SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

II. Background

III. Notice of Filing and Related Proceeding

IV. Ordering Paragraphs

I. Introduction

On July 1, 2024, the Postal Service filed a response to Order No. 7049 ^[1] regarding proposed changes to analytical principles relating to periodic reports (Proposal Eight).^[2] The Commission reopens this docket for the limited purpose of considering the issues raised by the Response and invites public comments on the Response.

II. Background

In Order No. 7049, the Commission approved the changes in analytical principles proposed by the Postal Service in Proposal Eight with two modifications: (1) the aggregated coverage model specification for box time was approved rather than the Three-Group Coverage Model; and (2) the errors identified in the Postal Service's costing files were corrected as discussed in the order. Order No. 7049 at 37. The Commission also ordered the Postal Service to conduct additional research to justify the groupings presented in the Three-Group Coverage Model or other specification of its choosing for estimating the volume variability of box time, as well as to report the findings of such research by July 1, 2024. Id. In addition, the Commission ordered the Postal Service to provide by July 1, 2024 a detailed description of how it plans to assess the potential partial volume variabilities of sequences 026, 049, 051, 052, 037, 038, 083, 053, and 063. Id.

On July 1, 2024, the Postal Service filed the Response addressing the two research topics ordered by the Commission in Order No. 7049. Regarding the first research topic, the Postal Service now proposes a Two-Group Coverage Model for estimating the volume variability of box time, grouping products based on whether they have homogeneous high or low coverage-causing characteristics on box time. See Response at 3-14. Based on the Postal Service's research, it proposes that the high coverage impact group consists of delivery point sequence (DPS) letters, carrier route flats, walk-sequence saturation (WSS) letters, WSS flats, boxholder letters, and boxholder flats. Id. at 14. The Postal Service also proposes that the low coverage impact group consists of random letters, random flats, mailbox parcels, door parcels, locker parcels, and accountables. Id. The Postal Service then calculates a variability of 33.66 percent for the high coverage impact group and a variability of 5.63 percent for the low coverage impact group. Id. at 17. It then proposes 39.28 percent as the volume variability for box time. Id. at 33, Table 15. The Postal Service states the Two-Group Coverage Model is preferrable over the aggregated coverage model approved in Order No. 7049 for estimating the volume variability of box time because it “adds precision to the estimating by ferreting out the different effects by using groupings of mail products that have similar coverage-causing characteristics.” Id. at 17.

Regarding the second research topic, the Postal Service proposes the following volume variabilities for the nine sequences ordered by the Commission in Order No. 7049 for it to research:

Chairman's Information Request No. 4 (CHIR No. 4) is issued today, July 30, 2024, concerning the Postal Service's Response and the Postal Service's response to CHIR No. 4 is due August 13, 2024.^[3]

III. Notice of Filing and Related Proceeding

The Commission hereby informs the public of the Postal Service's Response and of the reopening of Docket No. RM2024-2 for the limited purpose of considering issues raised by the Response. More information on the Response and additional filings in this proceeding may be accessed via the Commission's website at http://www.prc.gov. Any material filed in this proceeding that is subject to an application for non-public treatment (filed under seal) may be accessed via the Commission's website only by account holders granted access by an order or in accordance with 39 CFR 3011.300(a). The Commission's rules on non-public materials (including access to material filed under seal) appear in 39 CFR part 3011.

Interested persons may submit comments on the Response no later than August 27, 2024. Pursuant to 39 U.S.C. 505, Nikki Brendemuehl continues to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.

IV. Ordering Paragraphs

It is ordered:

1. The Commission reopens Docket No. RM2024-2 for the limited purpose of considering issues raised by the Response of the United States Postal Service to Order No. 7049 Regarding Rural Carrier Costing, filed July 1, 2024.

2. Comments by interested persons in this proceeding are due no later than August 27, 2024.

3. Pursuant to 39 U.S.C. 505, the Commission appoints Nikki Brendemuehl to continue to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.

4. The Secretary shall arrange for publication of this order in the Federal Register .