April/May, 2002

New Rates and Fees Effective June 30, 2002

Governors Approve Postal Rate Commission’s Recommendation

On April 8, 2002, the Governors of the Postal Service acted on the recommendations of the Postal Rate Commission and approved the changes in domestic rates, fees, and classifications proposed in the rate case settlement agreement. The Board of Governors has directed these changes become effective on June 30, 2002.

The following information is an overview of the R2001-1 changes organized by class of mail or special service category. Complete Domestic Mail Manual (DMM) changes and detailed information can be found in the Federal Register final rule at www.usps.com/ratecase and in the special May 9, 2002, Postal Bulletin.

First-Class Mail Highlights

First-Class Mail items are matter that is wholly or partially in handwriting or typewriting, or that has the character of actual and personal correspondence. Any matter eligible for mailing may, at the option of the mailer, be mailed using First-Class Mail service. First-Class Mail items are sealed against inspection and can include bills, statements of account, letters, and cards.

Overall, First-Class Mail rates will increase an average of 7.9 percent. The single-piece 1-ounce First-Class Mail rate will increase from $0.34 to $0.37, and the single-piece card rate from $0.21 to $0.23. The additional ounce rate for single-piece First-Class Mail will remain at $0.23. There will be a lower additional ounce rate for Presorted and automation First-Class Mail.

Business mailers will get larger automation presort discounts. The carrier route automation discount and the nonautomation presort discount will remain at the current levels. The proposed increase in automation discounts and the proposed half-cent reduction in the "workshare" additional-ounce rate will result in more attractive workshare incentives, especially for large-volume First-Class Mail service users who presort and mail heavier pieces.

The presort mailing fee will increase from $125 to $150.

Lower Additional Ounce Rate for Presorted and Automation Rates

Currently, there is a single additional ounce rate for all pieces mailed at First-Class Mail rates. Pieces mailed at single-piece rates will pay $0.23 for each additional ounce; pieces mailed at any workshared rate will pay $0.225 for each additional ounce. The separate heavy piece discount still applies for Presorted and automation pieces over 2 ounces.

Automation Basic Rate Split Into Two New Rates

For automation cards and letters, the current rate structure contains a

5-digit, 3-digit, and basic rate. The new rate structure will split the basic rate into an automated area distribution center (AADC) rate (for all pieces in an AADC tray) and a mixed AADC rate (for all pieces in a mixed AADC tray). The AADC rate also will apply to pieces in a less-than-full 3-digit tray. There are no sortation changes for automation cards and letters. The 5-digit sort level will still be optional; all other sort levels will be required.

For automation flats, the current rate structure contains a 5-digit, 3-digit, and basic rate. The new rate structure will split the basic rate into an area distribution center (ADC) rate (for all pieces in an ADC package or tray) and a mixed ADC rate (for all pieces in a mixed ADC package or tray). The ADC rate also will apply to pieces in a less-than-full 3-digit tray. There are no sortation changes for automation flats. The 5-digit sort level still will be optional; all other sort levels will be required.

Nonmachinable Surcharge

The definition of the current nonstandard surcharge will be expanded to include certain physical criteria that could make a mailpiece nonmachinable. Pieces that are nonmachinable are excluded from automated processing and must be handled manually. Nonmachinable pieces also may impede mail flow or damage the mail or mail processing equipment. Manual pieces are considerably more costly to process than machinable letters.

The criteria for nonmachinable letter-size pieces will be listed in new DMM C050.2.2 (see list following Standard Mail highlights). The nonmachinable surcharge will apply to single-piece and Presorted rate letters that weigh 1 ounce or less and meet one or more of the criteria in that section. Machinable pieces are not subject to any restrictions regarding the OCR read area or barcode clear zone.

The nonmachinable surcharge also will apply to single-piece, Presorted, and automation rate nonletters (flats and parcels) that weigh 1 ounce or less if any one of the following applies:

(a) The piece is greater than 1/4-inch thick.

(b) The length is more than 11-1/2 inches or the height is more than 6-1/8 inches.

(c) The aspect ratio (length divided by height) is less than 1.3 or more than 2.5.

The nonmachinable surcharge will be $0.12 for single-piece rate pieces, $0.055 for Presorted rate, and $0.055 for automation rate flat-size mail.

The nonmachinable criteria in C050.2.2 do not apply to pieces mailed at any card rate.

The nonmachinable surcharge will apply to letter-size pieces (but not card-rate pieces) for which the mailer has chosen the manual only (do not automate) option. For card-rate pieces, a mailer can specify manual handling, but they will not be charged a surcharge.

This change is consistent with the addition of a nonmachinable surcharge for Standard Mail service.

