected mail volumes, and the Postal Service anticipates that the changes should result in significant cost savings, in addition to enhancing service reliability and predictability. This keeps costs at reasonable levels and helps to ensure affordable rates.

Pursuant to 39 U.S.C. 3661(b), the Postal Service has requested an advisory opinion from the Postal Regulatory Commission relating to these proposed revisions to 39 CFR part 121; the Commission is considering the request in Docket No. N2021-1, styled “First-Class Mail and Periodicals Service Standard Changes, 2021.” Further explanation and justification of the proposed service standards, and how they are consistent with 39 U.S.C. 3691 and other provisions of law, can be found in the materials that the Postal Service has filed in that docket.

II. Proposed Revisions to Service Standards

The Postal Service's market-dominant service standards are contained in 39 CFR part 121. The proposed revised version of 39 CFR part 121 appears at the end of this Notice. The following is a summary of the proposed revisions. In addition to the changes described below, minor edits are made to (i) conform to product name changes for USPS Marketing Mail, (ii) correct a clerical error in the subsection on Destination Entry Periodicals, (iii) delete expired provisions, and (iv) refer to common or defined terms in a more consistent manner throughout the rules.

A. Service Standards Generally

Before describing how service standards will be revised, it is important to understand how service standards are structured. Service standards contain two components: (1) A delivery day range within which mail in a given product is expected to be delivered; and (2) business rules that determine, within a product's applicable day range, the specific number of delivery days after acceptance of a mail piece by which a customer can expect that piece to be delivered, based on the 3-Digit ZIP Code prefixes associated with the piece's point of entry into the mail stream and its delivery address.

Business rules are based on critical entry times (CETs). The CET is the latest time on a particular day that a mail piece can be entered into the postal network and still have its service standard calculated based on that day (this day is termed “day-zero”). In other words, if a piece is entered before the CET, its service standard is calculated from the day of entry, whereas if it is entered after the CET, its service standard is calculated from the following day. (If the following day is a Sunday or holiday, then the service standard is calculated from the next Postal Service delivery day.) For example, if the applicable CET is 5:00 p.m., and a letter is entered at 4:00 p.m. on a Tuesday, its service standard will be calculated from Tuesday, whereas if the letter is entered at 6:00 p.m. on a Tuesday, its service standard will be calculated from Wednesday. CETs are not contained in 39 CFR part 121, because they vary based on where mail is entered, the mail's level of preparation, and other factors.

B. First-Class Mail

The current service standards force the Postal Service to over-rely on air transportation, using air cargo transportation carriers and commercial passenger air carriers. Air transportation is subject to a number of factors that make it less reliable than surface transportation, such as weather delays, network congestion, and air traffic control ground stops; air transportation also tends to cost significantly more than comparable modes of surface transportation. The addition of one or two days to current service standards for First-Class Mail would enable the Postal Service to convey a greater volume of mail within the contiguous United States by surface transportation, achieving a better balance of cost-effectiveness and on-time reliability. It would also enable the Postal Service to enhance the efficiency of its surface transportation network.

The Postal Service is therefore seeking to change some of the service standards applicable to certain First-Class Mail with respect to both of the two components of the standards. First, the Postal Service proposes modifications to the delivery day ranges within which mail in a given product is expected to be delivered. Second, the Postal Service also proposes modifications to the business rules, changing the maximum number of hours of drive time that dictates the specific number of delivery days after acceptance of a mail piece by which a customer can expect that piece to be delivered (within a product's applicable delivery day range).

In particular, the changes to service standards proposed at this time include the delivery-day range for certain First-Class Mail. Currently, a one-day (overnight) service standard is applied to intra-SCF Presort First-Class Mail pieces properly accepted at the SCF before the day-zero CET. A two-day service standard is applied to intra-SCF single-piece First-Class Mail properly accepted before the day-zero CET, as well as to inter-SCF domestic First-Class Mail pieces properly accepted before the day-zero CET if the drive time between the origin P&DC/F and destination SCF is 6 hours or less. A three-day service standard is applied to inter-SCF domestic First-Class Mail pieces properly accepted before the day-zero CET if the drive time between the origin P&DC/F and destination SCF is more than 6 hours and the origin and the destination are within the contiguous 48 states.

Under the new standards, the delivery day range for First-Class Mail within the contiguous United States will expand from the current 1-3 days, to 1-5 days. The overnight standard does not change. Among the proposed changes detailed below, a two-day service standard would apply to intra-SCF First-Class Mail where the SCF is also the origin P&DC/F, and to intra-SCF and inter-SCF domestic First-Class Mail where the combined drive time between the origin P&DC/F, destination ADC, and destination SCF is 3 hours or less; a three-day service standard for inter-SCF First-Class Mail would apply where the combined drive time between the origin P&DC/F, destination ADC, and destination SCF is 20 hours or less (but over 3 hours) within the contiguous United States, and the same three-day standard would also apply for intra-SCF single-piece First-Class Mail if the combined drive time exceeds 3 hours and the SCF is not the origin P&DC/F; a four-day service standard for inter-SCF First-Class Mail would apply where the combined drive time between the origin P&DC/F, destination ADC, and destination SCF is 41 hours or less (but over 20 hours) within the contiguous United States; and combined drive times between the origin P&DC/F, destination ADC, and destination SCF in excess of 41 hours would result in a service standard of five days.

Further, the Postal Service's regulations pertaining to the current service standards for First-Class Mail do not expressly account for the combined drive time between origin P&DC/Fs, ADCs, and SCFs, though often distribution routes encompass several such facilities. In order to clarify these service standards, the Postal Service proposes to specify, in its new service standards for First-Class Mail, that the combined drive time encompasses all such P&DC/Fs, ADCs, and SCFs.

