Classification Reform; Implementation Standards

SUMMARY: This notice provides updated information on the rulemaking

process that the Postal Service is following to implement pending

classification reform proposals, and to obtain comments and proposals

on currently suggested implementing standards.

DATES: Comments on the implementation process or proposed standards

must be received on or before September 29, 1995.

ADDRESSES: Mail or deliver written comments to the Manager, Mailing

Standards, USPS Headquarters, 475 L'Enfant Plaza SW., Room 6800,

Washington, DC 20260-2419. Copies of all written comments will be

available at the above address for inspection and photocopying between

9 a.m. and 4 p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Leo F. Raymond, (202) 268-5199.

SUPPLEMENTARY INFORMATION: On March 24, 1995, pursuant to its authority

under 39.U.S.C. 3621, et. seq., the Postal Service filed with the

Postal Rate Commission (PRC) a request for a recommended decision on a

number of mail classification reform proposals. The PRC designated the

filing as Docket No. MC95-1, and proceedings are currently under way

before the PRC in accordance with 39 U.S.C. 3624 and the PRC's rules of

practice under 39 CFR 3001. A notice of the filing, with a description

of the Postal Service's proposals, was published on April 3, 1995, in

the Federal Register by the PRC (60 FR 16888-16893).

On June 29, 1995, the Postal Service published for public comment

in the Federal Register an advance notice of proposed rulemaking (60 FR

34056-34069). That notice included an overview of the Postal Service's

proposals in MC95-1, the process that was used in developing them, and

the instant process being used to prepare for implementation of

classification reform and to begin development of the standards to be

used eventually in the Domestic Mail Manual (DMM). The notice also

contained detailed information about issues that had been developed for

consideration as part of the implementation process, prepared in a

format that paralleled the listing of requirements in the Domestic Mail

Classification Schedule (DMCS) portion of the MC95-1 filing. Among the

purposes for publishing the advance notice was the elicitation of

comments on the proposed criteria under consideration for inclusion in

DMM implementing standards, many of which had been developed with the

advice of four Classification Reform Implementation Advisory Groups

(IAGs), composed of appropriate Postal Service personnel and

Representatives of the mailing community, convened as part of the

process described in the notice. Readers who are unfamiliar with the

content of the Postal Service's MC95-1 filing, or the process under way

for implementation of MC95-1, are asked to review the June 29 notice

for more details.

This second notice serves both to report a summary of the comments

received from the earlier notice and to invite further comment from

interested parties, both on the proposals shown below (that have been

updated based on comments on the first notice and recent IAG

discussions) and on the implementation process generally.

However, readers are reminded that this implementation rulemaking

process is not a forum for dialogue about the contents of the Postal

Service's filing; the merits of testimony, data, or evidence it has

submitted in that case; or philosophical or public policy issues

related to universal postal service, rate design, or the role of

second-class mail. Those are among the issues being considered in the

classification reform case pending before the PRC. As such, comments in

those areas are beyond the scope of this rulemaking and will not be

discussed if submitted.

Following receipt and review of comments on this second notice, the

Postal Service will revise its proposed implementation criteria as

appropriate and use them as the basis for developing the specific DMM

standards that will be proposed for adoption if the changes proposed

MC95-1 are adopted. The Postal Service plans to publish these DMM

provisions as a proposed rule for notice and comment in the Federal

Register in November.

Pursuant to 39 U.S.C. 3624, the PRC issues a recommended decision

on the Postal Service's Request; this recommended decision is expected

in January 1996. The PRC's decision is sent to the Governors of the

Postal Service who, pursuant to 39 U.S.C. 3625, issue a final decision

on the PRC's recommendations. The Board of Governors then will set an

implementation date. Publication of a notice announcing the Governors'

decision and the issuance of final Domestic Mail Classification

Schedule and Rate Schedule changes will be made immediately after the

Governors act. After reviewing the comments received on the proposed

rule published in the November notice in light of the PRC's

recommendation and the Governors' decision, a final rule will be

published adopting the appropriate DMM implementing standards.

Publication of this notice will be either concurrent with publication

of the Governors' decision or as soon thereafter as possible.

The succeeding section of the notice summarizes comment received on

the first notice and discussions from recent IAG meetings. This

material is organized by the subject areas represented by the IAGs

letters, flats, addressing, and publications. Miscellaneous issues are

reported thereafter.

Finally, the remainder of this notice presents the proposed

implementation criteria in revised form to reflect changes that have

been made based on the comments as well as new material. For ease of

review, as in the first notice, this information is organized by the

classes, subclasses, and rate categories proposed by the Postal Service

in its MC95-1 filing. Each heading is followed by one or more

statements of the pertinent classification language proposed by the

Postal Service for inclusion or retention in the DMCS. A DMCS section

reference is included in parentheses at the end of each statement for

identification and reference purposes. (Readers are reminded that,

because these proposed DMCS provisions are under review before the PRC

as prescribed by 39 U.S.C. 3623, they are not subject to comment in

this rulemaking process.) Where appropriate, following each DMCS

statement, and indented under it, are statements of the mailing

standards that the Postal Service currently plans to implement through

DMM changes if the pending classification changes are adopted. As in

the earlier notice, the Postal Service has also included statements of

pending issues related to these proposals. Readers are invited to

comment on the proposed DMM provisions and the related issues that are

shown, and to identify any additional proposals or issues that warrant

inclusion in these classification reform implementation plans.

Summary of Comments From First Notice

The Postal Service received 89 pieces of correspondence offering a

total of 538 comments on the June 29 notice.

[[Page 45299]]

Respondents included most major mailer associations, some individual

publishers, printers, presort bureaus, mailers, and one private

citizen. The comments do not lend themselves to easy categorization or

direct association with specific provisions of the first notice's

content. Rather, commenters tended to speak to general areas of

concern, such as automation issues, or to common aspects of several

proposed criteria, such as tray volumes for several different presort

levels. Although the proposals were set forth in the first notice by

class of mail or rate to which they pertained, comments tended to

aggregate these into a single response.

The largest single area to which comments were generally directed

was the preparation of automation subclass mail (First-Class and

Standard); approximately 175 comments discussed issues in that area.

Addressing issues were the focus of 88 comments, although most

commenters mentioned addressing issues to some degree. Publications

Service was the subject of 67 comments, with 7 other speaking about

regular Periodicals as well. Nonautomation First-Class (Retail

subclass) and Standard Mail (Regular and Enhanced Carrier Route

subclasses) received a total of 25 and 87 comments, respectively.

Another 89 comments discussed general issues, including some (like the

role of second-class mail or the wisdom of classification reform) that

are beyond the scope of this rulemaking. The specific points raised in

the comments are presented below and, to the extent that changes have

been made based on the comments, are reflected in the amended proposals

that follow.

Comments Regarding Letter Mail

General

Five comments were received that suggested changes to the minimum

volume required for mailing at presort rates. Presort minimums are a

matter before the PRC and are beyond the scope of this rulemaking.

Four comments were received concerning preparation of letter mail

on pallets. Palletization issues (including the preparation of bundles

and trays on pallets) are being considered as part of a separate

rulemaking.

Automation Subclasses

100% Barcoding. Twenty-seven commenters responded to the proposal

for 100% delivery point barcoded pieces within the Automation

subclasses for First-Class and Standard letters. Two commenters

supported this requirement. Seven commenters indicated that splitting

their mail lists into two separate mailstreams, one with delivery point

barcodes and one without, will increase their mail preparation expenses

and may result in more residual mail. One commenter was concerned that

this could be a bigger problem for multiline optical character reader

(MLOCR) combination/value added mailers. Three commenters were

concerned about the need to re-meter pieces that could not be barcoded

in an MLOCR environment; one indicated that the need to remeter could

result in a 1-day delay of the mail. Two commenters indicated that this

requirement would result in more single-piece rate mail, with one

further stating that this was because smaller mailers may not have

enough nonbarcoded pieces remaining after preparing the automation

mailing to meet the separate 500- or 200-piece minimum quantity

required for a separate mailing. Three commenters requested that

single-piece rate mail be allowed to be included as ``residual'' to an

Automation subclass mailing, thereby eliminating the need to re-meter

and submit separate mailings with separate statements. Three commenters

indicated that their organizations could not meet this requirement. Six

commenters believed that this requirement should be phased in. One

commenter recommended that the 100% requirement be revised to 95%. Two

commenters wanted an explanation of what tolerance for error would be

permitted. One commenter wanted an explanation of why this is needed

because they believe that it will be more costly to the Postal Service

to run nonbarcoded pieces through OCR equipment at origin to apply

barcodes that it would be to sort nonbarcoded mail in with barcoded

mail in destination trays and apply barcodes to nonbarcoded pieces at

destination.

Seven commenters indicated the requirement for 100% barcoding for

Automation subclass rate qualification should be deleted because the

Postal Service cannot provide tools for customers to reach 100%

barcoding. These commenters indicated that the postal databases do not

contain information for new homes, rural addresses converted to street-

style addressing, and some rural route post office boxes; and that the

database contains uncodable addresses. One commenter was concemed that

addressing conventions in Puerto Rico do not lend themselves to

delivery point coding. The Postal Service developed and promoted the

use of Address Element Correction service for the purpose of assisting

mailers to improve uncodable addresses. The Postal Service is currently

exploring broader access to the service by licensing the address-

matching software it has developed to commercial service providers.

Recent meetings with representatives of the government of Puerto Rico

are allowing the Postal Service to develop software that deals more

easily with the unique addressing challenges found on the islands.

When mailers mix delivery point barcoded mail and non-delivery

point barcoded mail within 3-digit and residual portions of their

barcoded rate mailings, as is currently permitted, the non-delivery

point barcoded mail is rejected from barcode sorters and must be rerun

on MLOCRs or multiposition letter sorting machines (MPLSMs). Requiring

mailers to prepare two separate mailstreams before presenting mail to

the Postal Service eliminates these extra steps in handling non-

delivery point barcoded mail and allows it to be directed properly from

the start, resulting in more efficient Postal Service processing. If

these requirements result in more nonbarcoded mail presented for OCR

processing at the origin post office, the Postal Service believes that

it has the operational capacity to process this mail. The processing

efficiencies the Postal Service will gain from a 100% barcoded

mailstream are reflected in the lower rates proposed for the Automation

subclasses. In return for these larger discounts, mailers might have to

perform the additional work of separating noncompatible mail. The

Postal Service has noted the problems indicated by the commenters such

as remetering the pieces and will work toward resolving these issues

with mailers prior to implementation of classification reform.

``Heavy Letter Mail.'' Two commenters raised questions as to

whether the maximum weight limit for automation letters would be

increased to the ``break point'' for third-class bulk mail under

classification reform. The maximum weight for automation-compatible

letters is being studied as part of a separate program already under

way using the ``break point'' for special third-class bulk mail. The

results of this program will be announced separately and reflected in

the implementing standards for MC95-1 as appropriate.

Carrier Route Rates. Nine comments were received regarding the

carrier route barcoded rate. Two commenters indicated that limiting

carrier route rates to areas where mail will be sequenced either

manually or by carrier sequence barcode sorter (CSBCS) equipment allows

some mailers an

[[Page 45300]]

unfair rate advantage over others based on geography rather than mail

quality. One commenter mistakenly believed that carrier route rates

would be unavailable to routes where the Postal Service did not have

barcode sorters. Three commenters indicated that they needed to see the

list before they could assess its impact on their operations. One

commenter indicated that requiring mail to be matched against a list to

split off pieces that cannot qualify for the carrier route rates will

increase mailer processing costs. Two commenters indicated that monthly

updates are not feasible, and that bimonthly update time frames could

be met. One commenter indicated that the 5-digit carrier routes tray

should be required to be full to limit the number of ``air trays.''

This requirement limits mailer preparation of carrier route

packages of letter-size mail to those ZIP Codes where carrier route

packages still provide some benefit to the Postal Service. For an

increasing number of 5-digit ZIP Code areas, the Postal Service sorts

mail for the entire 5-digit area to carrier routes and, within carrier

routes, to the sequence that carriers use when delivering the mail,

using two passes on delivery barcode sorters. Where this takes place,

the carrier does not have to manually sort this mail into delivery or

``walk'' sequence. Accordingly, for these 5-digit ZIP Code areas, it

does not make sense for the Postal Service to give mailers a discount

for preparing carrier route packages that might have to be manually

sorted to the carrier, and would always have to be manually cased by

the carrier into delivery sequence. CSBCSs sort mail to delivery

sequence, but the mail must already be sorted to the carrier route

level before it can be processed on the CSBCS. Therefore it will still

make sense for the Postal Service to offer carrier route discounts for

mail that it sorts on CSBCSs and for mail on those routes that are

sequenced manually. Over the next 2 years, the Postal Service will be

deploying both delivery barcode sorter (DBCS) and CSBCS barcode

equipment and implementing delivery point sequence (DPS) processing.

This will result in frequent changes to the ZIP Codes that are

processed by the different types of equipment. In some cases, 5-digit

ZIP Codes may change from being DPS processed on DBCSs to being DPS

processed on CSBCSs. Accordingly, during this period, frequent updating

of the areas where carrier route sortation is permissible will be

crucial to efficient postal processing of mail. However, the Postal

Service will be mindful of the constraints that frequent updates

represent for its customers, as noted in the comments. The Postal

Service can provide a list of the current 5-digit ZIP Codes where

carrier route sortation will not be permitted for planning purposes.

Due to its length, the list will not be published as part of this

notice. However, mailers may request a copy by writing to the address

at the beginning of this notice. Mailers should keep in mind that, for

the reasons explained above, this list is likely to change by the time

classification reform is implemented.

The Postal Service limited the traying requirements for the carrier

route rate to carrier route and 5-digit carrier route trays to

eliminate sortation of carrier route packages at the mail processing

plant level. In the interest of mailer qualification levels, the Postal

Service planned to allow the 5-digit trays to be less-than-full trays.

However, the Postal Service will revisit this issue in light of the

comment concerning the number of ``air trays'' that could result.

Scheme Sortation. Eight comments were received concerning scheme

sortation of Automation Subclass First-Class and Standard letters. Two

commenters requested clarification as to whether 150 pieces would be

needed for each 3-digit ZIP Code area combined in the scheme, or only

in total to all the 3-digit areas combined, in order to qualify for 3-

digit Automation (barcoded) rates. Two commenters indicated that the

proposed 5-digit and 3-digit schemes should be published for review by

mailers. Two commenters stated that 5-digit scheme sort should be done

promptly. Two commenters stated that the schemes should be available to

mailers both in hard copy and electronic form. Three commenters

believed that scheme sort should be optional; one stated that scheme

sort could not be performed for his mailings because they could contain

up to seven different thicknesses of pieces. Three commenters requested

clarification as to whether 3-digit scheme sort is optional and, if

optional, whether mailers can choose just to do scheme sort to certain

ZIP Code combinations but not all. One commenter suggested that the 3-

digit scheme sort list be the current labeling list in DMM L803.

