Waiting for Shoes to Drop

Mailing service providers and their clients continue to wait for critical events that will influence, if not decide, significant portions of their businesses' future.  Those events, known to all but the most detached members of the mailing industry, are Congressional action on postal reform and USPS action on the next rate case.

Shoe #1

As MFSA has previously reported in Postal Points, there is general agreement that action on postal reform must be taken this year, and that it needs to be taken soon in order for other dependent matters - notably the rate case - to be resolved.  Key participants, such as top postal executives, administration officials, Congressional leaders, and industry representatives, are closely aligned on the objective of enacting postal reform legislation by as early as April.

Congressman John McHugh (NY) re-filed last year's House bill (successfully getting it designated as H.R. 22, the same number as his original proposal filed several years ago), although some observers have said he did so perhaps too hastily, before improvements sought in last year's bill could be considered for inclusion.  Nonetheless, the McHugh bill is expected to move along, and a companion Senate bill is expected as well, perhaps before March.

Of course, the content of whatever legislation goes to a vote (or to the President) will be more important to MFSA members and others in the mailing industry than the simple act of bills being filed.  If the final legislation is to be "acceptable" in the eyes of the many parties that can influence its fate, it will have to be a virtually Solomonic mix of "true reform" (for the administration), economic relief (for mailing service providers), operating latitude (for the Postal Service), and regulatory control (for UPS and others in the industry).

However, it long ago became clear (at least to the Postal Service and its customers) that the critical element of any reform measure is relief from the CSRS reform mandates - the escrow provision and the transfer of payment for annuitants' military service.  Observers will check for those elements first; whether the legislation deletes them will drive industry opinion for the entire proposal, directly determine the size of the next rate increase, and indirectly steer clients' money into or away from the mail and the mailing industry.

Shoe #2

A popular belief in 2003 and 2004 was that the "Potter Promise" - the PMG's guarantee of stable rates until 2006 - meant that the Postal Service would be filing a rate case in late 2004 or early 2005 so that it could implement new prices in 2006 as soon as revelers finished singing Auld Lang Syne.  Such timing was based on another popular belief that the traditional trends and cycles of postal finances would make it impossible for the agency to hold out for new rates beyond early 2006, regardless of the preceding years' positive financial results.

But as time passed, it became clearer that the expected circumstances that would have caused an urgent need for additional revenue were not materializing.  As a result, neither was the likelihood of a sooner-rather-than-later rate filing, so the anticipated date for a filing slipped later into 2004, then into the first quarter of 2005, and then into April.

By mid-January, some observers were openly speculating that new rates might not be required until 2007, meaning a rate case would not even be filed until 2006, but the Postal Service itself was keeping quiet about its planned rate case chronology.

Shoe #3

Of course, the importance of a rate case is more about the size of the proposed rate increase than the timing of its implementation.  But here, too, the picture is evolving.

Raising rates in line with inflation was the initial goal, but uncertainty over Congressional action on the CSRS issues caused the forecast to become conditional.  At last fall's National Postal Forum, the PMG offered two scenarios: a "high single-digit" increase with postal reform, or a "mid-double-digit" hike without (i.e., if the CSRS burdens remained).  Then, a Treasury official, expressing the administration's belief that the Postal Service should fully fund its future obligations, said that doing so should require a 22% rate increase (that, amazingly, he did not find problematic).  Further, by last fall, the Postal Service was openly stating its intention to phase-in any rate increase; all rates (except for single-piece First-Class Mail) would go up by one-half the total hike on "day one" and by the other half a year later.

But, meanwhile, postal finances and other business indicators began to show results that seemed to undermine traditional opinions of the Postal Service as being in failing financial health.  The agency had an impressive surplus at the end of its 2004 fiscal year, and better-than-expected performance in the opening months of the 2005 fiscal year.  These circumstances have defused some of the anxiety about the Postal Service's immediate financial well-being, but are not necessarily indicative of future conditions.  Regardless of the long-term validity of short-term appearances, however, their existence apparently caused a degree of optimistic revisionism at L'Enfant Plaza.

Reports in late January had the PMG saying that the agency would need only a mid-single-digit rate increase (like 6%) even with the escrow and military payment obligations in force.  If those obligations were lifted, the story goes, the next rate increase could be a very low number - or delayed until 2007.

Other postal observers propagated the scenario that, rather than proposing a single rate increase phased-in over two years (e.g., in 2006 and 2007), the Postal Service might instead make two separate filings.  First, it would seek an across-the-board increase (thought to be 6%) through an expedited case that could be filed, litigated, settled, and implemented faster than a traditional case.  The increase from that case could take effect in early 2006, perhaps on January 1 (a Sunday).  Then, perhaps later in 2006, the Postal Service would file a traditional case, maybe with classification elements, seeking to increase rates an average of 5-6% more.  Of course, the net effect of these cases would be about the same as from a 12% case phased-in over two years.

What's a ratepayer to do?

All the speculation, scenarios, and the ever-changing situation have caused an understandable degree of confusion and concern.

Those who advocate postal reform (aside from the CSRS issues) worry that the improved USPS financial picture (if more than temporary) may dampen support.  Congressional leaders reportedly say that won't happen, and offer assurances that their interest in reform will not falter just because the Postal Service isn't bleeding red ink or isn't forced to seek a huge rate increase.

Of course, the relatively sudden improvements in the Postal Service's financial condition have postal critics and other observers wondering aloud how the agency's actual performance can be so different from its financial self-assessments and revenue forecasts.  Some credit relief from CSRS payments or the long-awaited rebound in mail volume that usually accompanies a healthy general economy, while others say the Postal Service is outdoing itself in meeting its Transformation Plan targets.  Still others say that the agency simply estimated trends badly or is overreacting to short-term trends.  Whether any or all are factors no-one knows, but the agency's current fiscal circumstances have led some outsiders to wonder just where lies the reality of postal finances.

For MFSA members and their clients and peers, however, the situation remains essentially unchanged.  Whether the Postal Service has ten good years or only ten good months left, the needs remain to revisit the agency's fundamental business charter and to ensure its long-term health.  Current upswings in volume will eventually reverse, and the impact of electronic messaging and the size of the delivery network both will only increase over time.  Similarly, the Postal Service will eventually finish its Transformation Plan to-do list and will find few if any ways to make big strides in efficiency and cost reduction.

Moreover, the CSRS burdens, if left in place, will needlessly add five or six percentage points on the next rate case regardless of what is required to offset inflation.  And once those funds are raised, Congress will not easily release them to benefit ratepayers.  The postal "cash cow" has been milked before, and it may be headed for the barn again.

As a result, mailing service providers and their clients must be mindful that the important shoes have not yet dropped.  Business planning for the next few years will remain problematic; although an increase in postage costs could be estimated at 6% in both 2006 and 2007 under most scenarios, nothing is guaranteed.