In conjunction with this change, trays of machinable and nonmachinable letters will be prepared and labeled differently. The preparation for machinable letters will be similar to the current preparation for upgradable letters (e.g., no packaging, optional 5-digit sort level); the preparation for nonmachinable pieces will be similar to the current package-based preparation for Presorted letters. The current weight limit for upgradable letters (2.5 ounces) will be replaced with a weight limit of 3.3 ounces for machinable letters. Letters heavier than 3.3 ounces and less than 1/4-inch thick will use the nonmachinable preparation and labeling but will not pay the surcharge (because it applies only to pieces that weigh 1 ounce or less).

On tray labels, the current "NON BC" (not barcoded) designation will be replaced with one of two designations: "MACH" for machinable pieces or "MANUAL" for nonmachinable pieces. Although card-rate pieces will not be subject to the surcharge, mailers will be required to show on the tray label whether or not those pieces are machinable (for instance, a double card that is not tabbed is not machinable). The "MANUAL" designation will help the Postal Service direct trays of mail to the appropriate mail processing operation. As is currently required, mailers who choose the "do not automate" option will show "MANUAL" on Line 2 of the tray label.

Barcoded tray labels are allowed, but are not required, for trays of First-Class Mail machinable letters. Zebra codes must not be used on trays of First-Class Mail machinable letters. (Zebra codes indicate that the tray contains automation rate prebarcoded mail.)

There are no preparation or labeling changes for Presorted flats or parcels subject to the surcharge. Mail preparation instructions for Presorted letter–size pieces subject to the nonmachinable surcharge will be included in DMM M130. Preparation instructions for automation flats subject to the nonmachinable surcharge will not change (see current DMM M820).

The nonmachinable surcharge will be assessed on any piece mailed out as a different class of mail and returned as a First-Class Mail item (for instance, a Standard Mail item endorsed "Return Service Requested") if the piece weighs 1 ounce or less and meets the criteria for nonmachinability in C050.2.2. Pieces returned at First-Class Mail card rates will not be subject to the nonmachinable surcharge.

The nonmachinable surcharge will take effect when new rates are implemented; however, mailers have until January 1, 2003, to comply with the mail preparation and tray labeling changes.

Delivery Confirmation and Signature Confirmation for First-Class Mail Parcels

The Postal Service will add two new special service options for First-Class Mail parcels: Delivery Confirmation and Signature Confirmation. Both services will be available in retail and electronic options. The fees for Delivery Confirmation will be $0.55 for the retail option and $0.13 for the electronic option. The fees for Signature Confirmation will be $1.80 for the retail option and $1.30 for the electronic option.

For the purposes of adding Delivery Confirmation or Signature Confirmation to First-Class Mail and Package Services parcels, a parcel will be defined as any piece that has an address side with sufficient surface area to fully display the delivery address, return address, postage, markings and endorsements, and the Delivery Confirmation or Signature Confirmation label. The parcel will be required to be in a box or, if not in a box, must be more than 3/4-inch thick at its thickest point.

This definition will provide mailers many different packaging options if they want to use Delivery Confirmation or Signature Confirmation for their First-Class Mail parcels.

Priority Mail Highlights

Priority Mail is defined as First-Class Mail weighing more than 13 ounces and, at the mailer’s option, any other matter (including regular First-Class Mail) weighing 13 ounces or less. Priority Mail consists of a variety of items, from lightweight documents to heavier merchandise.

Overall, Priority Mail rates will increase an average of 13.5 percent.

Zoned Rates for Pieces Over 1 Pound

As with all classes of mail, Priority Mail rates must cover the increasing costs associated with processing, transportation, and delivery. All weight increments over 1 pound will be zoned to more accurately reflect actual costs to the Postal Service for transportation and handling. The 1-pound rate will remain unzoned.

Flat-Rate Envelope Priced at the 1-Pound Rate

Currently, the rate for the Priority Mail flat-rate envelope is the same as the 2-pound rate. Because all rates from 2 to 5 pounds will be zoned, the flat-rate envelope will now be charged at the 1-pound rate. The rate for the flat-rate envelope will decrease from $3.95 to $3.85, but the size of the envelope will remain the same. The Priority Mail flat-rate envelope will continue to be available from the Postal Service.

Effective June 30, 2002, Priority Mail flat-rate envelopes with 2-pound rate markings cannot be used.

Express Mail Highlights

Express Mail is a premium service offering guaranteed next-day and second-day delivery nationwide.

The service options are:

• Next Day and Second Day Post Office to Addressee service
• Next Day and Second Day Post Office to Post Office service
• Custom Designed service
• Express Mail Military service

Overall, Express Mail rates will increase an average of 9.4 percent.