Although the Postal Service is beginning work on a 5-digit scheme

list for Automation subclass letters, it is not available at this time;

a preliminary 3-digit scheme list for Automation subclass letters is

provided in this notice for mailers' planning purposes. Upon

implementation of classification reform, finalized listings of 5-digit

and/or 3-digit schemes for Automation subclass letters will be

available to mailers in both electronic and hard copy form. Mailers

should note that, because the 3-digit scheme list represents 3-digit

ZIP Codes ranges that are processed simultaneously on the same incoming

primary barcode sort scheme, it does not apply to upgradable mail in

the Retail subclass, which will be initially processed on OCR equipment

rather than barcode sorting equipment. For the same reason, the current

DMM L803 AADC labeling list for ZIP+4 rate mail prepared under the

automated site option (which is also processed initially through OCR

equipment) is not appropriate as a 3-digit scheme list for the

Automation (Barcoded) subclass. Regarding the volume needed per scheme

group, because the 3-digit scheme list indicates 3-digit ZIP Code

ranges that are processed at the same time, the proposed 150-piece tray

standard for the 3-digit Automation subclass rate will be based on the

total number of pieces destined for the combined ZIP Code range rather

than on the volume to any individual 3-digit ZIP Code area.

Because the 3-digit scheme list represents instances in which the

Postal Service always sorts a particular combination of 3-digit ZIP

Codes at the same time on an incoming primary barcode sorter, the

Postal Service prefers to require that Automation subclass letters be

sorted according to the 3-digit scheme matrix. Discussion of this issue

with the Letters IAG resulted in the interim position reflected in the

implementation provisions in the latter half of this notice, i.e., that

3-digit scheme sort would be optional, but that if mailers choose to

use it they would have to use it for all ZIP Codes. In view of the

comments received requesting that 5-digit and 3-digit scheme sort be

optional, the Postal Service hereby requests further comments from

mailers, particularly explaining why making scheme sort a requirement

would be burdensome.

Piece Sequencing. One commenter requested clarification as to what

the sequencing requirements for pieces within mixed-AADC trays will be.

The Postal Service has published an explanation of these requirements

in the latter part of this notice, basically stating that the pieces

must be grouped by AADC, and within the AADC groups by 3-digit ZIP Code

or 3-digit scheme. In addition, a requirement to group mail in AADC

trays by 3-digit ZIP Code or 3-digit scheme has been added for mailer

comment. The required groupings within the trays do not have to be in

any required sequence, i.e., although all the pieces for the same 3-

digit ZIP Code would have to be grouped together in an

[[Page 45301]]

AADC tray, it is not required that these 3-digit groups be placed in

the trays in ascending numerical order. These grouping requirements are

for verifying that mail was presorted to the finest extent required.

Banding Packages. One commenter asked whether the banding of

packages was being reconsidered and indicated a belief that moving away

from banding of packages is in the best interest of both the Postal

Service and mailers. For automation subclass letter mail, banding of

packages will be required only when less-than-full trays are prepared

in order to keep the pieces in the tray faced during transit. A less-

than-full tray could result when 150 or more pieces physically fill

less than three-fourths of a 1-foot tray, or when there is overflow

from a physically full tray. However, because the banded groups in the

tray will all be for the sortation level of the tray, the Postal

Service will not need to sort the packages, just break the bands prior

to processing the pieces on automated equipment.

Full Trays. Twenty-two comments were received concerning the full

tray requirement of 150 or more pieces to obtain 5-digit and 3-digit

Automation letter rates. Fourteen commenters indicated that the 150-

piece quantity was too high; six of them indicated that this

requirement will all but eliminate any postal discount for small

mailers. One large mailer indicated that it will hurt qualification

levels of off-cycle bills that form smaller mailings. Eleven commenters

believed that this requirement will result in mail that is less finely

presorted, thereby increasing the workload of the Postal Service. Two

commenters requested a return to package-based presort, one suggesting

uniform 50-piece package requirements for both 5-digit and 3-digit

mail. One commenter stated that the 150-piece rule seemed arbitrary.

Nine commenters indicated that the requirement should be 150 pieces or

a physically full tray. Three of these commenters indicated that if the

intent of the rule is to give discounts only for full trays of mail,

that a physically full tray of mail that contains fewer than 150 pieces

should still qualify for the rate. Four commenters indicated that

mailers should have a choice of using either 150 pieces or a physically

full tray similar to the current 125-piece/15-pound sacking rules for

third-class mail. One commenter requested clarification that even if

150 pieces of mail do not fill a tray the pieces still qualify for the

rate.

The Postal Service believes that the 150-piece minimum full tray

requirement to qualify for Automation 5-digit and 3-digit letter

discounts will have a beneficial impact on its operations. Currently,

there are three separate methods for presorting barcoded letter mail.

When all the tray types for each of the three basic preparation methods

are taken into account, there are currently 17 different tray

configurations for barcoded letter mail. Sometimes these trays contain

a mix of 5-digit and 3-digit packages; sometimes they contain only one

or the other type of package; and sometimes they contain unpackaged

pieces. Having a single method of preparing barcoded letter mail that

requires only four tray levels for the non-carrier route portion will

simplify postal operations as well as mailer preparation requirements.

Having that method involve only handling trays of mail as a unit will

further simplify and streamline postal operations. A study shows that

currently for trays that contain packages, the packages are often not

sorted by postal personnel because it is deemed more efficient simply

to remove the packaging material and run the pieces in the tray through

the appropriate barcode sorting operation. The Postal Service estimates

that, overall, 44% of the packages in First-Class barcoded mailings are

not used. Under current rules, if mailers do not have enough mail to

fill a 2-foot tray to a particular 3-digit ZIP Code destination, the

mail is prepared in 5-digit and/or 3-digit packages and placed in an

AADC tray. A study shows that packages in First-Class AADC trays are

not used 42.2% of the time. The Postal Service believes that any loss

of presort that might result from the proposed full tray requirements

will be offset by the permitted use of 1-foot trays and by the

elimination of package sorting operations for this mail.

The Postal Service also believes that the Automation letter

discount levels and preparation requirements will result in lower

postage bills for barcoded mailings for most mailers. A study shows

that under current Barcoded rate mailing rules, a large portion of mail

qualifying for 5-digit and 3-digit rates is already prepared in full

trays without packages. Specifically, it shows that 71.5% of First-

Class pieces sorted to 3-digit destinations are placed in 3-digit trays

that contain no packages, and 44.3% of First-Class barcoded letter mail

sorted to 5-digit destinations is currently contained in 5-digit trays

without packages. These figures are for 2-foot trays. Even more mail

should be able to be placed in full 5-digit and 3-digit trays when

preparation in 1-foot trays is allowed. Although several commenters

indicated that even with the use of 1-foot trays their 5-digit and 3-

digit qualification levels will drop, they should consider that, if

recommended by the PRC and adopted by the Governors of the Postal

Service, they will still receive a 5-cent discount for mail sorted to

AADC or mixed-AADC trays. This is only 6/10ths of a cent less than what

they currently receive for 50-piece 3-digit packages. Furthermore,

barcoded pieces in the residual portion of their current mailings that

are receiving only a 1.5-cent discount will also receive a 5-cent

discount under classification reform.

The number 150 represents the average number of pieces that fills

three-fourths of a 1-foot tray. A number was chosen rather than use a

standard requiring the actual physical filling of trays to make it

easier for mailers using MLOCRs to process pieces of varying

thicknesses to determine how many pieces were sorted to particular tray

levels when filling out mailing statements. This method also eases

qualification problems for mailers of postcards and other thin pieces.

Under the proposal, the 150-piece average is applied uniformly both for

rate qualification purposes for the 5-digit and 3-digit Automation

letter rates, and to determine when to prepare a particular sortation

level of tray for presort purposes. The Postal Service is currently

considering the comments requesting that this requirement be revised to

either 150 pieces or a physically full tray. The result of that

deliberation will be addressed in a subsequent proposed rule.

Use of 1- and 2-Foot Trays. Fifteen comments were received

concerning the required use of both 1-foot and 2-foot trays. The

commenters all indicated that using two different size containers in

the same mailing will cause stocking and production problems. Six

commenters requested that the rule be modified to allow use of all one

size tray or both at the mailer's discretion. One commenter asked

whether there will be a 1-foot extended managed mail (EMM) tray. One

commenter asked what the procedures would be if the appropriate size

trays are not available. Four commenters indicated that current presort

software does not offer the option of using two different size trays.

One commenter requested clarification that both sizes must be used in

the same mailing where appropriate. Another commenter asked whether

overflow from a 2-foot tray would be required to be placed in a 1-foot

tray to the same tray level. Another commenter requested clarification

as to which subclasses this requirement pertained.

[[Page 45302]]

The Postal Service plans to allow the rate qualification levels of

Automation letters to be based on a 1-foot tray in order to make it

easier for mailers to qualify for rates and to lessen any loss of

presort. However, the Postal Service does not want to double its number

of tray handlings by allowing a mailing to be prepared entirely in 1-

foot trays. Furthermore, the Postal Service does not want to increase

transportation costs by shipping an increased number of nearly empty 2-

foot trays. Accordingly, the requirement to use both 1-foot and 2-foot

trays where appropriate is considered necessary by the Postal Service.

For example, when there is enough mail to fill a 2-foot tray, a 2-foot

must be used. Overflow from that 2-foot tray that is not sufficient to

fill another 2-foot tray must be placed in a 1-foot tray. The Postal

Service expects that software developers will be able to take this into

account when developing software for the new rules prior to

implementation. It is planned that this requirement will pertain to all

letter mail prepared in trays in all subclasses under classification

reform. Currently, it is not projected that a 1-foot EMM tray will be

available when classification reform is implemented. Accordingly, mail

prepared in EMM trays will be prepared exclusively in 2-foot trays.

Procedures will be developed at a time closer to implementation to deal

with instances in which appropriate tray sizes are not available will

be developed at a time closer to implementation. However, it is

anticipated that there will be adequate supplies of both 1-foot and 2-

foot trays at that time.

Tray Sortation Levels. Several comments were received concerning

the tray level requirements. Two commenters suggested that the 3-digit

tray level be made optional to allow mailers to make up just basic rate

trays. Two commenters indicated that traying to AADCs is difficult. One

commenter indicated that there should be a limit on the amount of

mixed-AADC mail submitted in a mailing. A basic premise of the

classification reform proposal is to encourage mailer use of technology

and bulk bypass of postal operations. Accordingly, the Postal Service

believes that requiring 3-digit tray preparation is necessary.

Preparation of AADC trays requires sorting to a list that contains

groups of 3-digit ZIP Codes served by the same AADC. (AADC sortation is

an element of existing preparation standards.) Although this may be

difficult for some mailers, this level of tray is necessary to

facilitate consolidation of mail to points closer to destination and to

limit the number of pieces in mixed-AADC trays that must be sorted at

origin. The Postal Service does not believe that any other limits on

the number of pieces sorted to the mixed-AADC level is necessary.

Tray Sleeving an Strapping. One commenter asked whether sleeving

and strapping will be required for all mailings, and another indicated

that he believed this should be required for all nonlocal mail. Another

commenter indicated a belief that First-Class mailers should also be

required to place air contract transportation (ACT) tags on trays of

mail. However, two commenters indicated that they are opposed to such a

requirement. Sleeving, strapping, and ACT-tagging trays have been

discussed during Letter IAG meetings, but proposed requirements were

inadvertently omitted from the June 29 notice. The Postal Service is

adding proposed requirements for sleeving of all trayed letter mail,

for both sleeving and strapping all Automation subclass letters, and

for ACt-tagging of First-Class Automation subclass letters. Comments on

these sleeving, banding, and ACT-tagging proposals are encouraged.

Barcoded Tray and Sack Labels. Ten comments were received

concerning the planned requirement to use barcoded tray and sack labels

within the Automation subclass. Two commenters agreed with this

requirement, three encouraged phasing it in, and two disagreed with it,

indicating that it would require additional equipment purchases. One

commenter indicated he did not believe the current Postal Service

system could keep up with customer demand for barcoded labels. One

commenter requested clarification as to whether this requirement

applied to all classes of mail and wondered whether it applied to

pallets as well as to trays and sacks. The requirement applies only to

First-Class and Standard Automation subclass mail and Periodicals

Publications Service mail. It applies only to trays of letters, and

sacks of flats, not to pallets. The physical requirements for the

barcoded tray and sack labels will be those contained in current DMM

M032. The Postal Service plans to make this requirement effective at

the time when classification reform is implemented, and to specify

inclusion of the correct content identifier number (CIN) in the

barcode. Additional comment is welcome on the basic requirement for a

barcoded label, and, separately, on the inclusion of CIN information.

Reply Envelopes. Nine comments were received concerning the

proposed requirement that courtesy and business reply mailpieces

included within pieces in a First-Class or Standard Automation subclass

mailing be physically automation compatible, bear a facing

identification mark (FIM), and bear the correct barcode for the

preprinted address. Two commenters stated that they agreed with this

proposed requirement; four commenters disagreed. One commenter

indicated that the requirement was confusing, particularly in regard to

what is a correct barcode. Two commenters indicated that this

requirement must be phased in to allow time for mailers to deplete

existing stocks of reply mailpieces. Two commenters requested that the

requirement be clarified to make it clear that the barcodes could be

printed on inserts that appear through windows. The requirement will be

clarified in this proposed rule to indicate that barcodes that appear

through inserts will qualify. The Postal Service also plans to phase-in

this requirement.

Retail and Regular Subclasses

Upgradable Mail. Nine comments were received concerning various

requirements for Retail and Regular subclass letter mail preparation,

including the preparation option for upgradable mail. All but one of

the comments seemed to revolve around a lack of understanding about

upgradable mail and the difference between normal and optional

preparation for upgradable mail. One commenter disliked the requirement

for an AADC tray level in upgradable mail.

A 30-cent rate is proposed for presorted mail in the First-Class

Retail subclass. This rate is the same whether mail is prepared

according to the normal preparation that involves packaging and traying

or whether the mail is prepared under the upgradable preparation

option. A 21.9 cent rate for mail trayed to 5-digit and 3-digit trays

and a 26.1-cent rate for mail trayed to other destinations is proposed

for mail in the Standard Regular subclass. Again, the rates are the

same for both normal and upgradable preparation.