All of this may help keep MFSA members (and their clients) mindful that it may be in their best interests to not lessen their efforts (especially in Congress) to assure that postal reform - with CSRS relief - is enacted.  Only such an outcome will enable clearer projections of future rate increases and help ensure that those increases are as small as possible. [TOP]

USPS Governors OK RPN Fee

As expected, the Postal Service's Governors have accepted the recommended decision of the Postal Rate Commission regarding a USPS test of a fee for the use of repositionable notes.  The Postal Service had requested approval for the test last July 16, and the PRC made its recommendation on December 10 (see the December 24, 2004 issue of Postal Points for more details).  The Governors also set April 3 as the implementation date for the one-year test.

No doubts

The RPN case was the first PRC recommendation to be considered by the newly-composed board.  Some of the recently-appointed Governors had been expected to demonstrate more independence in their thinking, and to be more questioning of postal management decisions than previous boards, but their statement did not indicate any such departure from tradition had begun.

Rather, the decision echoed the same viewpoint on the issues and arguments associated with the RPN filing as did the Postal Service's own testimony.  (This should not be surprising; the Governors' statement was likely prepared by the same legal staff that worked on the Postal Service's PRC testimony.)  As a result, the Governors expressed no doubts when accepting the PRC's recommended decision.  For example, where the PRC had found the record "meager" in regard to an "abstract [pricing] issue," the Governors confidently stated that they "[did] not find this troubling."  Instead, they asserted that the postal pricing testimony gave "adequate support" and that the RPN proposal "met all the relevant statutory classification and rate criteria."

Although they did acknowledge that the case was "controversial," and was opposed by "a group of mailer associations," the Governors still concluded that the PRC "rightly rejected" the mailers' arguments.

The Postal Service's testimony had indicated it expects the test will show an increase in revenue, both from the fees themselves and from greater use of mail as a transport for RPNs.  The agency seemed to not envision the possibility that the fee could have the opposite effect, as if current or potential RPN users did not have the choice of simply not using the devices.  Whether the Governors quizzed postal management about such a possibility is not known, but their statement does not indicate the question was ever considered.  Rather, they said they had "conclude[d] that it is also established on the record that RPN service could yield a net benefit to Postal Service customers as a whole … whatever the actual level of demand."

The nose under the tent

One of the industry's objections - dismissed by the Postal Service and the PRC - was that endorsing the pricing concept underlying the RPN proposal was a dangerous precedent.  MFSA and other mailer associations had argued that the Postal Service was breaking new ground by claiming it had the statutory right to benefit (through a fee) for the increased marketing value of mail caused by characteristics added by the mailer.  Potentially, MFSA and the others argued, if the PRC allows the precedent to stand, the Postal Service could propose a series of fees for any and all mailpiece design features that could be shown to improve recipients' response rate to mail.

The PRC said mildly that "it might be undesirable from the standpoint of regulatory policy if unbundling cost-free features of the mail for separate ‘value' pricing were to become commonplace."  The Governors, for their part, were no bolder, stating that their decision "is limited to the facts of this case" and "not intended to reflect a broad new pricing policy."  Just the same, they added, "future application of value pricing may be appropriate on a case-by-case basis."

Now what?

During the test period, RPNs will be allowed on presorted and automation flat- and letter-size mail, at First-Class, Periodicals, and Standard Mail rates.  This is a greater range than in the past, and is good for mailing service providers and their clients who have found the devices useful for catching and maintaining recipients' interest and attention.

However, a ½-cent fee will be charged for each piece of First-Class Mail that bears an RPN, and a 1½-cent fee will be charged for each Periodicals or Standard Mail piece (that fee is the same for both regular and nonprofit Standard Mail).  (See the following article for the other mailing standards that the Postal Service has prescribed.)

The fees are not good news, and at least will force current or potential RPN users to evaluate the new fee against the potential response improvement or other gain that might result.  At the worst, the fees will discourage or eliminate most interest in the use of RPNs.  That's the possibility that, as mentioned above, apparently wasn't factored into the Postal Service's evaluation.  Whether the one-year exercise proves industry forecasts or postal expectations are right remains to be seen.

Filtering the baby out of the bathwater

Regardless, the value of using an RPN should not be denigrated or dismissed simply because of the Postal Service's test of a fee.

First, the test is to determine customer interest in the use of RPNs for a fee.  It is not designed to separately measure either the marketplace interest in, or value of, RPNs or how much they may improve response rates to the messages to which they are affixed.  Similarly, it is not designed to test various price points at which the Postal Service could set a fee without discouraging the use of RPNs as a result.  So it may be prudent for mailing service providers to not become too negative about RPNs as effective devices for improving addressees' response; that could hurt client interest in a post-test (hopefully no-fee) environment.

Second, despite the fee, there may be applications in which a client still sees sufficient value in the use of an RPN to justify the added cost.  Because mailers can earn revenue from applying RPNs, that service should still be offered; clients can evaluate whether the "lift" in response from an RPN makes it worth the total cost.

Finally, the fee applies only to RPNs affixed to the outside of mail.  Tipping a note onto an internal component of a mailpiece, or letting one show through a window or die-cut in the envelope, does not make the piece subject to the fee.    Similarly, for flat-size mail, affixing an  RPN to what's mailed inside a polybag escapes the fee. Of course, other classification standards may bear on these alternatives, so mailers and their clients would need to investigate the appropriate standards for the rate claimed.  Just the same, it may make sense to look for ways that allow continued use of RPNs without facing the added fee. [TOP]

USPS Publishes Interim Rule for Use of RPNs

In the February 1 issue of the Federal Register, the Postal Service published the Domestic Mail Manual standards that will apply to repositionable notes during the period that the agency will be testing the assessment of a fee for use of the devices (see related article on page 4).  The interim rules will be effective from April 3, 2005, through April 3, 2006, when the test period ends.

The interim standards, being applicable only during the test period, were placed in DMM G994, a series used for standards related to experimental services rather than permanent classifications.

Rate Case Speculations Preparations

As mailing service providers and their clients wait for the next rate case to be filed, they do what any people would do while anticipating an event - they speculate.  Of course, almost no-one knows what the next rate case will contain, either in terms of a rate increase or in classification changes, and the few who may know are not inclined to tell.  But this lack of hard information, despite fostering speculation, does not mean that nothing can be reasonably expected nor, in turn, that basic preparations can't be made, especially by those who prefer to be ahead of the curve rather than behind it.

The most obvious element of a rate case is higher prices, although the degree to which those prices will be higher remains unknown (see the article on page 1 of this issue of Postal Points).  Regardless, any rate increase is never good news, but its impact can be mitigated if each party in the mail production process engages in some well-planned proactivity.

Planning ahead by looking in-house

Postage aside, mail is no less functionally valuable after a rate case that it was before, but a rate hike changes the equation to make mail relatively less efficient, i.e., more costly to get the same number of messages delivered and to generate the same level of response.  Therefore, to keep the balance of cost and return, each message needs to be more effective.  For example:

·      Make each message count.  This can be achieved when mail originators (owners and designers) improve the quality and impact of a message so that the same quantity generates better response, offsetting the higher unit cost.  Ingredients in this tactic would be the appearance of the mailpiece, the quality of the message, coordination with other venues (like websites or in-store events), and better selection of recipients.