The Post Office to Addressee service 1/2-pound rate increases from $12.25 to $13.65.

Flat-Rate Envelope Priced at the 1/2-Pound Rate

The most significant change to Express Mail service will be to price the flat-rate envelope at the 1/2-pound rate which is the lowest available rate for each Express Mail service offering. The rate for the flat-rate envelope will decrease for Post Office to Addressee service from $16.25 to $13.65, but the size of the envelope will remain the same. The Express Mail flat-rate envelope will continue to be available from the Postal Service.

Indemnity Reduced

The indemnity automatically included in the price of Express Mail will be reduced from $500 to $100 for both merchandise and document reconstruction. This adjustment will more closely align Express Mail Indemnity with general industry practice. The fee for every $100 increment of additional merchandise insurance desired above the standard $100 and up to $5,000 will be $1.

Pickup Service

The fee for pickup service, available for Express Mail, Priority Mail, and Parcel Post, will increase from $10.25 to $12.50 (per pickup).

Periodicals Highlights

Periodicals mail consists of a wide range of periodical publications — principally magazines, newspapers, newsletters, and bulletins. To mail at Periodicals rates, each periodical publication must be authorized by the U.S. Postal Service.

Periodicals mail consists of two subclasses — Outside-County and In-County. The overall average increase for Periodicals will be 10 percent. Outside-County postage will increase on average 10.3 percent and In-County postage will increase on average 1.7 percent. Original entry and additional entry application fees will increase from $350 to $375 and from $50 to $60, respectively, while the fees for reentry and news agent registry will remain at $40.

New Destination Area Distribution Center Discount (DADC)

A new destination area distribution center (DADC) advertising pound rate and a per piece discount for each Outside-County addressed piece. Destination rates and discounts will be limited to mail entered at the actual destination entry facility (DADC, DSCF, and DDU), unless designated otherwise by the Postal Service.

New Pallet Discounts

New pallet discounts of $0.005 per piece have been established for each addressed nonletter-size piece (flat-size and irregular parcel) prepared in packages on pallets that contain at least 250 pounds of mail. This discount will apply to all pallet levels. The discount will not apply to pieces in sacks on pallets or in trays on pallets.

A new $0.015 destination entry per piece pallet discount will apply to each addressed piece of nonletter-size mail (flats and irregular parcels) prepared in packages on any destination entry pallet of at least 250 pounds of mail.

Palletized addressed pieces could claim either the $0.005 or the $0.015 per piece discount (depending on the entry point), but not both.

Periodicals Ride-Along

The ride-along experiment will become a permanent classification. There will be no changes in the current standards for eligibility. However, publishers will no longer be required to complete a data collection questionnaire, provide a sample in addition to the marked copy, or submit an additional copy of Form 3541-X (postage statement). Form 3541-X will be discontinued and mailers will use Form 3541.

The standards for ride-along will be relocated to new DMM E260. The ride-along rate will increase from $0.10 to $0.124 per piece.

Returned Pieces

In conjunction with the nonmachinable surcharge, any Periodical returned to the sender at First-Class Mail rates is subject to the nonmachinable surcharge if the piece weighs 1 ounce or less and meets any of the nonmacinability criteria in new DMM C050.2.2.

Standard Mail Highlights

Standard Mail consists of mailable matter that is neither mailed nor required to be mailed as First-Class Mail, is not entered as Periodicals, and weighs less than 16 ounces.

Overall, Standard Mail rates will increase an average of 7.1 percent. On average, rates for flat-size mail will increase more than rates for letter-size mail. Regular and nonprofit rates will increase an average of 7.5 percent.

Enhanced carrier route (ECR) will increase an average of 6.2 percent. Greater destination entry discounts will provide an incentive for mailers to use their own or third-party transportation to move Standard Mail closer to the point of delivery.

The annual mailing fee will increase from $125 to $150.

Automation Basic Letter Rate Split Into Two New Rates

For automation letter-size pieces, the current Standard Mail regular rate structure contains 5-digit, 3-digit, and basic rates. The new rate structure splits the basic rate into an AADC rate and a mixed AADC rate. Unlike in First-Class Mail, where the ADC and mixed ADC rates will apply to automation flats, there will not be any changes to the rate structure for Standard Mail automation flats.

