July 2001

Two-Year Experiment for Priority Mail Discounts

On March 7, 2001, the Postal Service filed a request with the Postal Rate Commission (PRC) requesting experimental classifications and discounted rates for presorted Priority Mail. On May 25, 2001, the PRC issued a favorable Opinion and Recommended Decision. The Postal Service Governors approved that action on June 4, 2001. The experiment will begin July 15, 2001, and will be conducted for two years. Participation in the first year of the experiment will be limited to approximately ten locations.

The purpose of the experiment is to measure the costs associated with mailer sortation and to determine if incentives provided by the discount structure are attractive and beneficial to the mailing community.

The experimental rates include discounts for three presort levels: ADC (Area Distribution Center — a mail processing facility that represents a state or a large portion of a state), 3-digit ZIP Code prefixes, and 5-digit ZIP Code sorts.

"We are seeking to make Priority Mail more affordable and offer our customers more options and greater value," noted John F. Kelly, President, Expedited/Package Services, at the time of filing with the PRC.

In order to receive the discounts, mailers must meet certain containerization and data collection requirements. The containerization and preparation requirements may vary by mailer location.

Here's How Mailers can Participate in the Presorted Priority Mail Experiment

Mailers who wish to participate in this experiment may choose from among three presort levels and corresponding per-piece discounts as follows:

Presort level and Per-Piece Discount

• Area Distribution Center (ADC) — discount $0.12 per piece
• 3-Digit — discount $0.16 per piece
• 5-Digit — discount $0.25 per piece

Mailers also may choose from among three presort options. Letters/flats in trays, parcels, and outside parcels may be combined in the same container at the 5-digit levels. Letters/flats in trays and parcels in sacks may be combined in the same container at the ADC and 3-digit levels. Overflow trays/sacks are not permitted.

Each mailing must contain a minimum of either 300 pieces or 500 pounds. Residual pieces are included in the minimum volume requirement.

The Postal Service will work with each participant to determine the best containerization and preparation requirements, which could vary based on mailer’s geographical location and mail densities.

Specific presort minimums were published in the Federal Register Notice dated June 22, 2001. A copy of this can be found on the Internet at http://ribbs.usps.gov.

As selection criteria for the experiment, the Postal Service will seek mailers of diverse size, location, and mail characteristics.

Mailers should be prepared to work with postal personnel from Business Mail Acceptance and Transportation Network Specialists to coordinate mail preparation and containerization changes. The Postal Service prefers mailers who will present Presorted Priority Mail mailings on a regular and continuing basis.

A Postal Service team has been coordinated to oversee the experiment. All decisions of the team are final. Mailers selected for participation will be required to abide by the terms of a Presorted Priority Mail Experiment Service Agreement. Existing Priority Mail classifications will remain unchanged.

Mailers who wish to participate in this experiment should contact the Manager of Mail Preparation and Standards via one of the following methods:

• Email to ssuggs@email.usps.gov
• Fax it to (703) 292-4058
• Mail it to:

MAIL PREPARATION AND STANDARDS

US POSTAL SERVICE

1735 N LYNN ST ROOM 3025

ARLINGTON, VA 22209-6038

Application is available online at

— Expedited/Package Services

— Mail Preparation and Standards