·      Scrub mailing lists.  By now, everyone in the mailing industry should understand the cost, and the wasted investment, represented by sending mail to bad addresses.  List owners, working with mailers and their clients, can improve address management practices to mitigate rate increases by reducing the postal costs that propel rates; by maximizing rate eligibility where address accuracy measures are mandated; and by optimizing the deliverability of mailings.

·      Manage production costs.  Many corporations (and USPS operations) understand the value of periodically using a structured method to analyze how they do their work.  Smaller companies, including mailers with twenty or fewer employees, also can benefit from such self-analysis to identify deficiencies that are occasions for extra costs or lapses in quality - such as barcode errors that could be caught by MERLIN.  Improving internal efficiency not only enables a lower cost structure, it enables more competitive pricing - keeping mail affordable for clients while maintaining profitability.

·      Know the rules.  Mailers may be inclined to learn and do only what is necessary, e.g., only the mail preparation methods clients now want.  Such short-term thinking may work for a while, but a more prudent approach may be to examine whether mailpiece and mailing production practices enable use of the lowest possible rates, and whether mailpiece design and mailing methods comply with the applicable postal rules.  These examinations may reveal new preparation options and discounts not considered before.

·      Pay attention.  A reasonable level of attentiveness should enable mailers and their clients to be aware of what's ahead and to have the opportunity to get prepared; monitoring what's happening beyond the front door is simply good business.  Paying attention to change also means being involved in shaping it, such as by offering input on USPS rulemakings, and engaging in the legislative process.

Planning ahead for what the Postal Service might do

Everyone will need to wait until the rate case is filed to know for certain what classification changes will be proposed.  Moreover, the implementation rules for those proposals would not be published until months later, and would not be effective until the case itself is implemented.  Nonetheless, looking at what the Postal Service has said and done in the recent past can suggest what types of changes it may seek, and for what ratepayers and mailers may want to prepare.

·      Address hygiene requirements.  Some rates already have "move update" standards that are designed to decrease postal costs for undeliverable mail by requiring list owners to periodically validate address information and make changes to source lists as appropriate.  Given its efforts to reduce costs, and its unfinished rulemaking in 2002, it's reasonable to expect the Postal Service eventually will propose extending "move update" standards to virtually all "discount rate" mail, maybe in the next rate case.  So, prudent mailers and list owners will not wait for such standards to take effect before adopting practices to ensure address lists are up-to-date and accurate.

·      Worksharing.  Despite the chronic opposition of the postal clerks' union, worksharing will remain an ingredient of postal ratemaking - but the nature and relative values of worksharing discounts will change.  As mail processing methods and equipment evolve, as facilities are realigned, and as the mailstream becomes generally more efficient, the need for and value of some levels of presort, the logistic details of destination entry, and the mandated characteristics of automation-compatible mail will change accordingly.  Therefore, forward-looking mailing service providers will plan to be ready to implement the software, equipment, and distribution methods needed by an ever-changing postal infrastructure.

·      EDI and "intelligent" mail.  USPS efforts to develop and expand the use of imbedded data, whether in four-state barcodes or information-based postage indicia, can offer opportunities for those who can prepare "intelligent" mail.  Such data will enable greater transparency in mail processing and broader knowledge of service performance.  Concurrently, electronic data interchange will increase, such as through mail.dat format files, to pass information about, for example, mail volumes, distribution patterns, and postage.  Such data can be used with on-piece "intelligence" to streamline mail acceptance, enhance workflow planning, and develop reliable profiles of mail delivery.  But it remains to be seen whether the Postal Service will add a financial incentive (or cost) to whatever EDI or "intelligent" mail programs may be developed. [TOP]

Survey Highlights Damage from Sharp Rate Hike

Often the potential impact of a drastic action is seen as more of a theoretical concept than a real danger.  Such a detached view sometimes occurs when discussing the impact of a postage rate increase or, more contemporarily, a rate hike driven to higher-than-otherwise-needed levels because of the failure of Congress and the administration to delete financial burdens being placed on the Postal Service to artificially improve the appearance of the federal budget.

Asking those who know

To get an assessment of how an inflated rate increase would affect mailing service providers, MFSA conducted an informal survey of its members, asking about the impact on their sales revenues and employment ranks if rates were to increase by 8%, 15%, or 22%. 

Those figures are based on three possible scenarios related to disposition of Civil Service Retirement System reform mandates (an escrow account and USPS liability for retirees' annuity credit for non-postal government service).  If the Postal Service raised its rates only to cover inflation, the increase would be about 8%.  If CSRS mandates are fully imposed, the increase would jump to about 15%.  If administration accountants succeed in requiring the Postal Service to fully prefund various future retiree health costs, rates could go up by as much as 22%.  (See the December 24, 2004, issue of Postal Points for more details.)

About seventy companies responded, representing about $1.2 billion in annual sales revenue, and employing over 10,500 people.  Although the results of the survey may not be statistically indicative of the mailing industry as a whole, they're still illustrative of the argument that the use of mail is very price-sensitive.  Survey respondents said:

·      If postage rates were increased by 8%, their annual sales revenue would fall by an average of about 5.5% and they would need to shed about 5.7% of their employees as a result.

·      If the rate increase were 15%, sales revenue would drop an average of about 11.3% and employment would need to be trimmed by 12.5%.

·      However, if rates jumped 22%, members' annual sales revenue would go down by an average of over 19.3% and about 23.3% of their employees would be released.

The unknown secondary effects

MFSA's survey wasn't meant to be an exhaustive economic analysis of the effects of a postage rate increase.  As expected, the obvious consequences it showed were a loss of client business as mail becomes less competitive than other media, and a resulting need to shed complement.  Nonetheless, it may be safe to assume that the effect of lost mail volume ripples through other companies that supply printing and paper, transport mail, or process it (including the Postal Service).  Similarly, displaced employees will draw unemployment benefits while contributing less to their local economies and tax jurisdictions.

Whether these consequences will enter into the thinking of Beltway politicians is yet to be seen.  Maybe the Postal Service can't speak out, but MFSA members and the rest of the mailing industry and its employees might want to be more audible. [TOP]

Carriers' Union Happy with McHugh, not USPS

The National Association of Letter Carriers, representing most of the Postal Service's over 200,000 city carriers, has praised recent developments on postal reform while criticizing postal management for its decisions about route evaluations.

Good words for legislators

In its January 14 Bulletin, the union reported on the reintroduction of postal reform legislation in the House by Congressman John McHugh (NY).  The union's president "applauded McHugh's leadership [and that of the] chief cosponsors," Tom Davis (VA), Henry Waxman (CA), and Danny Davis (IL).  The union executive praised them for their support of postal reform "in a manner beneficial to the working men and women" of the Postal Service while "improving the Service's ability to compete in today's technology-driven marketplace."

The NALC article also noted the expected introduction of comparable legislation in the Senate, and mentioned key provisions of the bills, including CSRS escrow, postal responsibility for annuitants' military service, and recommendations from the Presidential Commission.

The union's reporting on the legislation was noticeably different from similar articles produced by the postal clerks' union (APWU) that has been generally unsupportive of postal reform and hostile to many provisions advocated by the mailing industry.  The APWU also has questioned the widely-held belief that the Postal Service's long-term economic health is in peril without substantive statutory reform.

