2010 Comprehensive Statement on Postal Operations - USPS.com

Chapter 1: Mission and Strategy
Product Number of Contracts
Domestic
Express Mail 4
Priority Mail 9
International
Canada Post Bilateral - Competitive 1
Global Direct 3
Global Expedited Package Services 94
Global Plus 1 & 2 2
Global Reseller Expedited Package 1
Inbound Competitive Multiproduct
Agreements with Foreign Posts
1
Inbound EMS 2
International Business Reply Service 2
CP<strong>2010</strong>-8, Competitive Products Price Changes. In November
2009, the Postal Service gave notice of changes in rates of
general applicability and of classification changes for competitive
products including Express Mail, Priority Mail, Parcel Select, Priority
Mail International, GXG, and Express Mail International. Effective
January 4, <strong>2010</strong>.
CP<strong>2010</strong>-11, Establishment of Prices and Classifications for Inbound
Air Parcel Post at UPU Rates. The Governors established inward
land rates for competitive inbound air parcels tendered by foreign
posts based on the outcome of the Universal Postal Union (UPU)
rate-setting process. This decision, filed for PRC review, authorizes
management to annually file with the PRC inward land rates resulting
from UPU Rates formulas.
CP<strong>2010</strong>-72, Competitive Product Prices Global Expedited Package
Service Contracts Non-Published Rates. This would establish
minimum and maximum prices for Global Expedited Package
Service agreements, and avert the need for separate filings of
each NSA since the minimum and maximum prices by cell would
be predetermined. At the end of FY <strong>2010</strong>, this is pending before
the PRC.
MARKET TESTS
MT<strong>2010</strong>-1, Experimental Product Samples Showcase. Consumer
packaged goods companies (CPGs) often give consumers trial-size
samples of their products as a way to build brand awareness. While
sample distribution is a large and growing industry, the Postal
Service’s “shape and weight” pricing structure makes the mailing of
samples expensive. Accordingly, CPGs tend to use less expensive
sample distribution methods, such as grocery store distribution and
bundling with newspapers. To gain information on operations, costs
and potential market, the Postal Service conducted a market test
in May <strong>2010</strong> of a parcel box containing an assortment of product
samples from multiple CPGs mailed to the companies’ target
consumers; the CPGs shared the cost of postage rather than paying
it individually.
MAIL CLASSIFICATION
MC2009-19, Modification of Mail Classification Schedule Product
Lists in Response to Order No. 154. During <strong>2010</strong> the PRC added
classification language to the Mail Classification Schedule (MCS) for
Address Enhancement Services, Address Management Services, and
Stamp Fulfillment Services.
MC<strong>2010</strong>-20, Transferring Selected Post Office Box Service
Locations to the Competitive Product List. Transferred to the
competitive product list. Post Office Box service for 49 Post Office
locations within one-half mile of a private competitor. Effective
June 17, <strong>2010</strong>.
MC<strong>2010</strong>-22, Modification of Mail Classification Schedule Regarding
Forever Stamps. Modified the MCS to allow more than one design for
Forever stamps. Effective May 6, <strong>2010</strong>.
MC<strong>2010</strong>-33, Minor Classification Changes Related to Canada
Post–United States Postal Service Contractual Bilateral Agreement
for Inbound Competitive Services. The Postal Service filed notice of
a minor classification change concerning the Bilateral Agreement,
proposing that inbound surface parcels tendered by Canada Post
would be handled as Priority Mail and subject to the rates for
Xpresspost merchandise established in this Agreement. Effective
August 23, <strong>2010</strong>.
RULEMAKINGS
RM2009-3, Consideration of Workshare Discount Rate Design.
This rulemaking concerned a provision of the law — 39 U.S.C. §
3622(e) — that limits workshare discounts to the costs avoided
by worksharing. The PRC’s final rule, issued in September <strong>2010</strong>,
concluded, among other things, that this pricing constraint on
workshare discounts: may apply within or across products,
implements a substantial portion of the policies that underlie the
Efficient Component Pricing rule, and requires the identification,
within a market of mail that is distinguished from other mail
predominantly by avoided costs due to worksharing activity. The PRC
also concluded that the selection of an appropriate base or reference
group from which to calculate the costs avoided by worksharing
depends on which of the base group’s components are likely to shift
to the workshared group in response to changes in their relative
prices. The PRC further concluded that there is a worksharing
relationship between presort First-Class Mail and Single-Piece First-
Class Mail that is metered or bears Information-Based Indicia, and
that the worksharing provision does not apply to Standard Saturation
Mail because it serves a unique market.
<strong>2010</strong> <strong>Comprehensive</strong> <strong>Statement</strong> on Postal Operations | 5