Upgradable mail is mail that meets both the current physical

preparation requirements in DMM C810 for automation compatibility and

the current requirements in DMM C830 for an OCR clear zone, a barcode

clear zone, for reflectance requirements, and for paper that will

accept water-based ink. The detailed type font requirements in DMM

C830.2 will not be required; however, the pieces must have a machine-

printed address in a nonscrip font. A ZIP+4 code is not required on an

upgradable mailpiece. In Summary, upgradable mail is mail that can be

processed on MLOCRs and that is likely

[[Page 45303]]

to be upgraded during this processing to mail that bears a delivery

point barcode. In return for preparing a piece that can be processed on

MLOCR equipment, mailers will be allowed to use a simpler method of

mail preparation--the upgradable preparation option. The upgradable

preparation option does not require presort to the 5-digit level and

does not require packaging. Because this mail will flow through an

automated mailstream, it is trayed to AADCs, not to ADCs.

Use of Trays. Three comments were received concerning the use of

trays for Standard mail. One commenter was in favor of it, and two

commenters were against it, particularly for non-upgradable mail. In

the near future, the Postal Service will be using only trays for letter

mail in its internal operations. Accordingly, mailer preparation of

letter mail in trays will be needed at the time when classification

reform is implemented for smooth operations within postal facilities.

Comments Regarding Flat Mail

General

Of the 89 commenters, 25 commented on issues pertaining to flats.

Comments covered such areas as copalletization of pieces in different

rate levels, the rates available for ``fletters,'' traying

requirements, package sizes, and 3-digit and 5-digit ZIP Code schemes.

These topics are discussed in more detail below.

Copalletization and Commingling

Nine commenters expressed their support for copalletization of

separately prepared packages of delivery point barcoded, 5-digit

barcoded, nonbarcoded, and carrier route presort pieces. One commenter

expressed a desire to have options on how to segregate packages of

flats on pallets, reacting to earlier proposals in that regard.

Questions have arisen in IAG sessions as to the combination of packages

in sacks as well as on pallets. The Postal Service is agreeable to both

pallets and sacks containing separate packages of the types described,

and that physical separation of packages by rate level would not be

required. These mixed pallets and sacks would be acceptable if prepared

to other than 5-digit destinations because their processing needs make

combination counter-productive. The proposed criteria presented later

in this notice reflect these positions.

One commenter wanted to include trays as well as packages on

pallets. This comment is not within the scope of this rulemaking.

However, as information, the Postal Service is conducting a separate

rulemaking related to palletization, and commenters and other

interested parties are asked to review that notice as appropriate (see

60 FR 39080-39088).

``Fletters''

``Fletters'' were discussed in many comments. (``Fletters'' are

mailpieces that are within the size range for both automated letter

processing and automated flats processing. The mailer must choose at

the time of mail preparation the processing category for which the

pieces will be prepared; rate eligibility is determined accordingly.

The Postal Service has generally held that the mailer's letter-or-flat

choice must be uniform for all mailings of the same piece from the same

job or list.)

The Postal Service has previously determined that ``fletters''

could be prepared on pallets if the mailer had chosen to qualify for

the Barcoded rates for flats because palletization is appropriate for

flats but not for letter-size mail. (The above discussion of comments

on mixing packagings of different rate levels on pallets applies to

``fletter'' mailings as well.)

One commenter proposed that for mailpieces in the ``fletter''

range, the mailer be given the option to produce the mailing job as

flats or to produce the different subclasses as flats or letters to

obtain the lowest overall postage rates. One commenter suggested that

the Postal Service extend coverage of the palletization option to all

``fletters,'' whether prepared to qualify for a flats rate or not.

Another commenter wants the option to palletize both automation and

nonautomation ``fletters.'' Several commenters want the Postal Service

to allow ``fletters'' to be claimed as flats in all three subclasses

(Regular, Automation, and Enhanced Carrier Route). Preparation of

``fletters'' for flats-based rates (i.e., the Barcoded rates for flats

or the Enhanced Carrier Route subclass rates) would entitle them to

palletization, but that such an option would not be available for

``fletters'' prepared to qualify for letter-based rates. Preparation of

letters, flats, and ``fletters'' remains linked to the most efficient

methods of production and processing that will yield the lowest

combined cost of mailing. Currently, the Postal Service does not find

significant benefit or an opportunity for general benefit for mailers

in allowing letter mail (or ``fletters'' prepared at letter-based

rates) to be packaged and palletized. Preparation of letter mail in

trays on pallets is being considered as part of the palletization

rulemaking mentioned earlier. The proposed criteria below reflect these

positions.

Definition of Flats

One commenter stated that the Postal Service should provide a

definition of flats will allow letter-shaped catalogs that can be

processed on new flat sorting equipment (e.g., the FSM 1000) to be

eligible for the flats Automation rates, thus offering an option that

would avoid the tabbing requirement for the letter Automation rates. A

second commenter projects that catalog in the popular 6\1/8\ inch by

10\1/2\ inch size will be entered at the Automation nonletter (flat)

rate in order to avoid letter requirements and urges the Postal Service

to restudy the rules and their impact on these catalogs. The physical

mailpiece standards for Automation rates are based on the capabilities

of Postal Service automated processing equipment now in use. The

possible amendment of those standards, as new equipment is developed or

deployed, is not an issue germane to this rulemaking. The proposed

criteria presented below remain predicated on current equipment

abilities and limitations.

Preparation Questions

It was believed by one commenter that further clarification is

needed in several areas, such as the need to better define the size or

thickness of packages, citing as an example uncertainty on the handling

of 19 flat-size pieces, each /3\/4\ inch thick, for the same ZIP Code.

A second question concerned the handling of remaining pieces if all

required packages of 10 or more pieces have been prepared to 5-digit,

3-digit, and ADC destinations. Should a mixed-ADC package be prepared,

a 5-digit package, or, if the latter, should this 5-digit package be

placed in mixed-ADC container? A third question had to do with Enhanced

Carrier Route presort and whether it is required to be packaged in

full, direct trays. The Postal Service is not attempting to address

every ``what-if'' scenario at this point in the rulemaking and believes

that many hypothetical situations will be clarified as this process

continues. Regardless, it is the Postal Service's intention to develop

simple implementation standards that, by design, will not seek to

evaluate all conceivable applications. Accordingly, commenters are

asked to help craft basic standards that can be easily applied rather

than detailed rules tailored for a succession of specialized

situations.

Two commenters pointed out a discrepancy between the text and

exhibit for the proposed standards for the Standard Regular subclass

Basic rate

[[Page 45304]]

category for flats. The text indicated that at least 10 pieces were

required to prepare a mixed-ADC package; the exhibit showed no minimum.

There is no minimum for mixed-ADC packages. This has been corrected in

the material below.

One commenter questioned the rationale for the requirement that

First-Class flats must be prepared in flat trays while Standard Mail

flats must be prepared in sacks, asking whether this approach is being

adopted to differentiate between the mail classes. Another commenter

said that Standard Mail should have the option of using trays or sacks.

Packaging of fletters on pallets and within sacks should be allowed;

traying should not be required. Another commenter favored the option of

traying flats as well as letters, specifically referring to Enhanced

Carrier Route letters and flats. The Postal Service has attempted to

standardize equipment use in this rulemaking as much as practicable,

given current and expected equipment availability. Whether Standard

Mail flats will eventually be allowed use of flat trays cannot be

determined at this time. This rulemaking will continue to specify sacks

for Standard Mail flats not prepared on pallets. Pieces prepared for

Enhanced Carrier Route subclass rates are presumed to be flats, and

those rates reflect the costs for handling such pieces. Mailers who

prepare letter-size pieces or fletters for the Enhanced Carrier Route

subclass rates will not be entitled to tray such mail, notwithstanding

the availability of trays for such pieces if prepared at letter-based

rates. The proposed standards shown below reflect these positions.

One commenter believed that the sorting requirement for flats to 5-

digit destinations is very restrictive, saying that it will be

difficult to meet the required densities to qualify for the rate and

that this should be optional for the presort or automation rates.

Without addressing the merits of the comment, the rates offered for

flats do not include separate 5- and 3-digit rates as would be

necessary to permit an optional 5-digit sortation. Because this

circumstance is part of the rate design of the Postal Service's filing

now being considered by the PRC, it is beyond the scope of this

rulemaking.

Several commenters expressed the opinion that the Postal Service

should consider extending the option of presorting to 3-digit and 5-

digit ZIP Code schemes to flats as well as letters. The Postal Service

is currently developing a 3-digit ``scheme sort'' matrix for letter

mail. A 5-digit matrix is being developed as well and will be announced

at a later date. Scheme sorts are possible for barcoded letter mail

because of how such mail is processed: on sorters each having more than

of 100 separations (bins). When two or more 3-digit ZIP Code ranges

have a total number of possible 5-digit ZIP Code separations that is

less than the maximum number of available bins on the sorter, a

combined or scheme sort preparation is possible. Flat sorting equipment

is different and does not have the number of bins necessary to allow 3-

digit scheme sorts for flats. The Postal Service would be amenable to

reconsidering the restriction of scheme sorts to letter mail as the

evolution of its flat sorting equipment makes that reasonable.

One comment was received concerning the 100% ZIP+4 or delivery

point barcode requirement for flats. This commenter wanted

clarification that a 5-digit barcode would count toward the 100%

barcoding requirement in those areas where only a 5-digit barcode could

be obtained. For purposes of this rulemaking, the Postal Service will

propose that only a ZIP+4 or delivery point barcode will be acceptable

toward fulfilling the barcode requirement.

Comments Regarding Addressing

Carrier Route Updates

Twelve mailers responded to the proposal that carrier route

information be updated within 90 days of the mailing date. Mailers

expressed both support and opposition to the proposal. Three commenters

believed that the 90-day limit should not be relaxed, whereas seven

others questioned the need to update more frequently and cited

mailpiece production difficulties that would preclude them from meeting

a 90-day coding window. Three mailers suggested that the product cycle

for the Carrier Route Information System (CRIS) (and all other AIS

products) move from a fulfillment of four times a year to six times a

year; the Postal Service is exploring this option. Five others

suggested that coding should occur within 120 days of the date of

mailing.

Representatives in the Addressing IAG acknowledged that the current

cycle allows route data to be up to 8-\1/2\ months old at the date of

mailing and that this can require the Postal Service to rework

significant portions of a carrier route presorted mailing. More route

adjustment activity is expected to occur from route inspection and the

required route adjustments associated with the implementation of

delivery point sequencing. Three mailers asked whether the National

ZIP+4 file could be used to apply carrier route codes instead of the

CRIS product. The National ZIP+4 or Line-of-Travel (LOT) products may

be used to update carrier route codes.

Carrier Route Update Proposal

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

Beginning use Last mailing

File release date date Last coding date date

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

February 15...... April 1.......... May 31.......... August 31.

April 15......... June 1........... July 31......... October 31.

June 15.......... August 1......... September 30.... December 31.

August 15........ October 1........ November 30..... February 28.

October 15....... December 1....... January 31...... April 30.

December 15...... February 1....... March 31........ June 30.

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

Mailings must be coded using CASS-certified software within 90 days

of the mailing date. For example, if addresses are coded with carrier

route information on May 15, the mailing must be entered by August 15.

Line of Travel Requirement

The primary reaction of mailers to the line-of-travel requirement

for Enhanced Carrier Route subclass basic carrier route rate mail

concerned the product releases. The LOT product will be released in the

same schedule as the current AIS products, e.g., ZIP+4 and CRIS. Two

mailers also favored the use of LOT as a sequencing option for the High

Density rate category in the Enhanced Carrier Route subclass. Others

commenters questioned whether true walk-sequence would meet the

sequencing requirement; the Postal

[[Page 45305]]

Service never meant to imply that it did not.

Four commenters asked about the need for certification of software

and about documentation that might be required. The software vendor

community has several options on where the LOT information can be

placed, wrapping it into presort software or into ZIP+4 products. Final

documentation requirements will be finalized once commercial product

issues have been resolved.

Move Updates

Thirty-five comments were received on the move-update proposal.

Overall the commenters felt the proposal would be difficult to

implement or too costly. Questions were raised over the legally of

changing address information without input from the customer

(addressee). The Postal Service has suggested that mailers could use

the update notice from the Postal Service as a mechanism to trigger a

contact with the customer for updated information; such as request

could accompany a regular mailing to the customer.

The move-update requirement can be met now through several

established methods. These include the ``Address Correction Requested''

(ACR) endorsement, where the mailpiece is returned to the mailer with

the new address included; participation in Address Change Service

(ACS), which provides an electronic notice containing the new address;

and processing the addresses from a list using the National Change of

Address (NCOA) service of a Postal Service-authorized vendor. Another

solution for some federal agencies may be the Federal Address

Correction Service, currently being tested, providing acceptable

response levels are achieved.

Because the addresses are what must be verified, mailers who choose

to employ one of these methods may do so on a mailing in another class

of mail (e.g., using ACS on a Periodicals class or Standard class

mailing). The updated process would then qualify the addresses for use

on pieces mailed at First-Class rates.

The ACR endorsement can be added to envelopes in a number of ways:

it can be preprinted on the envelopes, added to existing envelope stock

through the application of labels or use of a rubber stamp, or printed

on the envelope using other printers such as those found in MLOCRs and

encoding stations. Some mailers raised questions about the need for

this requirement in ``non-list'' mailings because the addresses would

be more current. The Postal Service believes that there is benefit in

these cases as well and notes that the use of the ACR endorsement in

these cases would cost a mailer very little because the number of

returns should be minimal. The ACR fee is charged only on pieces that

bear addresses that must be corrected.

Five mailers commented that they have established internal address

correction centers because of the nature of their business. They

inquired whether the Postal Service could ``certify'' their internal

operations every 6 months instead of their adding an endorsement to

their mailpieces. Fourteen others felt that the move-update requirement

would be too costly to meet and might offset any postage savings from

qualifying for a lower rate. Another suggested that the Postal Service

cease forwarding mail and return anything that did not have the correct

address because mailers obtaining lists from outside sources should

ensure that the list has already been processed to meet this standard.

5-Digit Verification

There were few comments on this proposed requirement. One commenter

asked whether the preparer or presenter of the mail would be held

responsible for verifying 5-digit ZIP Codes. The Postal Service would

ask the preparer of the mail to verify the accuracy of 5-digit barcodes

unless a presenter, such as a presort service bureau, chose to verify

the ZIP Codes for a client by adding the correct 5-digit barcode to the

mailpiece.