No good words for postal management

The NALC was not so kind in its comments about postal management, especially after being jilted in its efforts to rework the often contentious route evaluation process.  According to the union, in early December "the Postal Service unilaterally canceled the USPS-NALC memorandum" that allowed local unions and management to reach local agreements on route inspections.  The union's president said that this also killed efforts to resolve the route inspection issue at the national level.

Without naming names, the union blamed "flawed technology" and "hard-core regional renegades" that "management was unwilling or unable to reign in."  The result of the actions of these "maverick managers" was that "no local agreement would be consummated in their regions," fostering a return to "daily bickering on the workroom floor."  The union also blamed pursuit of efficiency-based "management bonuses" as a motive for canceling the agreement, claiming that management efforts to generate labor savings through elimination of routes are predicated on "badly distorted" data.  In response to the situation, the NALC said it would "institute a nationwide training program to ensure that mail counts are correct."

Without changing its generally supportive position on postal reform, the union still made it a point to note that "management's turnaround regrettably comes at a time when close cooperation is essential as Congress prepares to resume consideration of postal reform legislation."

The Postal Service made no announcement of its own about the end of the agreement and has not made a public response to the union's assertions. [TOP]

"FCM-vs.-STD" - More Questions, More CSRs

USPS classification managers probably tried to ensure that last year's rulemaking calmed mailing industry concerns over the eligibility of personalized advertising for Standard Mail rates.  (See the November 12, 2004, Postal Points for more information about that rulemaking.)  By producing what was termed a "clarification" of the applicable standards, the Postal Service sought to eliminate much of the ambiguity over the correct classification of such advertising content, and remove a chronic source of inconsistency in how postal standards were interpreted.

However, after the Postal Service issued its original proposal (last April 19), many in the industry offered comments that expressed concerns that the agency's intention to simply clarify rather than change the basic rules was not being fulfilled.  Rather, commenters suggested, the proposed rule seemed to disqualify from Standard Mail eligibility - whether inadvertently or not - some forms of messages that were neither "personal" nor within the proposed definition of eligible content.

In response, the Postal Service again tried to reassure mailers that its rulemaking was not meant to have such a result, and made changes accordingly, it believed, when it issued its final rule on October 27.  The effective date of the clarified rules was set for June 1, 2005, so that potentially affected mailers (and their clients) could make necessary changes in what they planned to mail thereafter as Standard Mail.

Questions reappear

Despite the agency's earnest efforts, doubts apparently persisted that field postal personnel would faithfully apply the clarified rules that USPS HQ had produced.  Among those who were anxious was the American Management Association, a nonprofit organization headquartered in upstate New York, in the district of Congressman John McHugh - of postal reform fame.  Presumably aware of his contacts at postal headquarters, the AMA asked him to present their doubts.

In a January 19 letter to the PMG, McHugh reported the AMA's belief that the revised standards "could potentially impede the good works of the nonprofit community."  He added that "many mailers fear that some types of mail currently prepared for entry as Standard Mail will require substantial modification if it is to remain eligible under the new rule."  He cited instances in which some nonprofits had to pay First-Class rates after USPS personnel ruled that their Standard Mail "contained acknowledgments of prior contributions or support of the nonprofit."  These mailers, McHugh said, thought themselves on safe ground because they'd earlier sought advice from postal personnel and "followed the guidance" of the DMM and customer support rulings.

McHugh questioned whether the Postal Service was intending to move away from its previous interpretations and, if so, would be accordingly amending its published rulings about a variety of fundraising pieces.  He also asked whether the Postal Service intends "to impose a subjective test of trying to guess the ‘intent' of nonprofit mailers when viewing whether a mailpiece qualifies or not."  In closing, he noted that "if our goal is to improve the value of mail as a communications tool, then we must ensure that classification standards are clear and objective and enforced evenly across the mailing community."

The ongoing challenge

Although the Postal Service has just under four months to educate mailers and its own employees about the consistent application of its revised "FCM-vs.STD" rule, McHugh's letter gives an indication of how challenging that task will be.  Even if the concerns expressed in the letter are unfounded, the letter's sentiments suggest that, at the very least, perceptions may need to be changed every bit as much as the mailing standards themselves.

The Postal Service is in the process of issuing new and revised Customer Support Rulings that it says will eventually complete its work of clarifying the "FCM-vs.-STD" rule.  (More appeared in late January; see below.)  Concurrently, the Postal Service has rescinded CSRs PS-30, PS-38, PS-113, and PS-224 because their content is outdated or has been superseded.  Officials are confident that the sum of their work, expressed in the final rule's explanatory "supplementary information," and in subsequent CSRs and flowcharts, will be sufficient to enable users to understand how to ensure a mailpiece qualifies for Standard Mail rates.  Whether these calm concerns like the AMA's remains to be seen.

Illustrating the rules

The Postal Service earlier had issued a chart illustrating the steps in determining the classification of an advertising message's content (see the January 14 issue of Postal Points).  Postal managers have since pointed out that the chart was lacking a notation that it showed the decision process under the current rules.  A second flowchart (below) shows the decision sequence under the standards that take effect on June 1.

Responding to critics who said that the charts required too much technical knowledge on the part of users, the Postal Service said that such criticism failed to recognize that the charts were not intended to stand on their own.  Rather, they were intended solely to illustrate the application of standards that can best be understood only after reading all the materials that have been produced to explain them.  Therefore, users of either chart need to be familiar with the applicable DMM standards and related CSRs in order to more accurately employ either chart and obtain a correct outcome.

More rulings

Four additional rulings appeared in late January, one (PS-318) to illustrate the use of the three-part test contained in the Standard Mail eligibility rules that will be applicable as of June 1, and three other to clarify the applicability of "FCM-vs.-STD" standards to checks (PS-319), hybrid coupon/checks (PS-320), and pay-to-bearer checks (an updated PS-26).

·      The first new ruling, PS-318 (below), uses the example of an advertisement offering to help renew the commission of a notary public.  Because the piece contains specific and detailed information about the notary, information which would be considered "personal" for classification purposes, the mailpiece would not qualify for Standard Mail rates unless it passed the three-part test the Postal Service will begin using as of June 1.

As the ruling explains, examination of the content of the piece found that the conditions of the three criteria were met, thus making the advertisement suitable for Standard Mail rates.

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Customer Support Ruling

Advertising for Services

PS-318 (E610.3.1, E110.3.2)

June 2005

In this CSR a determination will be made as to whether certain "personal" information present in the mailpiece is part of an "explicit" advertisement where all of the personal information is "directly related" to the advertisement and the "exclusive" purpose for including the personal information is in support of the advertisement. The postal standards in this CSR (See Postal Bulletin 22142, dated 11-25-04), were announced in the Federal Register on October 27, 2004 (69 FR 62578-62583), effective June 1, 2005.