Nonmachinable Surcharge

A nonmachinable surcharge will apply to some Standard Mail letter-size pieces. The criteria for nonmachinability for letter-size pieces is listed in new DMM C050.2.2 (see list following Standard Mail highlights). The nonmachinable surcharge will apply to Presorted rate letter-size pieces (including cards) that weigh 3.3 ounces or less and meet one or more of the criteria in that section. Machinable pieces are not subject to any restrictions regarding the OCR read area or barcode clear zone. Unlike in First-Class Mail, where the nonmachinable surcharge will apply to flats, the Postal Service is not adding a nonmachinable surcharge to Standard Mail flats since flats already have separate nonletter rates. The nonmachinable surcharge will not apply to pieces mailed at any ECR rate or to automation rate letters (which are by definition machinable). The surcharge will apply to letter-size pieces for which the mailer has chosen the manual only (do not automate) option.

This classification change is consistent with the nonmachinable surcharge for First-Class Mail.

In conjunction with this change, trays of machinable and nonmachinable letters will be prepared and labeled differently. The preparation for machinable letters will be similar to the current preparation for upgradable letters (e.g., no packaging, optional 5-digit sort level). The preparation for nonmachinable pieces will be similar to the current package-based preparation for Presorted letters. The current weight limit for upgradable letters (2.5 ounces) will be replaced with a weight limit of 3.3 ounces for machinable letters.

On tray labels, the current "NON BC" (not barcoded) designation will be replaced with one of two designations: "MACH" for machinable pieces or "MANUAL" for nonmachinable pieces. The "MANUAL" designation will help the Postal Service direct the trays of mail to the appropriate mail processing operation. Mailers who choose the "do not automate" option will show "MANUAL" on Line 2 of the tray label, as is currently required.

Barcoded tray labels are allowed, but are not required, for trays of Standard Mail machinable letters. Zebra codes must not be used on trays of Standard Mail machinable letters (Zebra codes indicate that the tray contains automation rate pre-barcoded mail).

In a mailing of nonmachinable letter-size pieces, residual Standard Mail pieces sent at First-Class Mail rates will be subject to the First-Class Mail nonmachinable surcharge only if the pieces weigh 1 ounce or less. Heavier pieces will not be subject to the First-Class Mail nonmachinable surcharge, even though those same pieces would have been subject to the Standard Mail nonmachinable surcharge if they had remained in the Standard Mail mailing. Additionally, residual Standard Mail pieces mailed at First-Class Mail card rates will not be subject to the nonmachinable surcharge.

Mailers should note that residual pieces from a Standard Mail automation flats mailing could be subject to the nonmachinable surcharge if the residual is mailed at Presorted letter piece rates. For example, a barcoded piece that is 8-1/2 by 5-1/2 inches and bears an address parallel to the shorter edge could be mailed as an automation flat. Pieces in this job that cannot be barcoded would fall to Presorted rates; the mailer would then have the option of paying the letter piece rate plus the nonmachinable surcharge (because the address is parallel to the shorter dimension) or the nonletter piece rate.

Standard Mail pieces that are returned as First-Class Mail (for instance, an undeliverable piece endorsed "Return Service Requested") will be charged the nonmachinable surcharge if the piece weighs 1 ounce or less and meets the criteria for nonmachinability in new DMM C050.2.2. The nonmachinable surcharge also will be figured into the calculation for the weighted fee for pieces that weigh 1 ounce or less. The nonmachinable surcharge will not be charged on pieces returned at First-Class Mail card rates.

The nonmachinable surcharge will take effect when new rates are implemented; however, mailers have until January 1, 2003, to comply with the packaging and tray labeling changes.

Heavier Letters Are Eligible for Automation Rates

The maximum weight for Standard Mail regular automation letters will increase from 3.3 ounces to 3.5 ounces (inclusive). This change applies to regular and nonprofit automation letters and to automation carrier route letters. The rate charged for pieces that weigh between 3.3 and 3.5 ounces differs slightly from the rate for pieces that weigh 3.3 ounces or less.

Mailers who choose to take this discount for heavy automation letters will be required to use a new postage statement designed for this purpose. On the permit imprint postage statement, the discount is pre-calculated and has been deducted from the piece rate.

This change will allow mailers to avoid the substantial rate increase for letter-shaped pieces exceeding 3.3 ounces. Under the current rate schedule, once an automation letter exceeds the 3.3-ounce maximum weight, the pieces become subject to the piece/pound rates.

There are no mail preparation changes that accompany this change; these heavy letters will be required to meet the current standards for heavy automation letters in DMM C810.7.5 and will use the existing mail preparation sequence and labeling for automation letters. Current standards for mixed-rate mailings will not change. Residual pieces from a heavy automation letter mailing that cannot be barcoded can be mailed at single-piece First-Class Mail rates or prepared as a Presorted Standard Mail letter mailing with postage paid at the piece/pound rate (for pieces over 3.3 ounces). Like today, these residual pieces will not need to meet a separate 200-piece/50-pound minimum (see DMM E620.1.2) and will be reported on separate postage statements.

