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INTRODUCTION OF EXPERIMENTAL
AND NEW POSTAL PRODUCTS
24-MONTH PERIOD: OCTOBER 1, 1999 TO SEPTEMBER 30, 2001
AND NEW POSTAL PRODUCTS
24-MONTH PERIOD: OCTOBER 1, 1999 TO SEPTEMBER 30, 2001
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Over the past 24 months, the Postal Service has introduced several new postal products through both the Postal Rate Commission's experimental rules and through omnibus rate case proceedings. Several experimental proposals currently are pending before the Postal Rate Commission. The Commission has specific rules contemplating such actions for new products that are introduced on an experimental basis or otherwise independently of omnibus rate case proceedings. The Postal Service must file testimony and related documentation supporting each such filing. The testimony and related documentation must present detailed costing and pricing data for each new product. Once such a case is filed with the Postal Rate Commission, intervenors, including competitors, can engage in substantial questioning of the proposals through written interrogatories and document production requests, as well as oral cross-examination of Postal Service witnesses. These intevenors can file testimonies opposing the Postal Service's proposal or offering alternatives. The Postal Service can attempt to bypass some of these litigation steps by seeking and reaching agreements with interested parties such as customers and competitors to "settle" the case. This has occurred in some instances in the past. However, such settlements have often been the result of ongoing discussions lasting months before and during the filings. Given the amount of time involved in preparing and litigating cases before the Postal Rate Commission, particularly where omnibus rate cases are filed in close succession, it is often a more productive use of staff resources for both the Postal Service, and presumably the Commission, for the Postal Service to incorporate new products and product refinements into the general rate case. Below is a summary of activity in the past 24 months in the areas of negotiated service agreements, experiments recommended by the Postal Rate Commission, changes requested in the current rate case, and finally an experimental rate case which was withdrawn by the Postal Service. In addition, there are typically 15 to 20 minor refinements. Some of these may simplify the use of existing products. In other instances, they provide customers a means to save postage by taking on some sorting or transportation activities normally performed by the Postal Service. Negotiated Services Agreements Update The Postal Service established an internal cross-functional, negotiated service agreement (NSA) working group in 2000. This group developed guidelines to be used in evaluating negotiated service agreements and has reviewed several customers' preliminary proposals. As with any negotiations, the parties involved were concerned that the proposals resulting from the negotiations made good business sense for both sides. These discussions are inevitably complicated because, under the Postal Service's current regulatory structure, any rate or classification change resulting from the negotiations would not be final. Instead, a third party-the Postal Rate Commission-would be required to review and recommend such changes. The NSA efforts were overtaken by the financial difficulties of the Postal Service and the need to obtain sufficient revenues to maintain the nation's postal system. The Postal Service determined that the organization's financial requirements were of the utmost priority and was therefore forced to defer the pursuit of NSAs until it could do so with the appropriate attention and resources. With settlement a strong possibility in the current rate case, we are examining NSAs again, and have begun reevaluating the earlier process, reviewing potential NSA candidates, and determining the resources necessary to pursue customized ratemaking. The Postal Service is encouraged by many of Chairman Omas' recent comments. Chairman Omas has clearly signaled a new receptiveness to NSAs by the Postal Rate Commission, which rejected rulemaking requests for NSAs in 1989 and 1995. Therefore, we will take advantage of the opportunity to work collaboratively with the Postal Rate Commission and interested customers to explore various alternatives allowing us to accommodate a host of smaller-scale cases while protecting the public's interest. Therefore, we are currently involved in discussions with mailers, which we hope will lead to NSAs this year. PRC Recommended Experiments
An experimental classification establishing presort discounts (ADC, 3-Digit, 5-Digit) for Priority Mail. Priority Mail Presort extends worksharing opportuni-ties to Priority Mail customers who can presort mail cost-effectively to reduce their total mail production costs. The experiment will allow the Postal Service to determine if there is sufficient market interest and if the Postal Service can successfully extend worksharing to Priority Mail in a dynamic operational environment.
An experimental classification for Mailing Online service which permits customers to transmit documents and mailing lists electronically over the Internet to the Postal Service for printing and delivery as hard-copy mail. Mailing Online offers small businesses and individuals an easy, low-cost way to prepare and enter advertising, invoices, notices, and other messages by bundling existing discounted postage rates with charges for printing and mail preparation. The experimental request followed a prior market test recommended by the Commission and built upon the technical experience gained during the test.
An experimental classification allowing one qualifying advertisement or enclosure to be included (or "ride along") with a periodical for a flat fee. Ride-along offers advertisers an effective, low-cost way to reach their target audience. The Postal Rate Commission recommended extending the experiment at the request of the Postal Service. This experiment has been successful and a permanent classification for Periodicals "ride-alongs" was included in the recent omnibus rate request. Docket No. R2000-1
Delivery Confirmation Experiment
The Postal Rate Commission established an expedited schedule for consideration with the goal of meeting a mid-November issuance of a Recommended Decision. On November 5, 2001, the United States Postal Service withdrew its request. While facing the challenges posed by the recent world events, including use of the mail for bioterrorist acts, the Postal Service believed the most prudent course would be to focus its window service and retail operations on the provision of existing domestic services during the upcoming holiday peak mailing season. In addition, because of disruptions in mail volume due to recent world events, any data collected would have been difficult to analyze in comparison to prior year volumes. ### |