The subject of this ruling is the classification of a solicitation by a firm that assists notary publics when applying to renew their appointments.  The mailpiece contains a printed letter advising the addressee his/her Notary Commission expires soon, and urging the addressee to use the services of the firm to renew his/her commission.  Included as an integral part of the mailpiece is a State Application for a Commission as a Notary Public.  The printed letter contains the name and address of the notary public (the addressee) and a state commission number (similar to an account number that merely identifies the addressee), neither of which is generally considered to be "personal information" for mail classification purposes.  There is no other personal information in the letter.

The enclosed application is partially completed and includes personal information; i.e. the date of birth of the addressee, the expiration date of his/her commission, and the state and county in which the commission is held.  The partial completion of the application makes it easier for the addressee to utilize the sender's services; that is, the sender merely needs to verify the accuracy of the information rather than complete the form on his/her own.

Under the provisions of Domestic Mail Manual (DMM) E110.3.2 material containing personal information is subject to First-Class or Express Mail postage.  Personal information is any information specific to the addressee.  DMM E610.3.1 provides that personal information may not be included in a Standard Mail mailpiece unless three conditions are met: the mailpiece contains explicit advertising for a product or service for sale or lease or an explicit solicitation for a donation; all of the personal information is directly related to the advertising or solicitation; and the exclusive reason for inclusion of all of the personal information is to support the advertising or solicitation in the mailpiece.

Examination of the mailpiece demonstrates that it contains personal information; i.e. the information on the partially completed application form.  Accordingly, the piece must be examined for compliance with the three-part test in DMM E610.3.1.

Review discloses that the piece contains an explicit advertisement for a service; i.e., the services of the sender available for a fee to renew the addressee's commission as a notary public.  The next step in the process is to consider whether all of the personal information is related directly to the advertising.  The personal information included on the application form is required to be furnished on the State's application in order to apply for re-appointment as a notary public.  As explained in the printed letter accompanying the form, the information is included to persuade the addressee of the convenience of using the sender's service.  Accordingly, all of the personal information in this case is directly related to the advertising in the mailpiece.

The final step is to consider whether there was any purpose for inclusion of the personal information other than to support the advertising.  Nothing in the mailpiece indicates the personal information is included for any purpose other than to convince the addressee to utilize the sender's services to apply for renewal of his or her appointment as a notary.  Therefore, it is concluded that all of the information in the mailpiece appears to have been provided solely for the purpose of enhancing the advertised service.

Based on the above, the mailing was determined to be eligible for the Standard Mail rates.

Sherry Freda, Manager [TOP]

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·      Two of the other rulings, PS-26 and PS-319 (below), were provided to clarify when checks must be mailed as First-Class Mail.  Both focus on the endorsement on a check as the key determinant of its classification.  If a check or is made out to a  specific individual, it's First-Class matter, regardless of whether other elements of the check, such as a date or amount, are completed.  Conversely, a check that is unendorsed, or is made out to the addressee or "bearer," is not personal and can be mailed as Standard Mail.

In effect, the two rulings restate existing policy that makes refund, rebate, and promotional checks - typically made payable to an addressee or "bearer" - safe to mail at Standard Mail rates.

------------------------------------------------------------------------------------------------------------------------------

Customer Support Ruling

Pay-to-Bearer Checks - PS-26 (E110, E610)

UPDATED January 2005

In this CSR a determination will be made as to whether a "check" is "personal" information and mailable only at First-Class Mail or Express Mail rates.

This ruling concerns the classification of "Bearer" checks that are often found in mailpieces that serve as purchase incentives or after-purchase rebates, e.g., a check issued by a retailer styled as "Pay to John Doe or Bearer" in the amount of $5.00.

Domestic Mail Manual (DMM) E110.1.4, prescribes that matter containing personal information, e.g., matter that is intended for a specific individual and contains current (timely, updated) information may only be mailed as First-Class Mail or as Express Mail.

A check which is made payable only to the addressee or only to a specific individual, i.e., "Pay to the order of John Doe," "Pay to Jane Doe or order," is considered "personal" information and generally is mailable only at the First-Class rates of postage.

A printed (computer-generated) bearer check, that may be negotiated by anyone who presents it for payment would be acceptable at the Standard Mail rates.  Examples include those styled to "Pay to John Doe or Bearer," "Pay to Bearer," "Pay to Addressee or Bearer," "Pay to Cash," "Pay to the Order of John Doe or Bearer," "Pay to the Order of Bearer" or "Pay to the Order of Bearer or John Doe Addressee."

Since the $5.00 rebate check in the example is a "bearer" check that can be negotiated by anyone, it does not have the characteristics of "personal information" and is therefore, not required to be mailed as First-Class Mail.  The bearer check may be mailed at the Standard Mail rates.

Sherry Freda, Manager

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Customer Support Ruling

Checks -- PS-319 (E110.1.4)

January 2005

In this CSR a determination will be made as to whether a "check" is considered "personal information" and mailable only at First-Class Mail or Express Mail rates.

This ruling concerns the classification of a printed mailpiece with a "convenience" check enclosed styled "To the order of John M. Doe."  The "amount" and "date" spaces on the check were left blank.

Domestic Mail Manual (DMM) E110.1.4, requires that matter that has the character of actual and personal correspondence must be mailed as First-Class Mail or Express Mail, e.g., directed to a specified individual and comprised of timely information.

A check which is made payable only to the addressee or a specific individual(s) is personal correspondence and is mailable only at the First-Class rates of postage.  Examples include "Pay to the order of John Doe," or "Pay to Jane Doe or order."  As explained in PS-26, a printed "bearer check," styled, for example, "Pay to John Doe or Bearer" would be acceptable at the Standard Mail rates.

Since the mailpiece includes a check made payable "To the order of John M. Doe" it is First-Class Mail despite the "amount" or other spaces such as "date" being left blank for completion.  Similar checks styled payable "To the order of" with the payee line left blank are not required to be mailed as First-Class Mail.

Sherry Freda, Manager

------------------------------------------------------------------------------------------------------------------------------

·      The third CSR deals with a new variant of the "bearer" check, one that is provided to a recipient for use as a coupon or as a voucher toward the purchase of a specific product or any purchase from a specific merchant or chain of stores.  Although these checks may be made out to a specific store or company (e.g., "Best Buy"), the Postal Service rightly differentiated this from singularly-endorsed "personal" checks.  As a result, its ruling is that "hybrid coupon/checks" are not First-Class matter.

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Customer Support Ruling

Hybrid Coupon/Checks - PS-320 (E110.1.4, E610.2.2)

January 2005

In this CSR, a determination will be made as to whether a "check," while present in a mailpiece, is "personal" information mailable only as First-Class Mail or at Express Mail rates.

This ruling concerns the classification of a "Pay to the order of retailer check" mailpiece that is part of an advertisement for a specific product, e.g., baby food.

Domestic Mail Manual (DMM) E110.1.4, prescribes that matter containing personal information, e.g., matter that is intended for a specific individual and contains current (timely, updated) information may only be mailed as First-Class Mail or as Express Mail.

