[Federal Register Volume 75, Number 66 (Wednesday, April 7, 2010)]
[Notices]
[Pages 17789-17791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-7872]
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POSTAL REGULATORY COMMISSION
[Docket No. N2010-1; Order No. 436]
Nationwide Change in Frequency of Postal Delivery
AGENCY: Postal Regulatory Commission.
ACTION: Notice.
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SUMMARY: The Postal Service has requested an advisory opinion from the
Commission on a proposed nationwide change in its longstanding 6-day
street delivery operating plan. Under the plan, Saturday street
delivery day would be eliminated, except for Express Mail deliveries.
Some corresponding changes would be made in related aspects of service
and processing. This notice addresses related preliminary procedural
steps and announces the Commission's intention to hold some hearings
outside of the Washington, DC area.
DATES: Interventions are due: April 26, 2010; prehearing conference:
April 27, 2010.
ADDRESSES: Submit notices of intervention and other documents
eletronically via the Commission's Filing Online system. Commenters who
cannot submit documents electronically should contact the person
identified in the FOR FURTHER INFORMATION CONTACT section for advice on
alternatives to electronic filing.
FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel,
202-789-6820 or [email protected].
SUPPLEMENTARY INFORMATION: On March 30, 2010, the United States Postal
Service (Postal Service) filed a request with the Postal Regulatory
Commission (Commission) for the Commission to issue an advisory opinion
under 39 U.S.C. 3661(c) for the elimination of Saturday delivery.\1\
Section 3661(c) requires that such service changes conform to the
policies reflected in title 39 of the United States Code.
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\1\ Request of the United States Postal Service for an Advisory
Opinion on Changes in the Nature of Postal Services, March 30, 2010
(Request).
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The Postal Service proposes to eliminate Saturday delivery
nationally, except for delivery of Express Mail and delivery to those
post office boxes currently providing Saturday delivery. The change
will not take place before October 1, 2010. Request at 1, 10. The
Postal Service also proposes to eliminate Saturday initial processing
of all mail but Express Mail and qualifying destination entry bulk
mail. Id. at 1.
The Postal Service bases the Request on its deteriorating financial
condition, precipitated by drastic volume decline. Id. at 3-4. If the
Postal Service is authorized to make its proposed changes, it claims
that its financial condition would be improved by a net of $3.1 billion
annually. Id. at 4. The Postal Service summarizes all of its statutory
service and financial obligations, and the need for operational
flexibility to reduce delivery days to respond to the changing needs of
the postal customer. Id. at 9-11.
The Postal Service's Request is accompanied by 11 pieces of
testimony and 12 library references.\2\ The Postal Service states that
the service changes in the Request, and the basis thereof, are examined
in detail in the Direct Testimony of Samuel Pulcrano on Behalf of the
United States Postal Service, March 30, 2010 (USPS-T-1). That testimony
indicates that collecting mail from blue street collection boxes will
also be eliminated on Saturday, except to collect overflow on an as
needed basis. USPS-T-1 at 4, 14. The Postal Service states it has taken
stakeholder views into account in
[[Page 17790]]
planning the Saturday elimination. Id. at 5-6. The Postal Service also
claims that it may, on an as needed basis, resume the delivery of
packages/parcels during the pre-Christmas rush on Saturdays in
December. Id. at 13. The Postal Service emphasizes that the proposed
changes do not affect retail operations, some bulk mail processing, and
service standards (except for adding a non-delivery day). Id. at 15-16.
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\2\ Two of the library references are provided under seal.
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The Postal Service sets forth the financial context of the Request
in the Direct Testimony of Joseph Corbett on Behalf of the United
States Postal Service, March 30, 2010 (USPS-T-2). The Postal Service
outlines its financial obligations in the face of declining volume and
concludes that the current service model is unsustainable. USPS-T-2 at
2-4. The Postal Service also describes the significant cost cutting
measures it has implemented in the last few years. Id. at 7-9. The
Postal Service concludes that the negative trends in volume and
revenue, coupled with a volume dependant network, result in a Postal
Service network that is unsustainable. Id. at 17-18.
The Postal Service outlines operational issues associated with the
elimination of Saturday delivery in the Direct Testimony of Dean J.