Two others commented that the Postal Service should not allow

noncomputerized methods of verification because inexpensive technology

is readily available in the commercial marketplace. It was also

suggested that mailers obtaining lists from outside sources should

ensure that these lists have already been processed to meet this

standard.

Uniform Address Placement

This proposed quality standard relates specifically to the bottom

two lines of the address block. It specifies that the elements in those

lines appear in a regular order. Four mailers described antiquated

internal systems and the need for expensive programming changes that

would make compliance with this standard difficult to achieve. The

Postal Service believes that there are ways to hold address information

and print routines that might prove less costly than some believe. For

example, mailers can use software print routines to identify particular

elements or fields and the order in which they should be printed. In

addition, mailers can maintain addresses in separate files from their

base customer records and extract that information at the time of

printing.

Six commenters were concerned about the recipient's reaction to

receiving mail with an address unlike that which was supplied. The

Postal Service believes that consumers are not the sole source of

problem addresses. List compilation and data entry systems are also

sources of addressing deficiencies. Mailers obtaining lists from

outside sources should ensure that these lists have already been

processed to meet the uniform address placement standard.

Several mailers commented that this requirement should not apply to

Standard Regular subclass mail. The Postal Service is still evaluating

this issue and will reflect its decision in a future rulemaking.

Update Barcodes Every 6 Months

Only one mailer presented arguments against this requirement. Two

others suggested that the matching requirements be made more stringent

and coincide with the 90-day requirement that is proposed for carrier

route updates.

For mailers with large lists, the use of Z4Change could provide a

solution. By using the Z4Change process, mailers can limit the number

of addresses that need to be reprocessed. Once a mailer has matched all

addresses in a list using currently certified software, and meets other

operational criteria to participate in the program, only new addresses

and those addresses where changes have occurred need to be rematched to

the National ZIP+4 product. More specific details on the program are

available by calling the National Customer Support Center at 1-800-238-

3150.

Comments Regarding Periodicals

General

A total of 23 comments were received concerning the proposed

implementation procedures for Periodicals. Of that number, 12

commenters expressed disapproval of the classification reform proposal

before the Postal Rate Commission as it relates to Periodicals; those

comments are beyond the scope of this rulemaking and will not be

addressed. One commenter favored the entire proposal as written. The

comments of 10 additional parties concerned specific parts of the

proposals in the first notice.

Presort Standards

For commenters were in favor of the proposal to align the sortation

rules for Regular Periodicals with those proposed

[[Page 45306]]

for Publications Service. Conversely, one publisher commented that the

sortation scheme proposed for Publications Service is very complicated

and should not be used for Regular Periodicals. The Postal Service has

determined that it will propose aligned sortation of Regular

Periodicals and Publications Service mail when it publishes DMM

standards for comment later this year.

In regard to the preparation rules proposed for /3\/5\ rate

category mail, one commenter stated that the Postal Service should put

mail processing equipment in place as soon as possible to handle flats

not currently automatable (e.g., tabloids, newspapers, and heavyweight

magazines). With the exception of the requirements governing polybags,

the Postal Service is not anticipating that the regulations for

machinables will change in the near future. Although 100 new FSM 1000

machines have been purchased by the Postal Service, this is not a

sufficient quantity to cause machinability requirements to be altered.

Automation equipment is being evaluated on a site-by-site basis.

Although the Postal Service would like to be able to process all types

of flats on automated equipment, new machines will not be purchased

until the current ones have been properly positioned for optimum

utilization.

Commenting generally, one commenter considered the requirements for

Regular Periodicals to be more stringent in certain instances that

those proposed for Publications Service. Another commenter believed

that the auditing requirements for the industry, and substantiating

compliance with the 85% barcoding and 90% presort density requirements,

will be burdensome and add increased administrative costs.

Circulation Criterion for Publications Service

Regarding the proposed 75% circulation criterion, one commenter

believed that it would be appropriate to demand that publishers

provides certification of a publication's compliance with the 75% paid/

requested circulation on a per-issue basis. It was suggested that this

could be accomplished by the submission of a report of the number paid/

requested on file at the time of each issue's file maintenance update

or label run as part of required Centralized Postage Payment (CPP)

System documentation, and by adding a certification block for the

publisher's signature on each mailing statement. The Postal Service

will evaluate the documentation, including a publisher's certification

on mailing statements; verification could be performed on the same

frequency as circulation is verified today.

Another commenter requested that the Postal Service stipulate that

all mailed newsstand copies (regardless of the number returned or

destroyed) be considered paid circulation for the purpose of meeting

the 75% paid requirement. The Postal Service will consider this

proposal and address it in a future rulemaking.

30% Nonadvertising Criterion

In regard to the proposed 30% nonadvertising content requirement,

particularly if it were not met by only a minor portion of copies of an

issue, one commenter expressed the opinion that the proposed 40%

penalty should be assessed only on those copies that do not meet the

30% requirement instead of on the entire issue. The Postal Service has

concluded that such an application of the penalty would significantly

reduced its effectiveness in ensuring compliance; the proposed rule

will retain the original provision that it would apply to the entire

issue.

One commenter expressed concern that his publication could

erroneously be assessed the 40% postage penalty because of a

miscalculation in the advertising/editorial percentage by an outside

auditor. The Postal Service is proposing that this audit be used only

to validate compliance with the proposed 75% paid/requested circulation

requirement. To ensure compliance with the proposed 30% nonadvertising

content requirement, the Postal Service is considering including on the

mailing statement a certification block for signature by the publisher,

certifying that the minimum has been met. The outside auditor will not

be responsible for confirming the advertising/editorial ratio. In the

event that the Postal Service determines that an issue is in excess of

70% advertising, the publisher will be given ample opportunity to

demonstrate compliance with the requirement before any penalty is

assessed. The same commenter suggested that the Postal Service allow

copies with advertising in excess of 70%, such as a regional edition,

to be mailed at the higher third-class or fourth-class bound printed

matter rates as an alternative to the entire issue being assessed a 40%

penalty. The current mail classification schedule restricts

publications from being mailed at third- or fourth-class rates except

under limited conditions. As a result, the Postal Service is not able

to consider such an alternative in this rulemaking.

90% Density Criterion

Regarding the 90% density criterion, one commenter specifically

welcomed and endorsed the definition presented in the proposal.

Although supporting the proposed 90% criterion in general, another

commenter suggested that the wording be changed to allow different

treatment ``when the main file of an issue meets the 90% presortation

requirement but supplemental mailings result in the issue falling below

the 90% requirement, but not below 85%.'' This proposal relates to

classification proposals under consideration in the case pending before

the PRC and, as such, is beyond the scope of this rulemaking.

Three commenters favored the proposal's treatment of copies in firm

packages. Four commenters expressed the view that interpretation of an

``issue window'' for administering the 90% criterion would be difficult

and costly for both the Postal Service and the publisher. A second

commenter supported this view, believing that the window requires

publishers to main two different sets of data. This commenter suggested

that the same set of data should be used to determine eligibility for

all three primary criteria for Publications Service. Another commenter

suggested that the Postal Service consider only a publication's ``main

run'' for the purposes of the 90% criterion. Finally, an association

commented that the proposed definition is too restrictive and suggested

that the exact dates of the mailing window should be negotiated between

a publisher and the Postal Service at the time of the publication's

application for Publications Service. The Postal Service intends to ask

publishers who apply for Publications Service to describe the window

that makes sense for each respective publication. The Postal Service

will be flexible in working with publishers in a reasonable manner to

ensure that all publications have windows that are appropriately

relevant to their frequencies of issuance (e.g., monthlies would each

have 12 approximately equal windows).

Responding to a Postal Service proposal, one commenter specifically

endorsed the provision that Publications Service preparation rules

would apply if Publications Service and Regular preparation rules are

not aligned and Regular and Publications Service publications were

comailed.

Concerning the application of penalties to a comailed publication,

one commenter observed that, because publications unable to meet the

90% density requirement on their own may

[[Page 45307]]

be comailed with other periodicals, publishers, together with their

printers and/or fulfillment houses, will need to evaluate each

publication individually, based on frequency, address list, etc., to

determine whether comailing is a viable option. Two commenters

mentioned that comailing can be difficult to achieve because publishers

do not know from issue to issue which titles can be prepared in this

manner because of magazine makeup. A concern was also raised that

comailing might cause delays in serving subscription orders and thus

violate Federal Trade Commission requirements.

100% Barcoding of Machinable Pieces

Regarding the issue of barcoding machinable mailpieces, one

commenter observed that, because a machinable Publications Service

publication must have a barcode unless it is a flat that is sorted to

carrier route, and because carrier route mail is highly efficient, it

would be counter-productive for mailers to choose to prepare this mail

as barcoded mail just to achieve the 85% barcoding level. In response,

the Postal Service will amend its proposal to allow the flat-size

carrier route portion of Publications Service mail to qualify toward

the 85% criterion, whether nonbarcoded or delivery point or ZIP+4

barcoded.

One commenter fully endorsed the 85% requirement but requested that

the wording be adjusted to say ``85% of the copies must be [ZIP+4] or

delivery point barcoded'' to ensure that the individual pieces in firm

packages will be counted toward the 90% presortation requirement.

Another commenter proposed that the Postal Service allow copies in firm

bundles of flats to count toward the 85% barcoding requirement. The

objective of the 85% criterion is to optimize the proportion of pieces

that can be given automated processing. To the extent firm packages are

amenable to such handling, it would not be relevant to the objectives

of the 85% criterion if the component copies inside the firm package

were barcoded. Therefore, the 85% criterion will be applied to consider

the number of addressed pieces in the mailing, not the total number of

copies.

One other commenter suggested that the 85% minimum be based on the

entire mailed volume of an issue as opposed to only the carrier route

portion of the mail. Still another commenter asked whether the

barcoding requirement applies to nonautomation rate mailings. The

Postal Service would like to clarify that the requirement pertains only

to machinable mail, i.e., mail that meets all the standards in DMM C810

and C820. Nonmachinable and carrier route flat mail does not have to

bear a barcode.

Another commenter mentioned that it will be difficult to determine

qualification with the 85% requirement because the mailing of an entire

issue of many publications will be split between vendors (e.g.,

printers, fulfillment houses, publishers). Providing and consolidating

documentation to support accumulation of barcode counts for these

multiple mailings could prove to be a hardship. Clarification was

requested on how this requirement will be measured, i.e., will the

Postal Service review a single mailing or determine qualification based

on the entire mailed volume of an issue or per edition? Compliance with

the 85% criterion will be based on the entire mailed volume of the

issue, encompassing all editions from all sources. Publishers will be

responsible for having the supporting information available if

requested by the Postal Service.

Other Issues

Regarding the proposal that ``deposit times [for Publication

Service mailings] must be scheduled,'' one commenter asked whether

actual appointments will be required. The Postal Service has not

determined that a formal appointment process is necessary at this time.

Concerning the required use of Presort Accuracy Verification and

Evaluation (PAVE) software, one commenter suggested that presort

software be required to produce a qualification report for multiple

jobs (included in the mailing of an issue) as part of PAVE-certified

output. The Postal Service will not consider this suggestion because it

goes beyond the scope of this rulemaking.

On the proposal that computer-based postage payment systems must be

used as they are developed, a commenter inquired whether this

electronic payment system will use Graphic Communication Association's

Publisher's Electronic Payment System (PEPS) file format. That

determination cannot be made at this time.

Regarding the Publications Service pound-rate category, one

commenter mentioned that zoning the full weight of a publication will

prompt mailers to open more sectional center facility (SCF) entry

points, thus creating a logistics problem by building ADC or AADC

pallets/sacks destined to an SCF level. To overcome this, it was

suggested that ``residual'' pallets be allowed at SCF entries. Pallet

preparation is being discussed in a separate rulemaking and will be

resolved accordingly.

Concerning the requirement that Publications Service carrier route

mail be prepared in line-of-travel sequence, one commenter suggested

that examples are needed showing what ``line-of-travel'' means so that

mailers can better understand this proposal. The Postal Service's

proposal regarding Publications Service carrier route rate mail

preparation is similar to that for Standard Mail Enhanced Carrier Route

subclass basic carrier route rate mail. Pieces are arranged by the

mailer in the approximate order that they are delivered by the carrier.

This format is essentially identical to walk-sequence in most cases,

differing for instance in how apartments and separately ZIP+4 coded

buildings are treated.

A commenter also asked about mixed classes and attachments or

enclosures. Currently, second-class publications that include

attachments or enclosures not eligible for mailing at second-class

rates must be paid as a combination rate piece, i.e., second-class

rates on the periodical and the applicable First- or third-class rates

for the attachment(s) or enclosure(s). If a host piece qualifies for an

automation rate, a First- or third-class enclosure or attachment is

eligible for the comparable First- or third-class rate; the attachment

or enclosure need not meet the volume standards that would apply if

mailed separately. An automation rate may not be claimed for an

enclosure or attachment, unless a similar automation rate is claimed

for the host piece. One commenter inquired about how this rule would

apply to enclosures and attachments paid at First-Class or Standard

Mail rates in periodicals mailed at Publications Service rates. The

Postal Service proposes no changes for rate eligibility in this regard.

Publications Service rates are considered to be automation rates;

therefore, even if a nonmachinable piece is enclosed in a Publications

Service periodical (and claimed at either First-Class or Standard Mail

rates), the enclosure or attachment will be charged the automation rate

equivalent to the host piece.

Commenters also asked about commingling packages on pallets and in

sacks. Currently, packages of carrier route, nonbarcoded, and barcoded

mail may be mixed on the same pallet. Packages must contain all the

same type of pieces, i.e., all barcoded or carrier route mail. One

commenter asked whether mailers will be required to physically separate

such packages under classification reform implementation, whether

regular rate and Publications Service periodicals could be copalletized

and, if so, would separations be required. The Postal

[[Page 45308]]

Service has generally decided to allow commingling on pallets and in

sacks to other than 5-digit destinations; see the discussion under

Flats. Two commenters asked whether 5-digit barcoded pieces and ZIP+4

barcoded pieces will be allowed to be sorted within the same package.

The Postal Service would prefer to have 5-digit barcoded and ZIP+4

barcoded mail separately packaged because the 5-digit barcoded mail

requires more handling. However, the Postal Service is currently

studying this issue to determine how much mail is involved. If it is

determined that only a small amount of mail is at issue, the Postal

Service will consider allowing mailers to package 5-digit barcoded and

ZIP+4 barcoded mail in the same package.

Regarding subclass identification, one commenter suggested that, if

a feasible method could be found, the Postal Service should require

Publications Service mailpieces to carry such information. This

commenter further suggested that this type of identification may lead

the Postal Service to consider permitting Publications Service mailers

to elect to mail supplemental mailings at Regular Periodicals rates

rather than risk a penalty on the entire Publications Service issue.