Normally, a check which is made payable only to the addressee or only to a specific individual is personal correspondence and generally is mailable only at the First-Class rates of postage.  In contrast, a printed (computer-generated) bearer check, styled either "Pay to John Doe or Bearer," "Pay to Bearer," or "Pay to Addressee or Bearer," would generally be acceptable at the Standard Mail rates.  That is because the "bearer" check does not take on the characteristic of "personal" information, e.g., directed to a specified individual.  Such cash or bearer checks may be negotiated by anyone who presents them for payment.

For the sake of discussion, the "Pay to the order of retailer checks" in question will be referred to as hybrid coupon/checks.  Hybrid coupon/checks are a relatively new innovation in marketing.  Although the mailpieces contain "Pay to Order" checks, the circumstances here differ because the payee is not the addressee or related entity.  The hybrid coupon/check is a coupon providing a discount on the advertised product.  The coupon may be used by the addressee or for that matter any person that possesses it (in other words it is a "bearer" coupon to the addressee).  When used by a consumer, it becomes a Pay to Order check to the retailer that makes the sale.  The retailer can deposit the check along with other checks taken during a day's business.

In view of the above, it is concluded that the mailpiece in question does not contain "personal information" requiring the piece to be mailed as First-Class Mail.  Such mailpieces are eligible as Standard Mail.

Sherry Freda, Manager

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Postal officials say that more new and revised CSRs will be disseminated before the National Postal Forum in late March. [TOP]

Postal Bulletin Stuff

In the January 20 issue:

·        Effective January 20, the IMM and Publication 51 are revised to reflect new delivery requirements for Global Airmail parcel post items (air parcels) and Global Express Mail items to 23 European nations.  The revisions generally concern addressing standards and the maximum size and weight of mailed items.

·        Additional details about the new "semi-clear" plastic mailbags being introduced to replace canvas sacks.  The article noted several features of what the Postal Service refers to as "two new semi-clear plastic mailbags," including:

o     The new mailbags are made entirely of a recyclable polypropylene plastic; two-layer construction prevents moisture or contaminates from entering or leaking from the mailbags once closed.

o     Each mailbag has a fill line printed on the exterior to identify the maximum load level for mail to ensure easy closure.

o     The "semi-clear" sacks are clear enough to enable handlers to see a mailbag's contents and determine its appropriate handling.

o     Four grommet holes, outlined by black circles, are punched through the material at the top edge of the mailbags to allow use with either sack racks or other compatible equipment.

o     Each sack has a Velcro strap sewn to the top outside edge for use in securing the mailbag.  The strap, similar to Velcro used in clothing and shoes, can be used for repeated securing and opening of the mailbag.

o     A designated labeling area is printed on the front of each mailbag for placement of "scan-where-you-band" or other destination labeling.  In addition, a tray label pocket is affixed within the label area to hold a 2-inch wide barcoded distribution label.

The complete text of current and back issues of the Postal Bulletin is available at www.usps.com/cpim/ftp/bulletin/pb.htm . [TOP]

Short Subjects

USPS board organizes.

The Postal Service's Board of Governors, restocked with new members to fill several vacancies, organized its leadership at its first meeting of 2005, held in Washington.  Filling the top slots are James Miller as Chairman and Alan Kessler as Vice-Chairman.

Miller is an interesting choice because, having once served as Director of the Office of Management and Budget, he had shown interest in postal privatization.  This was not overlooked by labor groups when Miller was named as a recess appointee by President Bush in April 2003.  He remains employed by a regulatory consulting group affiliated with an international law firm.

Kessler, appointed in November 2000, is (literally) a Philadelphia lawyer, as was recently-departed chairman David Fineman.  Kessler's legal specialization is in "securities, antitrust, toxic tort and civil rights cases," according to the Postal Service, disciplines he hopefully will not need to apply in his postal position.  Kessler also serves as chair of the board's strategic planning committee. [TOP]

Newbie to preside over case.

Dawn Tisdale, the latest appointee to the Postal Rate Commission, has been appointed by the PRC's chairman to serve as presiding officer for Docket MC2005-1, the Postal Service's request for an experimental premium forwarding service, filed last November 19 (see the December 3, 2004, issue of Postal Points).  Tisdale was an unusually controversial choice to be a postal rate commissioner, and was openly criticized for what many observers felt was his lack of professional or educational credentials for the position.  However, despite these complaints, the fellow-Texan Bush appointee was confirmed by the Senate late last year. [TOP]

Facility comings and goings.

Coming.

At their January meeting, the postal Board of Governors approved spending $82 million for a new Southern Maine processing and distribution center.  The 429,000-square-foot facility, to be located on about ten acres in Scarborough, south of Portland, is expected to open in April 2007 with a complement of more than 800.  The new plant has been on the drawing board for over eight years but was deferred by budget constraints.  As reported by WMTW, the current processing plant will be renovated to be Portland's main post office.

Returning.

The postal plant in Hamilton Township (NJ) that was one of the two contaminated by anthrax in 2001 will begin reopening in late February.  According to nj.com, the transition of public services and postal operations from other locations will be completed by mid-March.

The reopening follows a fumigation with chlorine dioxide in October 2003 and other measures to clean and decontaminate the interior of the building.  Further renovations were undertaken after that, running the total cost to get the facility back into service to $80-$100 million.

Goings.

The Postal Service has finalized plans to close its processing center in Marina del Rey (CA), according to the Torrance Daily Breeze.  Mail currently processed there will be moved to the plant in south central Los Angeles, about ten miles away.  Marina's 900 employees will also be reassigned, and retail service will remain available from several nearby outlets.

Meanwhile, the Duluth (MN) News-Tribune reports that, as speculated earlier, the Duluth remote encoding center will be closed by mid-year, displacing about 300 temporary and 90 career employees.  Separately, a Princeton (NJ) APWU steward claims that the Princeton REC will also close in July.  The two RECs are among only 17 remaining of the 55 opened in the mid-1990s. [TOP]

Crime watch.

Guarantor of postal test success.

An Indiana man has pled guilty to federal fraud charges of selling information that assured success on postal employment tests - even though the information was publicly available for free.  Over 100,000 people had paid $46.95 to get the information.  The Northwest Indiana Times reports that the plea will conclude action on a 60-count indictment filed four years ago.  Under a plea agreement, the man will plead to one count each of mail fraud, wire fraud, money laundering, and filing a false tax return, and must pay $450,000 in back state taxes.  He's also facing a jail sentence of from 57 to 71 months.

Inspector sentenced.

A Camden (NJ) judge has sentenced a US postal inspector to ten months in prison, imposed a $10,000 fine, and ordered $16,000 in restitution following the inspector's guilty plea to mail fraud charges.  The Washington Times reports that the inspector, whose assignment had been to investigate credit card fraud schemes, used the opportunity to gain access to other persons' credit cards and personal information, and then to run up over $19,000 in personal charges on the stolen cards, according to the US Department of Justice officials.

Why mail trucks don't go fast.

In 2003, a Florida man kidnapped a letter carrier and hijacked the carrier's truck, leading Miami police on a slow-speed chase that got national TV coverage.  (The man was convicted and sentenced to life in prison.)  Then, in late December 2004, according to the South Florida Sun-Sentinel, a Pembroke Pines letter carrier led postal inspectors on a "medium-speed" chase when they tried to arrest him on undisclosed charges.  Weaving his truck through traffic, the carrier eventually pulled into the parking lot of a postal retail outlet and surrendered.  Even though the carrier was apprehended, the mail for his route was still delivered, by another carrier.