Granholm on Behalf of the United States Postal Service, March 30, 2010
(USPS-T-3). The Postal Service asserts it can reduce expenditures for
carriers and clerks and increase efficiency on other delivery days.
USPS-T-3 at 4-5. The Postal Service indicates that perhaps the biggest
change for retail customers is that mail accepted on Saturday will not
be processed until Monday. Id. at 7-8. The Postal Service states that
although it will probably have to change rural routes to adjust to the
workload, it intends to adhere to all of its negotiated labor agreement
requirements. Id. at 9-10. It also indicates that field managers may
have to develop plans to effectively deal with Monday holiday overflow.
Id. at 18.
The Postal Service describes the changes to mail processing in the
Direct Testimony of Frank Neri on Behalf of the United States Postal
Service, March 30, 2010 (USPS-T-4). The Postal Service describes,
generally, how outgoing and destinating mail is processed at a
facility. USPS-T-4 at 2-3. It identifies the elimination of all
Saturday outgoing mail processing activities, with the exception of
Express Mail operations, as the most significant mail processing
change. Id. at 8. The Postal Service states that mail in transit
between processing facilities will still continue to be processed. Id.
at 10. The Postal Service also forecasts mail processing operations
that may be reduced to cut costs, and operations that may increase
costs on other days as a result of heavier volume. Id. at 17-18.
The Postal Service examines the effect of a reduction in delivery
days on the transportation of mail in the Direct Testimony of Luke T.
Grossmann on Behalf of the United States Postal Service, March 30, 2010
(USPS-T-5). The Postal Service states that it will realign
transportation networks to support a 5-day delivery mail processing and
operating environment. USPS-T-5 at 5. The Postal Service estimates cost
reduction through a decreased need for surface transportation in a 5-
day environment. Id. at 6-12.
The Postal Service presents the methodology that it used to
calculate cost savings realized from moving to a 5-day delivery model
in the Direct Testimony of Michael D. Bradley on Behalf of the United
States Postal Service, March 30, 2010 (USPS-T-6). The Postal Service
provides an overview of previous estimates employed by the Commission
and the Postal Service to calculate savings from a 5-day delivery
environment. USPS-T-6 at 2-3. The Postal Service also states that it
discards the volume variability analysis, which generally has formed a
basis for cost estimates, because the change to 5-day delivery is an
operational change, not a volume change. Id. at 3. The Postal Service
examines and quantifies the direct and indirect costs identified in
previous witness testimonies, and cost savings resulting from moving to
a 5-day environment. Id. at 7-53.
The Postal Service estimates the annualized cost savings, expressed
in 2009 dollars, in the Direct Testimony of Jeff Colvin on Behalf of
the United States Postal Service, March 30, 2010 (USPS-T-7). This
testimony builds on the methods described in USPS-T-6 by applying them
to the Postal Service's costs. USPS-T-7 at 2-3. It develops the
calculated net annual savings (after reduction of contribution from
loss of volume) and reports the figure as $3.103 billion. Id. at
Attachment 3. The Postal Service states that the estimate may be
affected by future increases in hourly labor costs, input unit costs,
delivery points, and reduced mail volumes. Id. at 17.
The Postal Service provides an overview of the market research
activities it conducted to gauge consumer and business impact from a
reduction in delivery in the Direct Testimony of Rebecca Elmore-Yalch
on Behalf of United States Postal Service, March 30, 2010 (USPS-T-8).
The Postal Service describes the qualitative methods it used to garner
consumer and business opinion in the form of focus groups and
interviews. USPS-T-8 at 4-11. The Postal Service also describes the
quantitative research it employed utilizing surveys. Id. at 12-29. The
Postal Service attempts to quantify the affect on use of postal
products of moving from a 6-day to a 5-day environment. Id. at 30.
The Postal Service provides an assessment of the reactions of
customers and commercial organizations to the proposed 5-day change and
estimated volume and revenue impact in the Direct Testimony of Gregory
M. Whiteman on Behalf of United States Postal Service, March 30, 2010
(USPS-T-9). The Postal Service states that most consumers and small
commercial organizations thought that elimination of Saturday delivery
would have little impact on their consumer or commercial requirements.
USPS-T-9 at 1. The Postal Service also indicates that most respondents
thought they would adapt and the adaptation would not be difficult. Id.