Heavier Automation-Compatible ECR Letters Are Eligible for Letter Rates

The maximum weight for automation-compatible ECR letters will increase from 3.3 ounces to 3.5 ounces (inclusive). This change applies to regular and nonprofit ECR saturation, high density, and automation basic rate letters. The rate charged for pieces that weigh between 3.3 and 3.5 ounces differs slightly from the rate for pieces that weigh 3.3 ounces or less.

All pieces mailed at high density and saturation letter rates will be barcoded and automation compatible; therefore, this change is consistent with the proposed change for regular Standard Mail automation letters (see next section). This change will not apply to letter-size pieces that are mailed at the nonletter rates (because they are not automation compatible or do not have a barcode).

This change will not apply to pieces mailed at the ECR basic letter rate (because the letter and nonletter rates are the same, there is no discount to subtract).

There are no mail preparation changes that accompany this change. These heavy letters will be required to meet the current standards for heavy automation letters in DMM C810.7.5 and will use the existing mail preparation sequence and labeling for ECR letters.

Mailers who choose to take this discount for heavy ECR letters will be required to use a new postage statement designed for this purpose. On the permit imprint postage statement, the discount is precalculated and has been deducted from the piece rate.

Barcode Requirement for ECR Saturation and High Density Letter-Size Pieces

Enhanced Carrier Route (ECR) letter-size pieces mailed at high density and saturation piece (letter) rates will be required to meet the physical standards for automation compatibility (DMM C810) and will be required to have a delivery point barcode to get the letter rates, otherwise they pay the nonletter rates. Pieces using simplified address will not be required to have a delivery point barcode and therefore will not need to meet the physical standards for automation compatibility to qualify for letter rates.

This change will apply to both ECR and Nonprofit ECR mail.

Requiring high density and saturation letters to be prebarcoded gives the Postal Service operational flexibility and eliminates the need to barcode these pieces if it is deemed that delivery point sequencing (DPS) is appropriate. The proposed requirement for automation compatibility corresponds to the requirement for a delivery point barcode — for the Postal Service to read the barcode, the piece must be compatible with automated mail sorting equipment. These requirements will not apply to detached address labels (DALs) that accompany flat-size pieces or irregular parcels. Even though the DAL itself is letter-sized, technically it is the label for the larger piece.

Pieces that do not meet the physical standards in DMM C810 or that do not contain a delivery point barcode will be subject to the corresponding ECR high density or saturation nonletter rate. Pieces that are letter-size but claimed at the nonletter rates will be marked, sorted, and trayed as letters.

There are no proposed changes to the sequencing requirements, markings, or sortation for Enhanced Carrier Route pieces. Tray labels will change to reflect whether the pieces in the tray are barcoded (BC), not barcoded but machinable (MACH), or nonmachinable, regardless of whether the pieces are barcoded (MANUAL or MAN). These designations help the Postal Service direct the trays of mail to the appropriate mail processing operation. Mailers will be required to use barcoded tray labels.

Pieces mailed with simplified address do not contain the necessary address elements to generate a delivery point barcode for that address. To qualify for the saturation letter rate, those pieces will not have to bear a delivery point barcode, will not have to be automation compatible, and will be labeled "MAN" (even if the pieces are machinable).

Pieces with exceptional or "occupant" addresses (A040) do contain enough address elements to generate a delivery point barcode and therefore must be automation compatible and must have a delivery point barcode in order to claim the high density or saturation letter rates.

Mailers will not be permitted to combine barcoded and nonbarcoded pieces into the same mailing. Therefore, nonbarcoded pieces will have to be presented as a separate mailing, but will not need to meet a separate 200-piece/50-pound minimum volume requirement.

The new requirements for high density and saturation letter rates will take effect the day new rates are implemented; however, mailers have until January 1, 2003, to comply with the tray labeling changes.

Nonmachinable Criteria

A letter-size piece is nonmachinable if it has one or more of the following characteristics (see new DMM C010.1.1 for how to determine the length, height, top, bottom, and sides of a mailpiece):

a. If the aspect ratio (length divided by height) is less than 1.3 or more than 2.5.

b. If it is polybagged, polywrapped, or enclosed in any plastic material.

c. If it has clasps, strings, buttons, or similar closure devices.

d. If it contains items such as pens, pencils, or loose keys or coins that cause the thickness of the mailpiece to be uneven.

e. If it is too rigid (does not bend easily when subjected to a transport belt tension of 40 pounds around an 11-inch diameter turn).

f. If it is a mailpiece more than 4-1/4 inches high or 6 inches long and the thickness is less than 0.009 inch.

g. If it has a delivery address parallel to the shorter dimension of the mailpiece.

h. If it is a folded self-mailer and the folded edge is perpendicular to the address (regardless of the use of tabs, wafer seals, or other fasteners).

i. If it is a booklet-type piece and the bound edge (spine) is the shorter dimension of the piece or is at the top (regardless of the use of tabs, wafer seals, or other fasteners).