The Postal Service appreciates the suggestion regarding subclass

identification but has not found such an endorsement to be useful or

necessary at this time. The question of allowing periodicals to mail at

both Publications Service and Regular rates is beyond the scope of this

filing.

Two Postal Service and industry committees have been formed: one to

detail circulation audit procedures for Publications Service by outside

auditors and the other to develop specific application procedures for

obtaining authorization to mail at Publications Service rates. The

results of these groups' work will be considered in future rulemaking

notices.

Comments Regarding Other Topics

Destination Entry

Seven commenters spoke to issues concerning destination entry and

destination entry discounts. (Although it has been proposed that the

value of these discounts be reduced as part of MC95-1, no change in

their eligibility standards has been proposed.)

One commenter noted that differences exist in presort requirements

for different rate categories and urged that these do not carry over

into inconsistency in destination entry rules.

Another commenter noted that language in the June 29 notice implied

that destination entry would be required for the basic carrier route

rate. This language has been reworded below to make it clear that

destination entry is not required for any rate.

Citing a belief that trailers can hold more bedloaded mail than

palletized mail, one commenter questioned the cost-effectiveness of

destination entry if bedloaded sacks are not allowed. The commenter

stated that the destination entry discount would not cover the cost of

dropshipping palletized loads in some cases. Therefore, to discourage

origin entry of this mail (at greater cost to the Postal Service), the

commenter urged that different destination entry rates be allowed for

palletized and bedloaded shipments. Another commenter questioned

whether lowering the value of destination entry discounts made sense,

given the record in Docket R90-1. A third commenter believed that the

100% barcoding criterion, 150-piece tray minimums, and required uses of

1- and 2-foot trays being proposed for some rate categories will drain

mail away from destination entry by making it less cost-effective for

customers. The proposed rule does not seek to disallow bedloaded

shipments; palletization (including palletization of trays) is being

discussed in a separate rulemaking. The design of discounts (including

their relative values) is being reviewed by the PRC as part of MC95-1

and is beyond the scope of this rulemaking.

Another commenter offered support for redefining the quantity of

pieces that represents a mailing for purposes of destination entry,

especially when deposits are made at low-volume destinations. The

Postal Service is reviewing this matter administratively (not as part

of this rulemaking) and will announce its decision accordingly.

Designated Points of Entry

Four comments were received concerning the proposed requirement in

First-Class and Standard Mail that mail ``must be deposited at places

and times designated by the Postal Service.'' That language reflects

existing standards based on existing authority (e.g., DMM D300.2.0 and

D400.2.0, based on DMCS 300.050 and 400.051, respectively). By

repeating similar provisions in the June 29 notice, the Postal Service

is not signaling an intent to propose significantly different standards

for mail deposit in implementing MC95-1.

PAVE

Twenty-two comments were received concerning the requirement for

Presort Accuracy Verification and Evaluation (PAVE) or standardized

documentation. Three commenters expressed support for this proposed

requirement; one thought that it should be implemented only after a 6-

month deferral; two thought that it should be imposed only on

Automation subclass mail; six thought that it should be eliminated; and

10 others stated a need to know what was meant by ``standardized

documentation'' before they could submit adequate comments.

One commenter indicated that the Postal Service should provide only

broad guidelines concerning documentation format. Another commenter

thought that tray labels should be required to be numbered and

supported by an accompanying manifest. A third commenter requested

clarification as to whether the proposed requirement would apply to

small hand-sorted mailings that currently are weight-verified and do

not require documentation. The Postal Service currently is not

proposing significant new informational content in mailing

documentation nor is it proposing documentation requirements for

mailings that can be weight-verified (e.g., mailings of identical-

weight pieces each bearing the full correct postage).

Of those who objected to the proposed requirement, four felt

mandating use of PAVE-certified software would be an obstacle for small

mailers. Another argued that the PAVE proposal should be dropped

because it did not eliminate the need to verify mailings. A third

commenter believed that PAVE would duplicate what CASS and move-updates

would provide. The Postal Service's proposal is predicated on the

belief that using consistent forms of mailing documentation will ease

burdens on mailers and facilitate (without seeking to eliminate) postal

verification and acceptance processes. As mail preparation becomes more

automated and mailings become more complex, the need for documentation

is expected to remain and the need to make its production simple will

increase. At this point in the rulemaking, the Postal Service's

proposal for PAVE remains focused on its ability to generate

standardized documentation, while affording customers the choice of

generating that documentation otherwise if possible.

Machinable Parcels

Seven comments were received concerning Standard Regular machinable

parcel preparation requirements. Five commenters indicated that

machinable parcels should have the option of being palletized in

addition to being sacked. Five commenters requested that rates for

machinable parcels be extended to

[[Page 45309]]

preparation in `'gaylords'' or other containers. Generally, machinable

parcel preparation is not being affected by this rulemaking;

palletization (and the use of equivalent containers) is being discussed

in a separate rulemaking. The current provisions for palletizing third-

class machinable parcels will be applied to Standard Regular machinable

parcels at the time when classification reform is implemented.

Exceptions to substitute one container type for another are

administrative matters not germane to this rulemaking.

Stanley F. Mires,

Chief Counsel, Legislative.

I. First-Class Mail

A. General

Any matter eligible for mailing (6000) may, at the

mailer's option, be mailed as First-Class Mail (210).

First-Class Mail may not exceed 70 pounds or 108 inches in

length and girth combined (231).

Certain matter must be sent as First-Class Mail (210).

Postage for First-Class Mail must be paid in accordance

with 240 (240).

First-Class Mail must be deposited at places and times

designated by the Postal Service (251).

B. Retail Subclass (221)

1. General

Each piece must weigh 11 ounces or less (221.1).

2. Single-Piece Rate Category

All mailable matter may be mailed at the single-piece

rates (210, 221.2).

3. Presort Rate Category

Must be prepared in a mailing of at least 500 pieces

(221.3a).

Must be presorted, marked, and presented as prescribed by

the Postal Service (221.3b).

--Letters not prepared under the ungraded option, and all flats and

parcels, must be packaged if there are 10 or more pieces to a 5-digit

area, to a 3-digit area, or to an ADC; all remaining mail must be in

mixed-ADC packages. Packages must be placed in 5-digit, 3-digit, ADC,

and mixed-ADC trays (letters and flats) or sacks (parcels). All

possible finer presort packages must be prepared before packages to the

next level are prepared.

--Optional preparation for upgradable letters is full trays (minimum

150 pieces) to 5-digit (optional), 3-digit, AADC, and mixed-AADC (no

minimum) destinations. All possible finer presort packages must be

prepared where required before packages to the next level are prepared.

Pieces in AADC trays must be grouped by 3-digit ZIP Code; overflow

trays are not permitted. Pieces within mixed-AADC trays must be grouped

by AADC and, within each, by 3-digit ZIP Code.

--Letter mail must be prepared in letter trays. Both 1- and 2-foot

trays must be used within a single mailing, as appropriate, to generate

the fewest trays and to ensure optimum tray utilization. Trays must be

sleeved by the mailer.

--Flats must be prepared in flat trays. A full tray is defined as one

that contains at least a single stack of pieces lying flat that reaches

the bottom of the hand-holds, but no more than can be contained in the

tray with the cover secured in place. Trays of flats must be secured

with two straps.

--Parcels must be prepared in sacks.

--Presort Accuracy Verification and Evaluation (PAVE) software must be

used or standardized documentation must be provided. Unresolved issues

include whether PAVE will be mandatory for those categories where it is

available, whether standardized documentation may be used instead, and

what time period will be allowed for compliance when PAVE does become

available.

--Mailing must be entered at an acceptance point designated by the

Postal Service.

--Presort rates applies to all pieces in the mailing.

Must meet the machinability, addressing, and other

preparation requirements prescribed by the Postal Service (221.3c).

--Upgraded letters must be letter-size and meet both the current

physical preparation requirements in DMM C810 for automation

compatibility and the current requirements in DMM C830 for an OCR clear

zone and a barcode clear zone, for reflectance, and for paper that will

accept water-based ink. The detailed type font requirements in DMM

C830.2 are not required; however, the pieces must have a machine-

printed address in a nonscript font. A ZIP+4 code is not required to be

considered an upgradable mailpiece.

--Customer moves must be updated at least every 6 months (permissible

methods are expected to include National Change of Address (NCOA)

verification, Address Correction Service, and Address Change Service).

The vendor community has developed several other ideas that could be

used to meet this requirement. The Postal Service anticipates that

formal proposals will be offered soon for evaluation.

--A certified process must be used at least once a year to ensure the

accuracy of 5-digit ZIP Codes.

--A recommended checklist of possible ZIP Code verification options for

address lists that are not computerized could be signed as a part of

the verification process. Items to appear on the checklist might

include manual verification using the most recent ZIP Code directory, a

survey of the addressees currently in the address list to inquire about

changes to ZIP Code information, participation in the current manual

list correction service, turning the list over to someone else to

verify, and use of approved software.

--Uniform address element placement must be used. Uniform address

element placement does not refer to guidelines in USPS Publication 28,

Postal Addressing Standards. Rather, uniform address element placement

means that the city name, state name, and ZIP Code or ZIP+4 are each

elements of an address and must appear as the bottom line in the

address block, in that order. The delivery address line must appear on

the line immediately above the city, state, and ZIP Code line. For

city-style addresses, the order of elements should be street number,

predirectional (e.g., N, S, SW), street name, suffix (e.g., ST, AVE,

RD), postdirectional (e.g., W, S, NE), and any necessary secondary unit

designator (e.g., APT, STE, RM, UNIT) and number. For rural route or

highway contract routes with box numbers in the address, the delivery

address must contain the route number and box number in that order.

With post office box addresses, the box number must follow the

designation ``PO BOX'' or ``POST OFFICE BOX.'' When any delivery

address line information exceeds the space allowed, secondary

information must be placed on the line above. This overflow information

may not be placed on the line below the delivery address line. Uniform

address element placement also means that the delivery address line

elements should appear in the correct order. These conditions also

apply to use of uniform address element placement.

--``Prestigious'' city names and may be used if associated with the

correct ZIP Code.

--A state name may be fully spelled out or abbreviated according to the

[[Page 45310]]

abbreviations in the USPS City State File.

--A city name must be spelled correctly enough not to create a

duplicate within the state.

--Missing elements (e.g., directional or suffix) are not required if

their omission does not create an ambiguous match.

--Street names must be spelled correctly enough not to create an

ambiguous match.

--Abbreviations of words in street names may be used. (For recommended

abbreviations, see USPS Publication 28, Postal Addressing Standards.)

4. Retail Discounts and Surcharges

a. Postal Card and Postcard Discount

Matter must be a postal card or postcard (221.4) (232).

Postal card or postcard must be of uniform thickness and

must not exceed any of these dimensions: 6 inches long; 4.250 inches

wide; 0.016 inch thick (232.1).

b. Nonstandard-Size Surcharge (221.5)

If the mailpiece weighs 1 ounce or less and its aspect

ratio (length of the mailpiece divided by its height) is less than 1.3

or more than 2.5; or if the mailpiece exceeds any of these dimensions:

11.500 inches long; 6.125 inches wide; or 0.250 inch thick (233).

c. Additional Presort Discount

Applies to each piece weighing more than 2 ounces (221.6).

C. Automation Subclass (222)

1. General

Must be prepared in a mailing of at least 500 pieces

(222.01).

Each piece must weigh 11 ounces or less (222.1).

Must be presorted, marked, and presented as specified by

the Postal Service (222.1).

--All mailings must be presorted and presented in trays as described

under the appropriate rate categories.

--Sleeving, strapping, and ACT-tagging are required for all letter

trays and flat trays.

--Presort Accuracy Verification and Evaluation (PAVE) software must be

used or standardized documentation provided.

--Mailings must be entered at an acceptance point designated by the

Postal Service.

--For flats, a full tray is defined as one that contains at least a

single stack of pieces lying flat that reaches the bottom of the hand-

holds, but no more than can be contained in the tray with the cover

secured in place. Trays of flats must be secured with two straps.

Must bear a barcode representing no more than 11 digits

(not including correction digits) as prescribed by the Postal Service

(222.1).

--For letters, the mailing must be 100% delivery point barcoded.

Production of 100% delivery point barcode (DPBC) mailstream requires

resolving such issues as preprinted envelopes with less than a DPBC and

the coding of destinations assigned a unique 5-digit ZIP Code or ZIP+4.

A pure DPBC mailstream is needed to eliminate costly backflow of

uncoded or non-DPBC pieces.

--For flats, the mailing must be 100% ZIP+4 or delivery point barcoded.

For flats, the delivery point barcode will be optional; the ZIP+4

barcode, required. 100% barcoding for flats requires that each piece in

a mailing (or segment or other subunit of a job) bear a ZIP+4 or DPBC.

Must meet the machinability, addressing, barcoding, and

other preparation requirements prescribed by the Postal Service

(222.1).

--The current machinability requirements in DMM C810 must be met for

letters, and those in DMM C820 must be met for flats. The Postal

Service may consider amending its standards for physical automation

compatibility for flats when appropriate, based on changes in sortation

equipment.

--Coding Accuracy Support System (CASS)-certified software must be used

within 6 months of the mailing date or Multiline Accuracy Support

System (MASS)-certified equipment must be used to apply the barcode.

This simply changes the current requirement for use of such software

from within 1 year of mailing to within 6 months of mailing.

--Certified software used must match addresses to current CRIS file

within 90 days of mailing date for letter-size carrier route rate mail.

The ``within 90 days of mailing'' standard may require some mailers to

update the carrier route codes in their address lists more frequently

than every 90 days. This condition is influenced by the mailers'

production schedule and when, during that cycle, they would normally

update carrier route codes.

--Customer moves must be updated at least every 6 months (permissible

methods are expected to include National Change of Address (NCOA)

verification, Address Correction Service, and Address Change Service).

The vendor community has developed several other ideas that could meet

this requirement. The Postal Service anticipates that formal proposals

will be offered soon for evaluation.

--Barcoded tray or sack labels (as specified in DMM M032) must be used.

The Postal Service plans to make this requirement effective at the time

when classification reform is implemented.

--Barcoding must meet the current requirements in DMM C840.

--Courtesy or business reply envelope or card included in an Automation

subclass mailing must be automation-compatible and bear a facing

identification mark and a correct barcode for the return address. The

barcode may appear on an insert that appears through a window. This

will be phased in, in the future.

2. Basic Rate Category (Letters) (222.2)

Must be letter-size mail (222.2).