In addition, among the changes detailed below, the Postal Service proposes certain changes to the service standards for mail originating from or destined to areas outside of the contiguous United States. A 4-day standard is proposed for First-Class Mail originating in the contiguous 48 states destined to the city of Anchorage, Alaska, the 968 3-digit ZIP Code area in Hawaii, or the 006, 007, or 009 3-digit ZIP Code areas in Puerto Rico; for First-Class Mail originating in the 006, 007, or 009 3-digit ZIP Code areas in Puerto Rico and destined to the contiguous 48 states; for First-Class Mail originating in Hawaii and destined to Guam, or vice versa; for First-Class Mail originating in Hawaii and destined to American Samoa, or vice versa; and for other First-Class Mail that has both its origin and its destination within Alaska. The Postal Service proposes a 5-day standard for other First-Class Mail originating from and/or destined to the non-contiguous states and territories.

In addition to achieving cost reductions by moving First-Class Mail within the contiguous United States from air to surface transportation, the Postal Service can further reduce its mail transportation costs for transportation by air to and from Alaska, Hawaii, and the territories through a service standard change for these categories of First-Class Mail. The Postal Service anticipates that a service standard change would enable it to reduce air transportation costs by adding flight schedule flexibility that does not exist with the current service standards and operating plan. In order to meet current service standards, the Postal Service must frequently transport mail to and from Alaska, Hawaii, and the offshore territories using more expensive air cargo transportation carriers, rather than less expensive commercial air carriers, because commercial air carriers' flight schedules frequently would not permit the Postal Service to achieve its current service standards.

C. Periodicals

Certain Periodicals are merged with First-Class Mail, and therefore their service standards are tied to the respective First-Class Mail service standards. In other words, the proposed changes to First-Class Mail service standards would result in similar changes to the corresponding service standards of the merged Periodicals.

The Postal Service is therefore proposing a related change concerning certain Periodicals. Under current standards, for end-to-end Periodicals, a three-to-four-day service standard is applied to Periodicals pieces properly accepted before the day-zero CET and merged with First-Class Mail pieces for surface transportation, with the standard specifically equaling the sum of one day plus the applicable First-Class Mail service standard (i.e., either two or three days, depending on whether the drive time is more than 6 hours). Under the new standard, a three-to-six-day service standard would be applied to Periodicals pieces properly accepted before the day-zero CET and merged with First-Class Mail pieces for surface transportation, with the standard specifically equaling the sum of 1 day plus the applicable First-Class Mail service standard.

III. Request for Comments

The Postal Service requests comments on all aspects of the proposal. In particular, the Postal Service solicits comments on the effects that the proposal could have on senders and recipients of First-Class Mail and Periodicals, as well as any potential effects on users of other mail classes. Mail users are encouraged to comment on the nature and extent of any consequences they foresee as a result of the changes described in this notice, including possible benefits such as increased reliability. Comments explaining how mail users might change their mailing practices or reliance on the mail if the proposal is implemented also are encouraged. The provision of empirical data supporting any cost-benefit analysis also would be useful. Further, the Postal Service requests mail users' views regarding the application of the policies and requirements of Title 39 of the U.S. Code, particularly sections 101, 403, 404, and 3691, to the proposal. The Postal Service intends to consider comments received in response to this notice as it determines how to amend its service standard regulations. The Postal Service has also requested an advisory opinion from the Postal Regulatory Commission pursuant to 39 U.S.C. 3661(b).

Although exempt from the notice and comment requirements of the Administrative Procedure Act (5 U.S.C. 553(b), (c)) regarding proposed rulemaking by 39 U.S.C. 410(a), the Postal Service invites public comments on the proposed revisions to 39 CFR part 121 and on the proposal generally. A more extensive discussion of the proposal and its associated network and service implications is available in the materials filed by the Postal Service with the Postal Regulatory Commission in Docket No. N2021-1, at http://www.prc.gov. If the Postal Service determines to implement the proposal, it will publish final rules in the Federal Register.

List of Subjects in 39 CFR Part 121

• Administrative practice and procedure
• Postal Service

Accordingly, for the reasons stated in the preamble, the Postal Service proposes to amend 39 CFR part 121 as follows:

PART 121—SERVICE STANDARDS FOR MARKET-DOMINANT MAIL PRODUCTS

1. The authority citation for part 121 continues to read as follows:

Authority: 39 U.S.C., 101, 401, 403, 404, 1001, 3691.

2. Revise § 121.1 to read as follows:

3. Amend § 121.2 by revising paragraphs (a)(1) and (2) and (b)(2)(ii) to read as follows:

4. Revise § 121.3 to read as follows:

5. Revise appendix A to part 121 to read as follows:

Appendix A to Part 121—Tables Depicting Service Standard Day Ranges

The following tables reflect the service standard day ranges resulting from the application of the business rules applicable to the market-dominant mail products referenced in §§ 121.1 through 121.4 (for purposes of this part, references to the contiguous states also include the District of Columbia):

Table 1. End-to-end service standard day ranges for mail originating and destinating within the contiguous 48 states and the District of Columbia.

Table 2. End-to-end service standard day ranges for mail originating and/or destinating in non-contiguous states and territories.

Table 3. Destination-entry service standard day ranges for mail to the contiguous 48 states and the District of Columbia.

Table 4. Destination entry service standard day ranges for mail to non-contiguous states and territories.