Package Services Highlights

Package Services mail consists of mailable matter that is neither mailed nor required to be mailed using First-Class Mail service, nor entered as Periodicals mail. There are four subclasses of Package Services: Parcel Post, Bound Printed Matter (BPM), Media Mail, and Library Mail.

Parcel Post Highlights

Parcel Post rates will increase an average of 6.4 percent. The Parcel Post Inter-BMC nonmachinable surcharge will increase from $2 to $2.75 per parcel. The Intra-BMC and DBMC nonmachinable surcharges will remain at their current levels: $1.35 for Intra-BMC parcels and $1.45 for DBMC parcels. The Parcel Post origin BMC presort and BMC presort discounts will increase from $0.90 to $1.17 and $0.23 to $0.28 per piece, respectively.

The barcoded discount for qualifying Parcel Post and Parcel Select DBMC machinable parcels will remain at $0.03 per piece. The destination entry mailing fee will increase from $125.00 to $150.00. The Parcel Post pickup fee will increase from $10.25 to $12.50.

Rate Structure

Three changes will be made. First, separate rates will be available for parcels weighing less than 1 pound. Second, Parcel Select pieces will be eligible for no-fee electronic Delivery Confirmation. The final change will create a DSCF rate for nonmachinable parcels sorted to 3-digit ZIP Code prefixes and entered at destination SCFs. Nonmachinable DSCF Parcel Select pieces will be subject to a surcharge of $1.09 per parcel in addition to the applicable DSCF rate.

Bound Printed Matter Highlights

The Bound Printed Matter (BPM) rates will increse an average of 9 percent. Destination entry mailings will be eligible for discounts that encourage the deposit of mail at the destination BMC, SCF, or delivery unit. The destination entry mailing fee will increase from $125 to $150.

Rate Structure

There are two major changes to BPM rates: separate rates for BPM flats and parcels, and a new $0.03 POSTNET barcoded discount for single-piece rate and Presorted rate BPM flats weighing up to 20 ounces. Rates for flat-size BPM will be lower than the rates for BPM parcels in all three rate categories (single-piece, Presorted, and carrier route) and in the three available destination entry rates (DDU, DSCF, and DBMC).

To qualify for flat rates, the piece must fit the processing category for flats in DMM C050.3.0. To qualify for the barcoded discount, BPM flats will be required to meet the standards in DMM C820 for flat sorting machine (FSM) 881 processing.

Media Mail and Library Mail Highlights

Media Mail rates will increase an average of 4 percent and Library Mail rates will increase an average of 3.3 percent. The Presorted Mailing fee will increase from $125 to $150.

Rate Structure

There will be one fundamental change to the Media Mail and Library Mail structures. The 5-digit rate will be retained, but the BMC rate will be renamed the "basic" rate.

Preparation Changes

There will be three changes to the preparation requirements for Media Mail and Library Mail. First, Media Mail and Library Mail pieces will now be sorted to the 5-digit, 3-digit, ADC or BMC, and mixed ADC or mixed BMC levels. This adjusts the presort requirements for Media Mail and Library Mail to reflect current postal processing. Machinable parcels will continue to be presorted to 5-digit, BMC, and mixed BMC.

Second, the requirement for separate minimum volumes for each presort level will be eliminated, and the minimum volume requirement for a mailing will decrease from 500 to 300 pieces. To qualify for Presorted Media Mail or Library Mail rates, mailers will be required to have a minimum of 300 properly prepared and presorted pieces. Pieces in the mailing that meet 5-digit rate requirements will be eligible for the 5-digit rate. The remaining pieces in the mailing will be eligible for the basic rate.

The last change reinstates the option to allow mailers to prepare sacks of Media Mail or Library Mail using a minimum of 1,000 cubic inches of mail.