--Must be presorted first to all possible full and overflow AADC trays,

then to mixed-AADC in trays. For purposes of presort verification,

pieces in AADC trays must be grouped by 3-digit ZIP Code or 3-digit

scheme; pieces in mixed-AADC trays must be grouped by AADC and, within

each, by 3-digit ZIP Code or 3-digit scheme.

3. Three-Digit Rate Category (Letters) (222.3)

Must be letter-size mail (222.3).

Must be presorted to single or multiple 3-digit ZIP Code

destinations as prescribed by the Postal Service (222.3).

--The Postal Service will allow 3-digit scheme sortation (i.e.,

combined preparation of two or more 3-digit ZIP Code areas processed

together in Postal Service schemes). A preliminary 3-digit scheme list

appears at the end of this document. This list is subject to further

revision but is provided as a guide to assist mailers in assessing the

impact of this manner of preparation on their mailings. The Postal

Service proposes to make sortation to the 3-digit scheme list mandatory

to parallel internal postal processing schemes. Such sortation could

also result in greater discount qualification for mailers because the

150-piece minimum for the 3-digit Automation rate would apply to the

combination of 3-digit ZIP Codes shown on the scheme list rather than

to each 3-digit ZIP Code.

--Preparation of full trays (minimum 150 pieces) is required to 3-digit

ZIP Code or, where applicable, 3-digit

[[Page 45311]]

scheme destinations. Overflow trays are permitted when a full tray for

the same destination is already prepared.

4. Five-Digit Rate Category (Letters) (222.4)

Must be letter-size mail (222.4).

Must be presorted to single or multiple 5-digit ZIP Code

destinations as prescribed by the Postal Service (222.4).

--Minimum of 150 pieces is required per 5-digit destination.

--Overflow trays are permitted when a full tray for the same

destination is already prepared.

--A 5-digit scheme sort might be developed at a later date.

--A 5-digit make-up is optional.

5. Carrier Route Rate Category (Letters) (222.5)

Must be letter-size mail (222.5).

Must be presorted to carrier routes prescribed by the

Postal Service (222.5).

--Preparation of carrier route rate mail is optional.

--At least 10 pieces are required per route within 5-digit ZIP Code

areas that are manually sorted to walk sequence by letter carrier or

are processed on CSBCS equipment to delivery point sequence.

--A system is being developed to allow mailers access to the list of

ZIP Codes for which carrier route presort will be allowed; monthly

updates are proposed.

--The Postal Service will examine the number of routes that have fewer

than 10 possible deliveries and determine whether to allow carrier

route rates when pieces are prepared for all stops on such routes.

--Preparation in carrier route and 5-digit carrier routes trays is

required.

--Carrier route mail must be prepared in line-of-travel sequence. This

is not exact walk-sequence arrangement of the mailpieces. For line-of-

travel sequence, the mailpieces are first sorted into the sequence in

which the ZIP+4 codes are delivered by the carrier. They are further

sorted into ascending or descending numerical sequence within the

number range associated with the ZIP+4 code.

6. Basic Flats Rate Category (222.6)

Must be flat-size mail (222.6).

--Mail must be presorted to ADC and mixed-ADC destinations.

--At least 10 pieces per ADC destination must be prepared in packages;

all remaining pieces must be placed in mixed-ADC packages.

--Flats trays must be used. For flats, a full tray is defined as one

that contains at least a single stack of pieces lying flat that reaches

the bottom of the hand-holds, but no more than can be contained in the

tray with the cover secured in place. Trays of flats must be secured

with two straps.

7. /3\/5\-Digit Flats Rate Category (222.7)

Must be flat-size mail (222.7).

Must be presorted to single or multiple 3- and 5-digit ZIP

Code destinations as specified by the Postal Service (222.7).

--At least 10 pieces per destination must be prepared in packages,

first to all possible 5-digit destinations, then to all possible 3-

digit destinations. A 3-digit ``scheme sort'' will not be offered for

flats at this time.

--Flats trays must be used. For flats, a full tray is defined as one

that contains at least a single stack of pieces lying flat that reaches

the bottom of the hand-holds, but no more than can be contained in the

tray with the cover secured in place. Trays of flats must be secured

with two straps.

8. Automation Discounts

a. Postal Card and Postcard Discount

Must be a postal card or postcard (222.8).

Must be of uniform thickness and must not exceed any of

these dimensions: 6 inches long; 4.250 inches wide; 0.016 inch thick

(232).

b. Additional Presort Discount

Applies to each piece weighing more than 2 ounces (222.9).

I-1.--First-Class Mail Automation Subclass--Letters and Cards

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

Rate \1\

Sort level Optional/ Rate qualification minimum Tray level letter Rate card

required (cents) (cents)

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

Carrier Route \2\...................... Optional........ 10 pieces per route........... Carrier Route (full, no overflow)...... 23.2 13.7

Carrier Route \2\...................... Optional........ 10 pieces per route........... 5-Digit Carrier Routes (no minimum).... 23.2 13.7

5-Digit................................ Optional........ 150 pieces.................... 5-Digit (full, overflow allowed)....... 23.5 14.0

3-Digit/Scheme......................... Required........ 150 pieces.................... 3-Digit/Scheme (full, overflow allowed) 25.0 15.5

AADC................................... Required........ N/A........................... AADC (full, overflow allowed, grouped 27.0 17.5

by 3-digit/scheme).

Mixed AADC............................. Required........ N/A........................... Mixed AADC (no minimum, grouped by AADC 27.0 17.5

and, within each, by 3-digit/scheme).

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

\1\ First-ounce rate. Each additional ounce is 23 cents. An additional presort discount of 4.6 cents applies to each piece weighing more than 2 ounces.

\2\ Carrier route sortation and rates limited to nonautomated and CSBCS-sorted ZIP Codes.

I-2.--First-Class Mail Automation Subclass--Flats

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

Package/rate

Sort level Optional/required qualification Tray level Rate \2\

minimum \1\ (cents)

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

5-Digit..................... Required............ 10 pieces........... 5-Digit (full, no overflow) 27.0

3-Digit..................... Required............ 10 pieces........... 3-Digit (full, no overflow) 27.0

ADC......................... Required............ 10 pieces........... ADC (full, no overflow).... 29.0

Mixed ADC................... Required............ No minimum.......... Mixed ADC (no minimum)..... 29.0

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

\1\ Rate based on package without regard to the tray in which it is placed.

[[Page 45312]]

\2\ First-ounce rate. An additional 5-cent surcharge for nonstandard-size mail applies to each piece weighing 1

ounce or less that falls outside the standard letter dimensions. Each additional ounce is 23 cents. An

additional presort discount of 4.6 cents applies to each piece weighing more than 2 ounces.

I-3.--First-Class Mail Retail Subclass--Presort Letters and Cards

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

Rate \1\

Sort level Optional/required Package minimum Tray level letter Rate card

(cents) (cents)

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

5-Digit............... Required............ 10 pieces........... 5-Digit (full, no 30.0 19.0

overflow).

3-Digit............... Required............ 10 pieces........... 3-Digit (full, no 30.0 19.0

overflow).

ADC................... Required............ 10 pieces........... ADC (full, no 30.0 19.0

overflow).

Mixed ADC............. Required............ No minimum.......... Mixed ADC (no minimum) 30.0 19.0

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

\1\ First-ounce rate. Each additional ounce is 23 cents. An additional presort discount of 4.6 cents applies to

each piece weighing more than 2 ounces.

Optional Preparation for Upgradable Letters and Cards

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

Rate \1\

Sort level Optional/required Package minimum Tray level letter Rate card

(cents) (cents)

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

5-Digit............... Optional............ N/A................. 5-Digit (full, no 30.0 19.0

overflow).

3-Digit............... Required............ N/A................. 3-Digit (full, no 30.0 19.0

overflow).

AADC.................. Required............ N/A................. AADC (full, grouped by 30.0 19.0

3-digit ZIP Code; no

overflow).

Mixed AADC............ Required............ N/A................. Mixed AADC (no 30.0 19.0

minimum, grouped by

AADC and, within

each, by 3-digit ZIP

Code).

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

\1\ First-ounce rate. Each additional ounce is 23 cents. An additional presort discount of 4.6 cents applies to

each piece weighing more than 2 ounces.

Single-Piece Rates: No presort or minimum.

I-4.--First-Class Mail Retail Subclass--Presort Flats and Parcels Under 11 Ounces

Presort Rate

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

Tray level (sack level for Rate \1\

Sort level Optional/required Package minimum parcels) (cents)

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

5-Digit..................... Required............ 10 pieces........... 5-Digit (full, no overflow) 30.0

3-Digit..................... Required............ 10 pieces........... 3-Digit (full, no overflow) 30.0

ADC......................... Required............ 10 pieces........... ADC (full, overflow 30.0

allowed).

Mixed ADC................... Required............ No minimum.......... Mixed ADC (no minimum, 30.0

grouped by 3-digit ZIP

Code).

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

\1\ First-ounce rate. An additional 5-cent surcharge for nonstandard-size mail applies to each piece weighing 1

ounce or less that falls outside the standard letter dimensions. Each additional ounce is 23 cents. An

additional presort discount of 4.6 cents applies to each piece weighing more than 2 ounces.

Single-Piece Rates: No presort or minimum.

II. Standard Mail

A. General

Any matter eligible for mailing (6000) may, at the

mailer's option, be mailed as Standard Mail except certain matter

required to be sent First-Class Mail or Periodicals class (311).

May include printed matter not having the character of

actual or personal correspondence (312).

May have certain written additions (313).

May not exceed 70 pounds (332).

Postage must be paid in accordance with 340 (340).

Must be deposited at places and times designated by the

Postal Service (351).

B. Regular Subclass

1. General

Each piece must weigh less than 16 ounces (321.31).

Must be prepared in a mailing of at least 200 addressed

pieces or 50 pounds of addressed pieces (321.31a).

Must be presorted, marked, and presented as prescribed by

the Postal Service (321.31b).

--Letters not prepared under the upgradable option, and all flats and

irregular parcels, must be packaged if there are 10 or more pieces to a

5-digit area, to a 3-digit area, or to an ADC, in that order, all

remaining mail must be in mixed-ADC packages. Packages must be placed

in 5-digit, 3-digit, ADC, and mixed-ADC trays (letters) or sacks (flats

and irregular parcels). All possible finer presort packages must be

prepared before packages to the next level are prepared. Current

exceptions to packaging of irregular parcels in DMM M306.2a and M306.2b

apply.

--Optional preparation for upgradable letters is full trays (minimum

150 pieces) to 5-digit (optional), 3-digit, AADC, and mixed-AADC (no

minimum) destinations. All possible finer presort packages must be

prepared where required before packages to the next level are prepared.

Pieces in AADC trays must be grouped by 3-digit ZIP Code; overflow

trays are not permitted. Pieces within mixed-AADC trays must be grouped

by AADC and, within each, by 3-digit ZIP Code.

[[Page 45313]]

--Letter mail must be prepared in letter trays. Both 1- and 2-foot

trays must be used within a single mailing, as appropriate, to generate

the fewest trays and to ensure optimum tray utilization. Trays must be

sleeved by the mailer.

--Flats and parcels must be prepared in sacks (unless palletized).

--Machinable parcels must be sacked to 5-digit destinations (optional

if \3/5\ rates are not claimed) and destination BMCs when there are 10

or more pounds of mail for a sack destination, with remaining parcels

sacked to the origin BMC. This does not represent a change in the

current preparation standards for machinable third-class parcels.

--Palletization of flats and machinable parcels is permitted and

preferred.

--Commingled packages of carrier route, 5-digit barcoded, and ZIP+4/

delivery point barcoded flats will be permitted to all sack/pallet

destinations except to 5-digit destinations. Physical separation of

packages at different presort or rate levels is not required within a

pallet or sack. The Postal Service will develop optional endorsements

to provide the necessary identification of rate categories. Commingled

packages may be reported together on mailing statements and supporting

documentation.

--``Fletters'' (larger letter-size pieces that are barcoded and claimed

at the Barcoded rates for flats or at the Enhanced Carrier Route rates)

may be prepared in packages on pallets. To qualify for palletization,

the ``fletter'' must be prepared to qualify for a flats-based rate

(e.g., Barcoded rates for flats or Enhanced Carrier Route rates). The

same mailpiece must be prepared uniformly as a letter or flat for the

same job.

--Presort Accuracy Vertification and Evaluation (PAVE) software must be

used or standardized documentation must be provided. Unresolved issues

include whether PAVE will be mandatory for those categories where it is

available, whether standardized documentation may be used instead, and

what time period will be allowed for compliance when PAVE does become

available.

--Mailings must be entered at an acceptance point designated by the

Postal Service.

Must meet machinability, addressing, and other preparation

requirements prescribed by the Postal Service (321.31c).

--Upgradable letters must be letter-size and meet both the current

physical preparation requirements in DMM C810 for automation

compatibility and the current requirements in DMM C830 for an OCR clear

zone and a barcode clear zone, for reflectance, and for paper that will

accept water-based ink. The detailed type front requirements in DMM

C830.2 are not required; however, the pieces must have a machine-

printed address in a nonscript font. A ZIP+4 code is not required to be

considered an ungradable mailpiece.

--A certified process must be used to ensure the accuracy of 5-digit

ZIP Codes at least once a year.

--A recommended checklist of possible ZIP Code verification options for

address lists that are not computerized could be a signed as a part of

the verification process. Items to appear on the checklist might

include manual verification using the most recent ZIP Code directory, a

survey of the addressees currently in the address list to inquire about

changes to ZIP Code information, participation in the current manual

list correction service, and turning the list over to someone else to

verify use of approved software.

--Uniform address element placement must be used. Uniform address

element placement does not refer to guidelines in USPS Publication,

Postal Addressing Standards. Rather, uniform address element placement

means that the city name, state name, and ZIP Code or ZIP+4 are each

elements of an address and must appear as the bottom line in the

address block, in that order. The delivery address line must appear on

the line immediately above the city, state, and ZIP Code line. For

city-style addresses, the order of elements should be street number,

predirectional (e.g., N, S, SW), street name, suffix (e.g., ST, AVE,

RD), postdirectional (e.g., W, S, NE), and any necessary secondary unit

designator (e.g, APT, STE, RM, UNIT) and number. For rural route or

highway contract routes with box numbers in the address, the delivery

address must contain the route number and box number in that order.

With post office box addresses, the box number must follow the

designation ``PO BOX'' or ``POST OFFICE BOX.'' When any delivery

address line information exceeds the space allowed, secondary

information must be placed on the line above. This overflow information

may not be placed on the line below the delivery address line. Uniform

address element placement also means that the delivery address line

elements should appear in the correct order. These conditions also

apply to use of uniform address element placement:

--``Prestigious'' city names may be used if associated with the correct

ZIP Code.