New trooper gets lucky.

Just eleven days out of the police academy, a new Washington state trooper didn't anticipate much when he approached who he thought was a distressed driver in a stopped SUV.  However, according to the Seattle Times, the trooper noticed a knife and prescription drugs in the vehicle.  The occupant, who had no license and said he was waiting for a friend, tried to flee but fell into brush and was arrested.  Other troopers who came to help the rookie found three trash bags of stolen mail, including a check for $375,000.  This led investigators to suspect the man then in custody was responsible for stealing over $700,000 in checks from mailboxes across Snohomish County.  If that wasn't enough, police also found that the SUV was stolen. [TOP]

Lottery news.

Sharing is good.

The Cleveland (OH) Plain Dealer reports that last year's squabble over the proceeds from a winning Ohio lottery ticket seems to have been settled.  Following a trial, the jury determined that the winning ticket was not purchased separately as a letter carrier had claimed.  As a result, he must share the $175,000 prize with nineteen other co-workers at the Olmstead Falls post office who‘d been putting in $5 a week for nearly four years to buy lottery tickets.  Before taxes (and, now, lawyers' fees), each will get $8,750.

Not sharing is better.

A Florida postal employee, who drives a forklift and made $65,000 in 2004, including overtime, is also a regular Lotto player.  That got him a $34.7 million lump sum payment after hitting the big jackpot late last year.  But two weeks after winning, his estranged wife filed for divorce and a share of the prize.  Finally, he agreed to pay her $5.25 million, set aside another $1 million for their son, and kept the rest. [TOP]

Foreign postings.

Divvying-up the Royal Mail.

The Independent reports that Postwatch, the official watchdog over Britain's Royal Mail, has advocated breaking-up the post into two separate entities, with separate CEOs.  Postwatch's idea is to divide the Royal Mail's operational components, such as processing and delivery, from its marketing functions.  The proposal is supposed to prevent cross-subsidization in future years when competing mail carriers are allowed to begin operating and will be charged fees to access the Royal Mail delivery network.  The Department of Trade, the post's sole shareholder, did not offer an opinion on the plan.  Postwatch is funded by the Royal Mail but is independent from it and from Postcomm, Britain's postal regulator.

UPU gets new executive.

The 190-member Universal Postal Union has a new director; Edouard Dayan, a French postal official, has assumed the post vacated by former USPS executive Tom Leavey.  The UN News Service said that the new director will undertake implementation of the Bucharest World Postal Strategy, a plan for development of worldwide postal services adopted at last year's UPU conference.  The UPU was founded in 1874 and now operates as a specialized agency of the UN.

Oh, THAT Ascension.

Reuters and the BBC report that the Royal Mail apparently forgot last October that Ascension Island existed.  Even though it's British territory, mail for the isolated South Atlantic island was misdirected for months to other like-named places, leaving residents without service through Christmas.  The problem was discovered when the island's post office called back to Britain asking where all their mail was.  The red-faced Royal Mail apologized for the protracted error, by which it sent mail for Georgetown, the island's capital, to Georgetown, Guyana, on the South American mainland, and other mail for Ascension to Asuncion, Paraguay.

Is this a "postal service"?

People from Jamaica and other locations have learned that the country's postal system can be used effectively to distribute some of the islands less legal products.  As reported by the Jamaica-Gleaner, police in England arrested two men who had received a parcel that contained illegal drugs packed inside drinking straws.  The package, appropriately marked "special delivery," was sent from Jamaica.  Jamaican police were investigating, and Jamaican postal officials would offer no comment.  Police in England and other destinations, aware that the mail is one of the channels used to distribute illegal drugs, have apparently given Jamaican-originating parcels particular attention.

NAFTA argument in Canada.

A section of the North American Free Trade Agreement adopted in 1994 allows a private company to seek redress for government policies that are alleged to harm the company's business, such as a subsidy for a public service.

Under that section, United Parcel Service filed a $200 million claim asserting that Canadian government support for Canada Post is an illegal subsidy that gives the post an inappropriate advantage over private firms like UPS.  The case will be heard by a non-judicial panel of arbiters whose decisions are binding because of Canada's acceptance of NAFTA.

In turn, the UPS claim has precipitated a suit by the Council of Canadians and the Canadian Union of Postal Workers.  The Canadian Press says the groups are challenging the validity of Canada's agreement to the NAFTA provision, asserting that it was an unconstitutional accession of Canadian rights and judicial processes.  As a result, the groups argue, private companies could challenge a wide variety of government services, from postal services to health care, claiming the government was inhibiting private enterprise. [TOP]

C'est trop froid!

Letter carriers in France seem to be more delicate than their American counterparts.  According to Terradaily, all but six of seventy carriers at the post office in St. Etienne, in south central France, refused to deliver their routes after being denied extra pay for enduring the cold.  The carriers had also demanded that their scooters be replaced with cars to better deal with snowy weather.  The French postal service, La Poste, termed the action "illegal."

Сделайте мой день

Apparently Russian letter carriers, though hardier, are less inclined to suffer nonsense.  As reported by Mosnews, the Russian government has ordered that clerks of the Federal Post Service be issued service weapons and ammunition, as well as mace and electric stun guns.  Handguns will be issued to post office managers as well as to "duty postmen at railway stations" and "postmen who deliver cash money and the drivers of postal trucks."

Decriminalizing fruit flies.

Few people may have ever considered the matter but, pending a rule change in May, it's illegal to ship fruit files by international mail.  Researchers who use the insects to study genetic mutation had sent stocks of the insect back and forth for years until someone checked the rules.  Under Universal Postal Union regulations written early in the last century, only "live bees, leeches, and silkworms" and "predators and parasites of injurious insects" were permitted.  Scientists beseeched the government to get the ban lifted, so  the UPU acted favorably on a proposal at its 2004 convention to legitimize international mailing of the insects.  After initially setting an effective date of January 1, 2006, for the rule change, the UPU agreed to amend that date to May 1, 2005.

Now, what's to be done with all those sets of teensy handcuffs? [TOP]

House committee organizes.

The membership of the House Committee on Government Reform has been finalized for the 109th Congress.