Quantitatively, the Postal Service estimates the reduction of volume of
0.7 percent, producing a loss of $428 million in revenue. Id. at 2.
The Postal Service describes the changes to ``start-the-clock'' and
``stop-the-clock'' events used for service performance measurements
that would change as a result of 5-day delivery in the Direct Testimony
of Thomas G. Day on Behalf of the United States Postal Service, March
30, 2010 (USPS-T-10). The Postal Serve explains that elimination of
outbound mail processing on Saturday affects when the ``clock starts to
run'' for service performance standards. USPS-T-10 at 3. Likewise, the
elimination of Saturday delivery delays the ``stop-the-clock'' event
for those mail pieces currently being delivered on Saturday. Id. The
testimony presents various ``start-the-clock'' examples for different
products the Postal Service offers, and suggests that each may require
realignment as a result of moving to a 5-day environment. Id. at 6-9.
The Postal Service describes how it will inform and prepare
customers for the implementation of 5-day delivery and related service
changes in the Direct Testimony of Stephen M. Kearney on Behalf of the
United States Postal Service, March 30, 2010 (USPS-T-11). The Postal
Service recognizes that the ability of customers to adjust will depend
on the Postal Service's actions taken to clearly and effectively inform
them. USPS-T-11 at 1. The Postal Service states that it will use
multiple channels to reach stakeholders and garner feedback, including
Customer
[[Page 17791]]
Advisory Councils, the National Postal Forum, print and broadcast news
media, a dedicated micro-Web site, and customer outreach. Id. at 2-7.
The Request, according to the Postal Service, contains changes that
will affect every stakeholder, internal and external, of the Postal
Service. See id. at 1, 7.
The Request and all supporting public materials are on file in the
Commission's docket room for inspection during regular business hours,
and are available on the Commission's Web site at http://www.prc.gov.
Further procedures. Section 3661(c) of title 39 requires that the
Commission afford an opportunity for formal, on-the-record hearing of
the Postal Service's Request under the terms specified in sections 556
and 557 of title 5 of the United States Code before issuing its
advisory opinion. All interested persons are hereby notified that
notices of intervention in this proceeding shall be due on or before
April 26, 2010. See 39 CFR 3001.20 and 3001.20a. It is the Commission's
intent to hold hearings for the receipt of evidence in this proceeding.
At this time, the Commission cannot anticipate the duration, or
even the exact form, proceedings on this matter will take. Participants
who wish to offer their views on these issues may do so in their
interventions. Due to the nature of this Initiative, the Commission
also will hold public hearings outside of Washington, D.C. Dates and
locations of these public hearings will be announced subsequently. The
Commission urges participants to carefully consider, prior to the
prehearing conference, the justification for any proposed discovery
period.
The Commission will hold a prehearing conference in this docket on
April 27, 2010 at which these questions will be discussed.
Public Representative. Section 3661(c) of title 39 requires the
participation of an ``officer of the Commission who shall be required
to represent the interests of the general public'' in these
proceedings. Patricia A. Gallagher, Kenneth Moeller, and Larry Fenster
are designated to serve as Public Representatives to represent the
interests of the general public in this proceeding. The foregoing
Public Representatives shall direct the activities of Commission
personnel assigned to assist them and, at an appropriate time, shall
provide the names of these employees for the record. Neither the Public
Representatives nor the assigned personnel shall participate in or
advise as to any Commission decision in this proceeding, other than in
their designated capacity.
It is ordered:
1. The Commission establishes Docket No. N2010-1 to consider the
Postal Service Request referred to in the body of this order.
2. The Commission will sit en banc in this proceeding.
3. Notices of intervention are due no later than April 26, 2010.
4. A prehearing conference is scheduled for April 27, 2010, at
10:00 a.m., in the Commission's hearing room.
5. Pursuant to 39 U.S.C. 505 and 3661(c), the Commission appoints
Patricia A. Gallagher, Kenneth Moeller, and Larry Fenster to represent
the interests of the general public in this proceeding.
6. The Secretary shall arrange for publication of this notice in
the Federal Register.
By the Commission.
Shoshana M. Grove,
Secretary.
[FR Doc. 2010-7872 Filed 4-6-10; 8:45 am]
BILLING CODE 7710-FW-S