--A state name may be fully spelled out or abbreviated according to the

abbreviations in the USPS City State File.

--A city name must be spelled correctly enough not to create a

duplicate within the state.

--Missing elements (e.g., directional or suffix) are not required if

their omission does not create an ambiguous match.

--Street names must be spelled correctly enough not to create an

ambiguous match.

--Abbreviations of words in street names may be used. (For recommended

abbreviations, see USPS Publication 28, Postal Addressing Standards.)

2. Basic Rate Category (321.22)

Must be presorted to ADC or mixed-ADC trays (letters) or

sacks (flats and irregular parcels), except that, under the optional

sortation for upgradable letters, letters must be presorted to AADC and

mixed-AADC trays. No change in the current preparation or eligibility

standards for machinable parcels.

3. \3/5\-Digit Rate Category (321.23)

Must be presorted to single or multiple 3- and 5-digit ZIP

Code destinations, as prescribed by the Postal Service (321.23).

--Must be presorted to 5-digit and 3-digit trays (letters) or sacks

(flats and irregular parcels) and to 5-digit and destination BMC sacks

(machinable parcels). No change in the current preparation or

eligibility standards for machinable parcels.

--For palletized mail, flats must be in a 5-digit or 3-digit package

correctly sorted to the appropriate pallet destination. No change in

the current preparation or eligibility standards for machinable

parcels.

4. Destination Entry Discounts (321.24)

Applies to mail prepared as prescribed by the Postal

Service and entered at the destinating BMC or SCF (321.24).

C. Automation Subclass (321.3)

1. General

Each piece must weigh less than 16 ounces (321.3).

Must be prepared in a mailing of at least 200 addressed

pieces or 50 pounds of addressed pieces (321.3a).

[[Page 45314]]

Must be presorted, marked, and presented as prescribed by

the Postal Service (321.3b).

--Presort must conform to that specified under rate categories.

--Sleeving and strapping is required for all letter trays.

--Presort Accuracy Verification and Evaluation (PAVE) software must be

used or standardized documentation must be provided.

--Mailings must be entered at an acceptance point designated by the

Postal Service.

--Separately prepared packages of ZIP+4/delivery point barcoded, 5-

digit/nonbarcoded, and carrier route presort flats may be sacked or

palletized together and reported together on mailing statements and

supporting documentation. Commingling will be permitted to all sack/

pallet destinations except to 5-digit destinations. Physical separation

of packages at different presort or rate levels is not required within

a pallet or sack. The Postal Service will develop optional endorsements

to provide the necessary identification of rate categories. The pieces

in all commingled packages will count toward a single container minimum

(e.g., 125 pieces or 15 pounds per sack).

Must bear a barcode representing no more than 11 digits

(not including correction digits) as prescribed by the Postal Service

(321.3c).

--For letters, mail must be 100% delivery point barcoded.

--For flats, mail must be 100% ZIP+4 or delivery point barcoded. The

delivery point barcode will be optional, but the ZIP+4 barcode will be

required. This standard requires that each piece in a mailing (or

segment or other subunit of a job) bear a ZIP+4 or delivery point

barcode.

Must be letter-size or flat-size as defined by the Postal

Service and must meet the machinability, addressing, barcoding, and

other preparation requirements prescribed by the Postal Service

(321.3d) and 321.3e).

--The current machinability requirements in DMM C810 must be met for

letters, and those in DMM C820 must be met for flats. The Postal

Service may consider amending its standards for physical automation

compatibility for flats when appropriate, based on changes in sortation

equipment.

--Barcoded tray or sack labels (as specified in DMM M032) must be used.

The Postal Service plans to make this requirement effective at the time

classification reform is implemented.

--Barcoding must meet the current requirements in DMM C840.

--Courtesy or business reply envelope or card included in an Automation

subclass mailing must be automation-compatible and bear a facing

identification mark and a correct barcode for the return address. The

barcode may appear on an insert that appears through a window. This

will be phased in, in the future.

--Coding Accuracy Support System (CASS)-Certified software must be used

within 6 months of the mailing date or Multiline Accuracy Support

System (MASS)-certified equipment must be used to apply the barcode.

(This simply changes the current requirement for use of such software

from within 1 year of mailing to within 6 months of mailing.)

--Certified software used must match addresses to current CRIS file

within 90 days of the mailing date for letter-size carrier route rate

mail. Updating carrier route information within 90 days of the mailing

date may require some mailers to update carrier route codes monthly

because of the length of their mail production cycles.

2. Basic Rate Category (Letters)

Must be letter-size mail (321.32).

--Must be presorted first to all possible full and overflow AADC trays,

then to mixed-AADC in trays. For purposes of presort verification,

pieces in AADC trays must be grouped by 3-digit ZIP Code or 3-digit

scheme; pieces in mixed-AADC trays must be grouped by AADC and, within

each, by 3-digit ZIP Code or 3-digit scheme.

3. Three-Digit Rate Category (Letters)

Must be letter-size mail (321.33).

Must be presorted to single or multiple 3-digit ZIP Code

destinations as prescribed by the Postal Service (321.33).

--The Postal Service will allow 3-digit scheme sortation (i.e.,

combined preparation of two or more 3-digit ZIP Code areas processed

together in Postal Service schemes). A preliminary 3-digit scheme list

appears at the end of this document. This list is subject to further

revision but is provided as a guide to assist mailers in assessing the

impact of this manner of preparation on their mailings. The Postal

Service proposes to make sortation to the 3-digit scheme list mandatory

to parallel internal postal processing schemes. Such sortation could

also result in greater discount qualification for mailers because the

150-piece minimum for the 3-digit Automation rate would apply to the

combination of 3-digit ZIP Codes shown on the scheme list rather than

to each 3-digit ZIP Code.

--Preparation of full trays (minimum 150 pieces) is required to 3-digit

ZIP Code or, where applicable, 3-digit scheme destinations. Overflow

trays are allowed when a full tray for the same destination is already

prepared.

4. Five-Digit Rate Category (Letters)

Must be letter-size mail (321.34).

Must be presorted to single or multiple 5-digit ZIP Code

destinations as prescribed by the Postal Service (321.34).

--A minimum of 150 pieces is required per 5-digit destination.

--Overflow trays will be allowed when a full tray for the same

destination is already prepared.

--A 5-digit scheme sort may be developed at a later date.

--A 5-digit make-up is optional.

5. Carrier Route Rate Category (Letters)

Must be letter-size mail (321.35).

Must be presorted to carrier routes prescribed by the

Postal Service (321.35).

--Preparation of carrier route rate mail is optional.

--Must have at least 10 pieces per route within 5-digit ZIP Code areas

that are manually sorted to walk sequence or are processed on CSBCS

equipment to delivery point sequence.

--A system is being developed to allow mailers access to the list of

ZIP Codes for which carrier route presort is allowed; monthly updates

are proposed.

--The Postal Service will examine the number of routes that have fewer

than 10 possible deliveries and determine whether to allow carrier

route rates when pieces are prepared for all stops on such routes.

--Mail must be prepared in carrier route and 5-digit carrier route

trays.

--Carrier route mail must be prepared in line-of-travel sequence. This

is not exact walk-sequence arrangement of the mailpieces. For line-of-

travel sequence, the mailpieces are first sorted into the sequence in

which the ZIP+4 codes are delivered by the carrier. They are further

sorted into ascending or descending numerical sequence within the

number range associated with the ZIP+4 code.

6. Basic Flats Rate Category

Must be flat-size mail (321.36).

--Mail must be presorted to ADC and mixed-ADC destinations. At least 10

[[Page 45315]]

pieces per package for each ADC destination must be prepared; all

remaining pieces must be placed in mixed-ADC packages.

7. 3/5-Digit Flats Rate Category

Must be flat-size mail (321.37).

Must be presorted to single or multiple 3- and 5-digit ZIP

Code destinations as specified by the Postal Service (321.37).

--At least 10 pieces per destination must be prepared in packages.

8. Destination Entry Discounts

Applies to mail prepared as prescribed by the Postal

Service and addressed for delivery within the service area of the

destination BMC (or ASF), SCF, or DDU. The DDU discount applies only to

Carrier Route rate category mail (321.28).

D. Enhanced Carrier Route Subclass

1. General

Each piece must weigh less than 16 ounces (321.3).

Must be prepared in a mailing of at least 200 addressed

pieces or 50 pounds of addressed pieces (321.3a).

Must be prepared, marked, and presented as prescribed by

the Postal Service (321.3b).

--Mailing must be entered at an acceptance point designated by the

Postal Service.

Must be presorted to carrier routes as prescribed by the

Postal Service (321.3c).

--Mail must be packaged if there are 10 or more pieces to a carrier

route.

--Enhanced Carrier Route rates are allowed for routes having fewer than

10 possible deliveries only as described under the saturation rate

category.

--Packages of flat-size pieces must be placed in carrier route sacks

when 125-piece or 15-pound minimum per carrier route is met; remaining

packages must be placed in 5-digit carrier routes sacks. Palletization

of flats is preferred.

--Separately prepared packages of ZIP+4/delivery point barcoded, 5-

digit/nonbarcoded, and carrier route presort flats may be sacked or

palletized together and reported together on mailing statements and

supporting documentation. Commingling will be permitted to all sack/

pallet destinations except to 5-digit destinations. Physical separation

of packages at different presort or rate levels is not required within

a pallet or sack. The Postal Service will develop optional endorsements

to provide the necessary identification of rate categories. The pieces

in all commingled packages will count toward a single container minimum

(e.g., 125 pieces of 15 pounds per sack).

--The Postal Service will carry forward the current provisions

applicable to 125-piece walk-sequence rates and allow the high-density

rates when pieces are prepared for all possible deliveries on those

routes that have fewer than 125 stops.

--Presort Accuracy Verification and Evaluation (PAVE) software must be

used or standardized documentation must be provided.

Must be sequenced as prescribed by the Postal Service

(321.3d).

Must meet the machinability, addressing, and other

preparation requirements prescribed by the Postal Service (321.3e).

--Certified software used must match addresses to current CRIS file

within 90 days of the mailing date for carrier route rate mail.

Updating carrier route information within 90 days of the mailing date

may require some mailers to update carrier route codes monthly due to

the lengths of their mail production cycles.

--Uniform address element placement must be used. Uniform address

element placement does not refer to guidelines in USPS Publication 28,

Postal Addressing Standards. Rather, uniform address element placement

means that the city name, state name, and ZIP Code or ZIP+4 are each

elements of an address and must appear as the bottom line in the

address block, in that order. The delivery address line must appear on

the line immediately above the city, state, and ZIP Code line. For

city-style addresses, the order of elements should be street number,

predirectional (e.g., N, S, SW), street name, suffix (e.g., ST, AVE,

RD), postdirectional (e.g., W, S, NE), and any necessary secondary unit

designator (e.g., APT, STE, RM, UNIT) and number. For rural route or

highway contract routes with box numbers in the address, the delivery

address must contain the route number and box number in that order.

With post office box addresses, the box number must follow the

designation ``PO BOX'' or ``POST OFFICE BOX.'' When any delivery

address line information exceeds the space allowed, secondary

information must be placed on the line above. This overflow information

may not be placed on the line below the delivery address line. Uniform

address element placement also means that the delivery address line

elements should appear in the correct order. These conditions also

apply to use of uniform address element placement:

--``Prestigious'' city names may be used if associated with the correct

ZIP Code.

--A state name may be fully spelled out or abbreviated according to the

abbreviations in the USPS City State File.

--A city name must be spelled correctly enough not to create a

duplicate within the state.

--Missing elements (e.g., directional or suffix) are not required if

their omission does not create an ambiguous match.

--Street names must be spelled correctly enough not to create an

ambiguous match.

--Abbreviations of words in street names may be used. (For recommended

abbreviations, see USPS Publication 28, Postal Addressing Standards.)

2. Basic Rate Category

--Mailings must be in line-of-travel sequence.

--This is not exact walk-sequence arrangement of the mailpieces. For

line-of-travel sequence, the mailpieces are first sorted into the

sequence in which the ZIP+4s are delivered by the carrier. The

mailpieces are further sorted into ascending or descending numerical

sequence within the number range associated with the ZIP+4.

3. High-Density Rate Category

Applies to mail presented in walk-sequence order and

meeting high-density requirements prescribed by the Postal Service

(321.43).

--Mail must be at least 125 pieces per carrier route sorted to carrier

walk-sequence.

--The current methods for walk-sequencing address lists in DMM M304.5

may be used.

--It has been suggested that the Postal Service use line-of-travel

sequence as an alternative to exact walk-sequence.

4. Saturation Rate Category

Applies to mail presented in walk-sequence order and

meeting the saturation requirements prescribed by the Postal Service

(321.44).

--There must be addressed pieces for at least 90% of the total active

residential deliveries per route, or for at least 75% of the total

active deliveries per route. 100% saturation is required for simplified

address mailings, as required by current standards. The Postal Service

[[Page 45316]]

proposes allowing saturation rates when the quantity of pieces per

route reaches the applicable 75/90/100% threshold, regardless of the

actual number of stops.

--The current methods for walk-sequencing address lists in DMM M304.5

must be used.

--Further instructions will be developed for the preparation of letter-

size pieces in this rate category (for example, use of sacks or trays).

5. Destination Entry Discounts

Applies to mail prepared as prescribed by the Postal

Service and addressed for delivery within service area of destination

BMC (or ASF), SCF, or DDU (321.45).

--The Postal Service is working to align SCF, ADC, and BMC service area

boundaries.

--Destination entry will not be required to mail at high-density or

saturation walk-sequence rates.

II-1.--Standard Mail (Third-Class) Automation Subclass--Letters

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

Rate \1\

Sort level Optional/required Rate qualification minimum Tray level (cents)

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

Carrier Route \2\..... Optional............ 10 pieces per route............ Carrier Route (full, 14.1

no overflow).

Carrier Route \2\..... Optional............ 10 pieces per route............ 5-Digit Carrier Routes 14.1

(no minimum).

5-Digit............... Optional............ 150 pieces..................... 5-Digit (full, 15.0

overflow allowed).

3-Digit/Scheme........ Required............ 150 pieces..................... 3-Digit/Scheme (full, 16.8

overflow allowed).

AADC.................. Required............ N/A............................ AADC (full, overflow 17.5

allowed, grouped by 3-

digit/scheme).