Chairman Tom Davis (VA)

Republicans

Christopher Shays (CT), Vice-Chair

Dan Burton (IN)

Ileana Ros-Lehtinen (FL)

John M. McHugh (NY)

John L. Mica (FL)

Gil Gutknecht (MN)

Mark E. Souder (IN)

Steven C. LaTourette (OH)

Todd Russell Platts (PA)

Chris Cannon (UT)

John J. Duncan, Jr. (TN)

Candice S. Miller (MI)

Michael R. Turner (OH)

Katherine Harris (FL)

Darrell Issa (CA)

Ginny Brown-Waite (FL)

Jon Porter (NV)

Kenny Marchant (TX)

Lynn A. Westmoreland (GA)

Patrick T. McHenry (NC)

Charles W. Dent (PA)

Virginia Foxx (NC)

Democrats

Henry A. Waxman (CA)

Tom Lantos (CA)

Major R. Owens (NY)

Edolphus Towns (NY)

Paul E. Kanjorski (PA)

Carolyn B. Maloney (NY)

Elijah E. Cummings (MD)

Dennis J. Kucinich (OH)

Danny K. Davis (IL)

John F. Tierney (MA)

Wm. Lacy Clay (MO)

Diane E. Watson (CA)

Stephen F. Lynch (MA)

Chris Van Hollen (MD)

Linda T. Sanchez (CA)

C.A. Dutch Ruppersberger (MD)

Brian Higgins (NY)

Eleanor Holmes Norton (DC)*

Independent

Bernard Sanders (VT)

The committee offices are at 2157 Rayburn House Office Building, Washington DC 20515; phone (202) 225-5074; fax (202) 225-3974.

*  Norton was not listed on the committee roster but her office claims she is still a member. [TOP]

USPS OKs pubs in parcels.

The Postal Service has announced a rule change that will allow sample copies of Periodicals to be enclosed with merchandise mailed at parcel post or bound printed matter rates.  The revised standards implement a small provision buried in a classification case concluded last summer.  That case, MC2004-1, "Experimental Periodicals Co-Palletization Dropship Discounts for High-Editorial Publications," was also the vehicle for what the Governors, in their decision accepting the PRC's action, called "unrelated" to the primary purpose for the filing but still offering "another way to promote publications."

The Postal Service said it received only three comments on its proposed rule, issued last September 2, and that all three addressed concerns "outside the scope of this rulemaking."  Even though they weren't announced until the January 19 Federal Register, the amended DMM provisions (below) were made effective as of October 3, 2004.

E710  Basic Standards

1.0  BASIC INFORMATION

1.1  Definition

[Amend 1.1 by revising the first sentence to read as follows:]

Package Services mail consists of mailable matter that is neither mailed or required to be mailed as First-Class Mail nor entered as Periodicals (except as permitted under 1.7) unless permitted or required by standard or as Customized MarketMail under E660. * * *

* * * * *

[Add new section 1.7 to read as follows:]

1.7  Attachments or Enclosures of Periodicals Sample Copies

Sample copies of authorized and pending Periodicals publications may be enclosed or attached with merchandise sent at Parcel Post or Bound Printed Matter rates.  Postage at the Parcel Post or Bound Printed Matter rates is based on the combined weight of the host piece and the sample copies enclosed. [TOP]

USPS buys tracking system.

The Postal Service has awarded a three-year contract to a New Jersey company for the deployment of a wireless vehicle tracking system.  The "indefinite quantity" contract has a minimum value of $4 million, which will cover the initial installation of systems at eight postal facilities.

According to the vendor, I.D. Systems, each system consists of "intelligent wireless devices" in vehicles, a "patented communication infrastructure," and software that provides information about vehicle location, access, and use.  The contract also includes for hardware installation, user training, and help desk support, activities that the vendor will subcontract to Unisys.  Eventually, the RFID technology-based systems could be installed in up to 460 postal facilities nationwide.

Postal recycling.

The Postal Service has turned its problem with undeliverable book shipments into a blessing for a variety of libraries and other institutions.  According to the Hampton Roads (VA) Virginian-Pilot, post offices in the area (metropolitan Norfolk) regularly get dozens of books that are undeliverable-as-addressed because of a bad address, because they're refused by the addressee, or because they're dropped in mailboxes for return.  The problem is that the senders don't want to pay to get the books back, leaving the post office to dispose of them.  But rather than send them off to the dumpster, or to the shredder, local post offices contribute the books to local libraries, shelters, jails, and to the military.  Representatives of the receiving institutions make regular visits to pick up donations of whatever may be available.  The potential variety intrigues the lucky donees; one commented that "every box is a new adventure." [TOP]

PO closed by fungus.

In recent years, people have become more aware of the health risks of exposure to mold.  So, when black mold was found growing in the post office in Otho (IA), about 60 miles northwest of Des Moines, the Postal Service closed the place.  The small town's residents' mail was made available at the Fort Dodge post office, eight miles north, but they wanted local service restored.  The task of cleaning the slimy fungus "is near impossible," said a postal spokesperson, so "the chances of going back [to the same facility] are slim."  Building a new post office is possible, but Otho is behind six other places on the list.  So, for now, the fungus seems to be winning.

FedEx outlasts USPS.

The contest is only for bragging rights, but FedEx won the round this year.  As reported by the Holland (MI) Sentinel, a FedEx deliveryman and a Postal Service letter carrier each had a route that served parts of downtown.  When they'd see each other, there would be some good-natured barbs, especially when they appeared in their summer shorts.  Eventually, a contest developed to see who could outlast the other for wearing shorts after the summer was over - very over.

Holland is about thirty miles west of Grand Rapids, nearly on the eastern shore of Lake Michigan, so wearing shorts in the winter is definitely not thermally correct.  Just the same, last year the duel lasted into January.  The mail carrier won when the FedEx courier came to work after sick leave, wearing long pants.  This year, a winter storm helped settle the bet when the postal carrier worked on a Sunday, wearing long pants.  The apparently annual battle is a source of amusement to downtown businesses, who refer to the contestants as the carriers who don't know its winter. [TOP]

PRC seeks NSA comments.

The Postal Rate Commission published a notice in the January 31 Federal Register by which it invited "comments in a proceeding to consider potential changes to the Commission rules for considering functionally equivalent Negotiated Service Agreements."  The PRC said that the comments "will be used to evaluate whether improvements should be made to the rules to facilitate the Commission's review of future requests predicated on functionally equivalent Negotiated Service Agreements."  The Commission explained that it has had only one "baseline" NSA (the first, for Capital One) and two subsequent "functionally equivalent" NSAs modeled on it (for Discover Financial and Bank One), but it wants to determine whether its rules for dealing with future such cases are adequate.  Comments are due March 28.

Columnist rants at direct mail.

Using the platform of an opinion piece in the January 23 Portland Oregonian, a columnist relieved himself of his unhappiness about getting direct mail.  His initial complaint was about "getting catalogs that have nothing to do with [him]," but he also complained about the volume and variety of ads he receives.  He criticized the consequences of aggregating and sharing personal data about individuals - such as buying preferences and recent purchases - and claimed that poor marketing and list choices result in not only too much mail but it the distribution of ads to inappropriate recipients.  He cited promotions he's received for hair removal as an example of poor targeting of advertisements, and that his cat and dog receive about the same number of credit card offers.

Of course, he had a factoid to illustrate his claim of "too much mail," alleging that "American households receive an average of 768 direct mail offers a year, while households in Japan, the world's second largest economy, receive only 86." [TOP]

Finding the sources.

Postal Points readers occasionally want to read more from the "official" sources of postal information; here are some:

The Federal Register:

http://www.gpoaccess.gov/fr/browse.html

Postal Explorer (DMM on-line):

http://pe.usps.gov/

Postal Rate Commission:

http://www.prc.gov/