Containerization and Labeling for First-Class Mail, Periodicals, and Standard Mail

The definition of a full tray has been modified slightly to encourage mailers to make trays that are as full as possible. A full tray is one that is between 75 percent and 100 percent full. Mailers are encouraged to set their presort software at 85 percent; this creates fuller trays but gives mailers some room to "smooth" their tray levels across an entire mailing. The goal is to create fuller trays overall, which is good for customers and for the Postal Service. In addition, after the minimum volume for rate eligibility is reached (i.e., 150 pieces for a 3-digit area), overflow will be optional for all sort levels of letter trays. Also, mailers will be required to use as few trays as possible. Under current standards, a mailer could prepare one full 1-foot tray plus one less-than-full

1-foot tray; new standards will result in the preparation of a single less-than-full 2-foot tray. In addition, the measurement for the minimum volume of trays on pallets will be measured in linear feet, not by levels of trays.

On all First-Class Mail and Standard Mail letter trays, "LTRS" will change to "LTR" and "CR-RTS" will change to "CR-RT." This change is necessary to allow more room for other information on the tray label. Mailers have until January 1, 2003, to comply with these labeling changes.

Documentation for First-Class Mail, Periodicals, and Standard Mail

Mailers will no longer be required to present a hard copy Form 3553, Coding Accuracy Support System (CASS) Summary Report, with their mailings. Instead, mailers or mailer agents will continue to keep this documentation on file for 1 year from the date of mailing and make it available to the Postal Service on 24-hour notice. Mailers will be required to annotate the postage statement with the date of the address matching.

Special Services Highlights

Special services are enhancements that, for a fee in addition to postage, provide greater security and accountability; confirmation of mailing, delivery, and receipt; special handling; and payment and acceptance options for mail. Special services also provide delivery alternatives and secure options for sending money through the mail.

Bulk Parcel Return Service

The annual accounting fee for bulk parcel return service (BPRS) will increase from $375 to $475. The annual permit fee will increase from $125 to $150 and the per piece charge will increase from $1.62 to $1.80.

Business Reply Mail

For Qualified Business Reply Mail (QBRM), the per piece charge for the high volume QBRM category with the quarterly fee will decrease from $0.01 to $0.008. The QBRM quarterly fee of $1,800 will remain the same. The basic QBRM per piece charge for the category without the quarterly fee will increase from $0.05 to $0.06.

The business reply mail (BRM) per piece fee with an advance deposit account will remain at $0.10. The annual accounting fee for advanced deposit accounts will increase from $375 to $475. The regular BRM per piece charge without an annual accounting fee will increase from $0.35 to $0.60 per piece.

The monthly fee for bulk weight averaged nonletter size BRM will increase from $600 to $750, while the per-piece charge of $0.01 will remain the same.

Certificate of Mailing

Certificate of mailing fees will increase. For individual pieces, the original certificate will increase from $0.75 to $0.90, the firm mailing book (Form 3877) will increase from $0.25 to $0.30 for each piece listed, and the charge for a duplicate copy will increase from $0.75 to $0.90.

Additionally, mailpieces listed on Form 3877 and having postage paid with permit imprint will be permitted to pay the certificate of mailing fee using the permit imprint account. Under this option mailers will no longer be required to affix the fees to Form 3877.

For bulk pieces (Form 3606), fees for the first 1,000 pieces or fraction thereof will increase from $3.50 to $4.50. Fees for each additional 1,000 pieces or fraction thereof will increase from $0.40 to $0.50, and the charge for a duplicate copy will increase from $0.75 to $0.90.

Certified Mail

The certified mail fee will increase from $2.10 to $2.30. A service enhancement will allow mailers to verify delivery status over the Internet at www.usps.com.

Collect on Delivery

There will be no change to the current collect on delivery (COD) fees.

Delivery Confirmation

Retail and electronic Delivery Confirmation options will be extended to First-Class Mail parcels. For Package Services, Delivery Confirmation will be restricted to parcels only and will no longer be available for flat-size mail. For First-Class Mail parcels, the fee will be $0.13 for the electronic option and $0.55 for the retail option. The fee for the retail option for Priority Mail will increase from $0.40 to $0.45. For Standard Mail, the fee for the electronic option will increase from $0.12 to $0.13. For Parcel Select, the electronic option will be included in postage. For all other Package Services, the fee will increase from $0.12 to $0.13 for the electronic option and from $0.50 to $0.55 for the retail option.

Express Mail Insurance

Insurance coverage included with Express Mail service will be lowered from $500 to $100. Incremental fees will be applied at $1 per each $100 of desired merchandise insurance coverage over $100. Document reconstruction maximum liability will decrease from $500 to $100.

Insurance

The fee for unnumbered insurance (value up to $50 with no insured number applied) will increase from $1.10 to $1.30. The fee for numbered insurance service over $50 and up to $100 (insured number applied) will increase from $2.00 to $2.20. The incremental fee of $1.00 for each $100 in value over $100 and up to $5,000 will remain the same.