Mixed AADC............ Required............ N/A............................ Mixed AADC (no 17.5

minimum, grouped by

AADC and, within

each, by 3-digit/

scheme).

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

\1\ Destination discounts also available.

\2\ Carrier route sortation and rates limited to nonautomated and CSBCS-sorted ZIP Codes.

II-2.--Standard Mail (Third-Class) Automation Subclass--Flats

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

Rate \2\

Sort level Optional/required Package minimum Sack level \1\ (cents)

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

5-Digit..................... Required............ 10 pieces........... 5-Digit (minimum 125 pieces 19.0

or 15 pounds).

3-Digit..................... Required............ 10 pieces........... 3-Digit (minimum 125 pieces 19.0

or 15 pounds).

ADC......................... Required............ 10 pieces........... ADC (minimum 125 pieces or 23.7

15 pounds).

Mixed ADC................... Required............ No minimum.......... Mixed ADC (no minimum)..... 23.7

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

\1\ Palletization preferred. Pallet destinations might not be same as sack levels shown.

\2\ Rate based on type of package, regardless of sack in which, or pallet on which, placed. Destination

discounts also available.

II-3.--Standard Mail (Third-Class) Regular Subclass--Letters

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

Rate \1\

Sort level Optional/required Package minimum Tray level \2\

--------------------------------------------------------------------------------------------------------(cents)-

5-Digit.................... Required............ 10 pieces........... 5-Digit (full, no overflow) 21.9

3-Digit.................... Required............ 10 pieces........... 3-Digit (full, overflow 21.9

allowed).

ADC........................ Required............ 10 pieces........... ADC (full, no overflow).... 26.1

Mixed ADC.................. Required............ No minimum.......... Mixed ADC (no minimum)..... 26.1

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

\1\ Rates based on tray preparation in which package placed.

\2\ Destination discounts also available.

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

Package Rate \1\

Sort level Optional/required minimum Tray level (cents)

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

5-Digit.......................... Optional............ N/A 5-Digit (full, no overflow)...... 21.9

3-Digit.......................... Required............ N/A 3-Digit (full, overflow allowed). 21.9

AADC............................. Required............ N/A AADC (full, no overflow, grouped 26.1

by 3-digit ZIP Code).

Mixed AADC....................... Required............ N/A Mixed AADC (no minimum, grouped 26.1

by AADC and, within each, by 3-

digit ZIP Code).

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

\1\ Destination discounts also available.

II-4.--Standard Mail (Third-Class) Regular Subclass--Flats and Irregular Parcels

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

Minimum

piece rate

Sort level Optional/required Package minimum \1\ Sack level \1\ \2\ \3\ \4\

(cents)

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

5-Digit.................... Required............ 10 pieces........... 5-Digit (minimum 125 pieces 23.7

or 15 pounds).

3-Digit.................... Required............ 10 pieces........... 3-Digit (minimum 125 pieces 23.7

or 15 pounds).

ADC........................ Required............ 10 pieces........... ADC (minimum 125 pieces or 30.5

15 pounds).

[[Page 45317]]

Mixed ADC.................. Required............ No minimum.......... Mixed ADC (no minimum)..... 30.5

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

\1\ No packaging required for machinable parcels. Standards for machinable parcel preparation and rate

eligibility not covered by this rulemaking.

\2\ Palletization permitted and preferred. Pallet destinations different from sack destinations shown.

\3\ Rate based on sack level for sacked mail. For packages on pallets, rate based on package level.

\4\ Destination discounts also available.

II-5.--Standard Mail (Third-Class) Enhanced Carrier Route Subclass

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

Minimum

per-piece

Sort level Optional/required Package minimum Sack level\1\ rate

(cents)

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

Saturation

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

Carrier Route............ Required............ 90% total active Carrier Route (minimum 13.5

residential deliveries 125 pieces or 15 pounds.

or 75% total active

deliveries possible per

route (100% if

simplified address).

5-Digit Carrier Routes 13.5

(no minimum).

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

High Density

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

Carrier Route............ Required............ 125 pieces per route..... Carrier Route (minimum 14.8

125 pieces or 15 pounds.

5-Digit Carrier Routes 14.8

(no minimum).

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

Basic

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

Carrier Route............ Required............ 10 pieces per route...... Carrier Route (minimum 15.5

125 pieces or 15 pounds).

5-Digit Carrier Routes 15.5

(no minimum).

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

\1\ Trays preferred for letters. Palletization preferred for flats. No residual.

Proposed 3 Digit ``Scheme Sort'' Combinations

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

Area Plant name Proposed 3-digit Zip code 3-digit Zip codes served

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

Great Lakes...................... Rockford, IL..................... 610-611................................. 610-611

Peoria, IL....................... 615-616................................. 615-616

Champaign, IL.................... 618-619................................. 618-619

Royal Oak, MI.................... 480,483................................. 480,483

Kalamazoo, MI.................... 490-491................................. 490-491

Flint, MI........................ 484-485................................. 484-485

Saginaw, MI...................... 486-487................................. 486-487

Indianapolis, IN................. 460-462................................. 460-462

Gary, IN......................... 463-464................................. 463-464

South Bend, IN................... 465-466................................. 465-466

Fort Wayne, IN................... 467-468................................. 467-468

Carol Stream, IL................. 601, 603................................ 601, 603

Lansing, MI...................... 488-499................................. 488-489

Palatine, IL..................... 600, 602................................ 600, 602

Mid-Atlantic..................... Baltimore, MD.................... 210-211, 219............................ 210-211, 212, 214, 219

Suburban, MD..................... 208-209................................. 208-209

Greenville, SC................... 293, 296................................ 293, 296

Charleston, WV................... 250-252................................. 250-253

Washington, DC................... 202-205................................. 200, 202-205

Roanoke, VA...................... 240-241................................. 240-243

Louisville, KY................... 400-401, 471............................ 400-402, 471

Charlotte, NC.................... 280-281, 297............................ 280-282, 297

Pacific.......................... San Francisco, CA (A)............ 940, 943-944............................ 940-941, 943-944

San Francisco, CA (B)............ 962-966................................. 962-966, 987

Industry, CA..................... 917-918................................. 917-918

[[Page 45318]]

San Diego, CA.................... 919-921................................. 919-921

Santa Clarita, CA................ 913-914................................. 913-914, 915-916

Honolulu, HI..................... 967-969................................. 967-969

Santa Ana, CA.................... 926-927................................. 926-928

Marina, CA....................... 902-905................................. 902-905

Oakland, CA (A).................. 945, 948................................ 945-948

Oakland, CA (B).................. 946, 947................................ 945-948

Long Beach, CA................... 906-908................................. 906-908

Stockton, CA..................... 952-953................................. 952-953

San Bernardino, CA............... 923-925................................. 923-925

Sacramento, CA................... 956-957................................. 956-957, 958

Southeast........................ Tampa, FL........................ 335, 346................................ 325-336, 346

Macon, GA........................ 310, 312................................ 310, 312, 315-317

Columbus, GA..................... 318-319................................. 318-319

Atlanta, GA...................... 303, 311, 399........................... 303, 311, 399

North Metro, GA.................. 300-301................................. 300-302

Jackson, MS (A).................. 390-391................................. 369, 390-393

Jackson, MS (B).................. 369, 393................................ 369, 390-393

W Palm Beach, FL................. 334, 349................................ 334, 349

Chattanooga, TN.................. 307, 374................................ 307, 373-374

Knoxville, TN.................... 377-379................................. 377-379

Southwest........................ Shreveport, LA (A)............... 710-711................................. 710-714

Shreveport, LA (B)............... 713-714................................. 710-714

Dallas, TX....................... 752-753................................. 751-753

Austin, TX....................... 786, 789................................ 786-787, 789

Western.......................... Albuquerque, NM.................. 873, 877-878, 881, 883-884.............. 870-874, 877-878, 880-884

Billings, MT..................... 590-599, 821............................ 590-599, 821

Colorado Springs, CO............. 808-809................................. 808-810

Las Vegas, NV.................... 889-891................................. 889-891

Reno, NV......................... 861, 894-895, 897....................... 861, 894-895, 897

Salt Lake City, UT............... 840-844................................. 840-844

Midwest.......................... Des Moines, IA (A)............... 500-502................................. 500-503, 509

Des Moines, IA (B)............... 503, 509................................ 500-503, 509

Cedar Rapids, IA................. 522-523................................. 522-524

Madison, WI...................... 535-538................................. 535, 537-538

Green Bay, WI.................... 541-542................................. 541-543

St. Paul, MN..................... 540, 550................................ 540, 550-551

St. Louis, MO.................... 620, 622, 630, 633...................... 620, 622, 630-633

Springfield, MO (A).............. 654-655................................. 648, 654-658

Springfield, MO (A).............. 656-657................................. 648, 654-658

Wichita, KS...................... 670-671................................. 670-672

Omaha, NE........................ 515-516, 680............................ 515-516, 680-681

Northeast........................ Brockton, MA..................... 020, 023-024............................ 020, 023-024

Boston, MA....................... 021-022................................. 021-022

Middlesex-Essex, MA.............. 018-019, 055............................ 018-019, 055

Central Mass, MPC................ 014-015, 017............................ 014-017

Springfield, MA.................. 010-011, 013............................ 010-013

Buffalo, NY...................... 140-143................................. 140-143, 147

Stamford, CT..................... 068-069................................. 068-069

Portland, ME..................... 043, 045................................ 040-043, 045

Burlington, VT................... 054, 056................................ 054, 056

Utica, NY........................ 133-134................................. 133-135

Providence, RI................... 027-028................................. 027-029

Portsmouth, NH................... 038-039................................. 038-039

Albany, NY....................... 120-123................................. 120-123, 128-129

Cape Cod, MA P&DF................ 025-026................................. 025-026

Binghamton, NY................... 137-139................................. 137-139

Syracuse, NY..................... 130-132................................. 130-132, 136

White River Jct, VT (A).......... 057-058................................. 035-037, 050-054, 056-059

White River Jct, VT (B).......... 054, 056................................ ........................................

White River Jct, VT (C).......... 035-036, 051-053, 059...................

White River Jct, VT (D).......... 037, 050................................ ........................................

Allegheny........................ South Jersey, NJ (A)............. 080-081................................. 080-081, 082-083

South Jersey, NJ (B)............. 082-084................................. 080-081, 082-083

Johnstown, PA.................... 155, 157................................ 155, 157, 159

Erie, PA......................... 164-165................................. 164-165

Williamsport, PA................. 169, 177................................ 169, 177

Lehigh Valley, PA................ 180-181, 183............................ 180-181, 183

Philadelphia, PA................. 191-192................................. 190-192

Southeastern, PA................. 193-194................................. 189, 193-194

Wilmington, DE................... 197-199................................. 197-199

Columbus, OH (A)................. 430-431, 433............................ 430-433, 437-438

[[Page 45319]]

Columbus, OH (B)................. 437-438................................. 430-433, 437-438

Toledo, OH....................... 434-436................................. 434-436

Akron, OH........................ 442-443................................. 442-443

Youngstown, OH................... 444-445................................. 444-445

Canton, OH....................... 446-447................................. 446-447

Cincinnati, OH (A)............... 410, 470................................ 410, 450-452, 470

Cincinnati, OH (B)............... 450-451................................. 410, 450-452, 470

New York Metro................... San Juan, PR..................... 006-009................................. 006-009

Hackensack, NJ................... 074, 076................................ 074, 076

West Jersey, NJ.................. 078-079................................. 078-079

Trenton, NJ...................... 085-087................................. 085-087

Kilmer, NJ....................... 077, 088................................ 077, 088-089

Queens, NY....................... 110, 113-114, 116....................... 110, 113-114, 116

Mid-Hudson, NY................... 124-124, 127............................ 124-127

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Total Reduction in Separations From Combined 3-Digit Destinations: 166.

III. Periodicals

The classification reform proposal changes the name for second-

class mail to Periodicals. Second-class regular rate mail will be split

into two subclasses: Publications Service and Regular Periodicals.

Preferred second-class mail preparation rules and rates, including

those for in-county mail, will not change as a result of the pending

classification reform case.

A. General

1. Basic Requirements

The requirements listed below represent no change to current

standards governing eligibility for second-class rates.

Must qualify as General Publication, Requester

Publication, Publication of Institution and Society, or Publication of

State Department of Agriculture (411.1).

Must be mailable matter consisting of newspapers and other

periodical publications (411.2).

Must be regularly issued at stated intervals at least four

times a year, bear a date of issue, and be numbered consecutively

(411.3).

Must have a known office of publication (411.4).

Must be formed of printed sheets (411.5).

No size or weight limits (430).

Postage must be paid in accordance with (441).

Must be presorted as prescribed by the Postal Service

(442).

Must be identified as prescribed by the Postal Service

(444).

May have certain attachments and enclosures (443).

Must file certain information (445).

May contain enclosures/supplements as prescribed by the

Postal Service (446).

Must be deposited at places and times designated by the

Postal Service (451).

2. General Publications

These requirements are the same as current standards for second-

class mail:

Must be for the purpose of disseminating information of a

public character, or devoted to literature, the sciences, art, or some

special industry (412.2).

Must have at least 50% paid circulation (412.31).

Must have a legitimate list of subscribers (412.32).

Must meet tests to ensure that it is not designed

primarily for advertising purposes, including may not have advertising

in excess of 75% in more than one-half of its issues during any 12-

month period (412.4).

3. Requester Publications

These requirements are the same as current standards for second-

class mail:

Must contain at least 24 pages (413.2).

Must contain at least 25% nonadvertising (413.31).

Must meet ownership and control test for advertising

purposes (413.32).

Must have a legitimate list of requesters and at least 50%

distribution to requesters (413.41).

4. Publications of Institutions and Societies

These requirements are the same as current standards for second-

class mail:

Must meet General Publications advertising requirements

(414.1).

No non-publisher advertising unless certain conditions

meet (414.1, 414.2).

Published by an institution or society (414.1).

5. Publications of State Departments of Agriculture

These requirements are the same as current standards for second-

class mail:

Issued by a state department of agriculture (415).

Contains no advertising and further the objectives of the

department (415).

6. Foreign Publications

The requirements are the same as current standards for second-class

mail including the following:

Must have same character as domestic periodicals (416).

B. Regular Subclass

1. General Requirements

With the exception of the change in the description of rate

categories and the alignment of presort rules with those for

Publications Service, as explained below, the requirements for the

Regular Periodicals subclass have not changed from those currently

applicable to regular second-class mail.

Must be presorted, marked, and presented as prescribed by

the Postal Service (421.1).

--Must meet current requirements in DMM M010, M020, M030, M041, M042,

M200, M800, and D200.

Must mee

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