SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction

II. Postal Service Request

III. Notice and Comment

IV. Ordering Paragraphs

I. Introduction

On November 22, 2024, the Postal Service filed a petition pursuant to 39 CFR 3041.205.^[1] Rulemakings conducted under that section concern advance review of proposed financial models, minimum rates, and Mail Classification Schedule (MCS) changes to permit streamlined review of non-published rates (NPR) products and standardized distinct products (SDPs). 39 CFR 3041.205(a). Included with the Request, the Postal Service proposed to add a new NPR NSA product to the Competitive product list pursuant to 39 CFR 3041.320. See Request at 1.

II. Postal Service Request

Background. The Commission adopted rules for streamlined option rulemakings in Docket No. RM2023-5 to “address elements of 39 U.S.C. 3642 review and 39 U.S.C. 3633 pre-implementation review that are broadly applicable to qualifying [negotiated service agreements (NSAs)] and not particular to individual qualifying NSAs.” ^[2] Specifically, such proceedings are used to establish eligibility criteria specifying the ways in which qualifying NSAs will be permitted to vary from existing offerings, to review a proposed financial model for qualifying NSAs that accounts for the financial impact of any such variations, and to establish minimum rates for qualifying NSAs. Order No. 7353 at 4.

After a financial model, minimum rates, and MCS language are approved in a streamlined option rulemaking, NPR NSA products and SDP NSAs that conform to the approved MCS language, use the approved financial model, and comply with the approved minimum rates can be added to the Competitive product list. See39 CFR 3041.320(c); 39 CFR 3041.325(c). Requests to add conforming NPR NSA products to the Competitive product list are reviewed in public proceedings, and, if approved, one or more included contracts using the same contract template may be subsequently added to the product without requiring further approval from the Commission. See39 CFR 3041.320. Requests to add conforming SDP NSAs to the Competitive product list are reviewed by the Commission in summary proceedings. 39 CFR 3041.325(c).

Request. The Postal Service proposes MCS language, a financial model, and minimum rates for “Mid-Market—Non-Published Rates” contracts. See Request at 1. The Postal Service states that such contracts will provide discounted rates for “existing end-to-end competitive products, Priority Mail Express, Priority Mail, and USPS Ground Advantage® on the same basis as, and without any material changes made to, the publicly available versions of those products.” Id. at 2.

The proposed financial model uses the “archetype approach” wherein cost coverage is demonstrated for the national volume distribution and each of 10 distinct volume distributions (archetypes). See id. at 3. When the archetype approach was first proposed, the Postal Service stated that it would assign each customer to an archetype based on a questionnaire.^[3] The Postal Service further stated that, within each archetype, volume is distributed across cubic tiers and flat rate products consistent with national distribution data. See Order No. 7334 at 7 (citing Docket Nos. MC2024-384 and CP2024-392, Response to CHIR No. 1, question 3). The Postal Service explained that it would not use the archetype approach for customers with unique circumstances or preferences that make the archetype approach inappropriate.^[4]

The proposed addition of a new NPR NSA product to the Competitive product list includes contract templates based on numerous recent Postal Service NSA filings. Request at 3. The proposed contract templates differ primarily based on how volume is calculated for purposes of the tiered pricing mechanism, with two templates apiece that rely on annual, quarterly, and rolling four-quarter volume. See id. at 4, 4 nn.11-12.

III. Notice and Comment

The Commission establishes Docket Nos. RM2025-5 and K2025-491 for consideration of matters raised by the Request. More information on the Request may be accessed via the Commission's website at http://www.prc.gov. Interested persons may submit comments regarding the proposed financial model, minimum rates, and MCS changes filed pursuant to 39 CFR 3041.205 no later than December 12, 2024. Should the Commission authorize the financial model, minimum rates, and MCS language for use pursuant to 39 CFR 3041.205(f), the Commission will separately request public comment regarding whether the Postal Service's request to add the Mid-Market—Non-Published Rates product to the Competitive product list conforms to the then-authorized version of the financial model, minimum rates, and MCS language and otherwise satisfies the requirements of 39 CFR 3041.320(g).

Pursuant to 39 U.S.C. 505, Christopher Mohr is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in these proceedings.

IV. Ordering Paragraphs

It is ordered:

1. The Commission establishes Docket Nos. RM2025-5 and K2025-491 for consideration of the matters raised by the USPS Request to Establish New Mid-Market—Non-Published Rates Product (MMNPR) and Notice of Filing Materials Under Seal, filed November 22, 2024.

2. Comments by interested persons concerning the financial model, minimum rates, and Mail Classification Schedule changes proposed pursuant to 39 CFR 3041.205 are due no later than December 12, 2024.

3. Pursuant to 39 U.S.C. 505, the Commission appoints Christopher Mohr to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in these dockets.

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