Merchandise Return Service

The annual accounting fee for merchandise return service will increase from $375 to $475. The annual permit fee will increase from $125 to $150.

Money Orders

There will be two classification changes for domestic and APO/FPO money orders. The first change will increase the maximum amount from $700 to $1,000 for both orders. The domestic money order fee for amounts of $0.01 to $500 will be $0.90, and the fee for amounts of $500.01 to $1,000 will be $1.25. The inquiry fee will increase from $2.75 to $3.00 for all money orders, regardless of value. The fee for APO/FPO money orders will remain the same at $0.25.

Parcel Airlift

Parcel Airlift (PAL) fees will increase. For parcels weighing not more than 2 pounds, the fee will increase from $0.40 to $0.45. For parcels not more than 3 pounds, the fee will increase from $0.75 to $0.85. For parcels not more than 4 pounds, the fee will increase from $1.15 to $1.25. For parcels over 4 pounds but not more than 30 pounds, the fee will increase from $1.55 to $1.70.

Registered Mail™

All Registered Mail fees will increase. The fee for Registered Mail with no declared value will increase from $7.25 to $7.50. The fee for Registered Mail valued between $0.01 and $100 will increase from $7.50 to $8.00. The incremental fee for Registered Mail with insurance per declared value level will increase from $0.75 to $0.85. The handling charge per $1,000 in value or fraction thereof for items valued over $25,000 also will increase from $0.75 to $0.85.

A service enhancement will allow mailers to verify delivery status over the Internet at www.usps.com.

Restricted Delivery

The fee for restricted delivery will increase from $3.20 to $3.50.

Return Receipt

The fee for regular return receipt service will increase from $1.50 to $1.75. The fee for return receipt after mailing (delivery record) will decrease from $3.50 to $3.25.

Return Receipt for Merchandise

The fee for return receipt for merchandise will increase from $2.35 to $3.00.

Signature Confirmation

Retail and electronic Signature Confirmation options will be extended to First-Class Mail parcels. For Package Services, Signature Confirmation will be restricted to parcels only and will no longer be available for flat-size mail. For First-Class Mail parcels, the fee will be $1.30 for the electronic option and $1.80 for the retail option. For Priority Mail, the fee will increase from $1.25 to $1.30 for the electronic option and from $1.75 to $1.80 for the retail option. For Package Services parcels, the fee will increase from $1.25 to $1.30 for the electronic option and from $1.75 to $1.80 for the retail option.

Special Handling

The fees for special handling will increase from $5.40 to $5.95 for pieces weighing up to 10 pounds and from $7.50 to $8.25 for pieces weighing over 10 pounds.

Address Correction Service

The fee for manual address notifications will increase from $0.60 to $0.70 per notice. The fee for automated ACS electronic notifications will remain the same at $0.20 per notice.

Address Sequencing Service

The fee for carrier sequencing of address cards service will increase from $0.25 to $0.30 per card.

Caller Service

The caller service fee for each separation provided per semiannual period will increase from $375 to $412. The fee for each reserved caller number per calendar year will increase from $30 to $32.

Mailing List Services

The charge for correction of mailing lists will increase from $0.25 to $0.30 per correction. The minimum per list charge also will increase from $7.50 to $9.00 per list. The charge for sortation of mailing lists on cards into groups labeled by 5-digit ZIP Code will increase from $73 to $100. The charge for address changes for election boards will increase from $0.23 to $0.27.

Meter Service

The fee for on-site meter service (per employee, per visit) will increase from $31 to $35. The fee for meter resetting and/or examination will increase from $4.00 to $5.00 per meter. The fee for checking in/out of service (per meter) of $4.00 will remain the same.

Permit Imprint

The permit imprint application fee will increase from $125 to $150.

Pickup Service

The fee for pickup service, available for Express Mail, Priority Mail, and Parcel Post, will increase from $10.25 to $12.50 (per pickup).

Post Office Box Service

Overall, post office (PO) box fees will increase. A new PO box fee category will be introduced for PO box service in the lowest-cost cities and highest-cost rural areas. This new fee group will provide a bridge to eventually move high-cost and low-cost ZIP Codes toward more appropriate fee assignments. PO box key duplication or replacement (after first two keys) will increase from $4.00 to $4.40 each. PO box lock replacement will increase from $10 to $11. There will be no change to the no-fee PO box service (Group E).

Shipper Paid Forwarding

The accounting fee will increase from $375 to $475.

Stamped Cards and Stamped Envelopes

The fee for stamped cards will remain the same. Special stamped envelopes (i.e., those with holograms or patch-in stamps) are no longer offered. The fees for the other types of available stamped envelopes will remain the same.