# Domestic Mail Manual Changes To Implement the Rate, Fee, and Classification Changes in Docket No. R97-1

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URL: https://www.frixlaw.com/law-library/documents/fr%3A98-18271

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** July 14, 1998
- **Citation:** 63 FR 37946

## Text

SUMMARY: This final rule sets forth the Domestic Mail Manual (DMM)
standards adopted by the Postal Service to implement the rate, fee, and
classification changes for all classes of mail included in the Decision
of the Governors of the Postal Service in Postal Rate Commission Docket
No. R97-1.

EFFECTIVE DATE: This final rule is effective at 12:01 a.m. on January
10, 1999.

FOR FURTHER INFORMATION CONTACT: Lynn M. Martin, 202-268-6351 (all
topics); Paul Lettman, 202-268-6261 (Parcel Post); Thomas DeVaughan,
202-268-4491 (Business Reply Mail).

SUPPLEMENTARY INFORMATION: On July 10, 1997, the Postal Service, acting
under sections 3622 and 3623 of the Postal Reorganization Act (39
U.S.C. 3622, 3623), filed a request for a recommended decision by the
Postal Rate Commission (PRC) on proposed rate, fee, and classification
changes. The PRC designated this filing as Docket No. R97-1. A notice
of filing, with a description of the Postal Service's proposals, was
published by the PRC on July 23, 1997, in the Federal Register (62 FR
39660).
On March 16, 1998, the Postal Service published for public comment
in the Federal Register a proposed rule (63 FR 12864) that provided
information on the implementation rules for the rate, fee, and
classification changes that the Postal Service proposed to adopt if its
requested changes in Docket No. R97-1 were recommended by the PRC and
approved by the Governors of the Postal Service.
Pursuant to 39 U.S.C. 3624, on May 11, 1998, the PRC issued its
Recommended Decision on the Postal Service's Request to the Governors
of the Postal Service. The PRC recommendations made revisions to some
of the mail classification structure, rates, and fees requested by the
Postal Service. Based on an extensive analysis of the PRC's Recommended
Decision and deliberation as to its consequences to the Postal Service
and its customers, and pursuant to 39 U.S.C. 3625, the Governors acted
on the PRC's recommendations on June 29, 1998. The Governors determined
to approve the PRC's Recommended Decision except for the recommended
classifications and fees for Prepaid Reply Mail and the recommended
``shell classification'' for Courtesy Envelope Mail. The Governors
expressed concern about the necessity for these separate
classifications. The Governors have encouraged management to consider
whether refinements to the approved Qualified Business Reply Mail
(QBRM) classifications and fees can be developed which improve upon the
accounting options and fees approved for QBRM. The Postal Service plans
to further study the issue of consumer automation discounts.
The Governors allowed under protest, and returned to the Postal
Rate Commission for reconsideration, the rate schedules for Within
County Periodicals, Library Rate Mail, and DDU Parcel Post.
The Board of Governors set an implementation date of January 10,
1999, for the approved rate, fee, and classification changes to take
effect, except for delivery confirmation and the electronic form of
return receipt (signature confirmation) service for delivery
confirmation customers. The Board of Governors determined that
implementation of the new delivery confirmation service approved in the
Governors' Decision, as well as the classification change allowing
delivery confirmation as a sole prerequisite for return receipt
service, should take place after the effective date established for the
other changes approved and allowed by the Governors, but not later than
June 1, 1999. Later implementation will provide time for deployment of
the technology used to provide these service features. The Board of
Governors determined that an effective date for delivery confirmation
and the electronic form of return receipt (signature service) will be
selected through future action by the Board.
A notice announcing the Governors' decision and the issuance of
final Domestic Mail Classification Schedule and Rate Schedule changes
is contained in a separate notice to be published in the Federal
Register.
This final rule contains the DMM standards adopted by the Postal
Service to implement the Governors' decision. The revised DMM standards
will take effect on January 10, 1999. The standards for delivery
confirmation and the electronic form of return receipt (signature
confirmation) service are not included in this final rule. They will be
contained in a separate Federal Register notice when an implementation
date is set by the Board of Governors.
Part A of this notice summarizes major changes that have been made
to or added to the proposed implementation standards since the proposed
rule. This includes changes made because of differences in the Postal
Service's proposal and the PRC's recommended decision, changes made in
response to the Governors' decisions, and changes made by the Postal
Service in response to mailer comments or for other reasons. Part B
provides a summary of all of the changes in Domestic Mail Manual
standards made as a result of Docket No. R97-1 and this rulemaking
process. Part C contains an analysis of comments received on the
proposed rule and the Postal Service responses. Part D summarizes the
changes to the DMM by DMM module, followed by the text of the revised
DMM standards.

A. Major Changes and Additions Other Than Rate and Fee Levels Since
the March 16, 1998, Proposed Rule

1. Express Mail

a. Hazardous Materials Surcharges
The Postal Rate Commission did not recommend the proposed
surcharges for hazardous medical materials and for other hazardous
materials. Therefore, provisions for hazardous materials surcharges
have not been included in the DMM.

2. Priority Mail

a. Hazardous Materials Surcharges
The Postal Rate Commission did not recommend the proposed
surcharges for hazardous medical materials and for other hazardous
materials. Therefore, provisions for hazardous materials surcharges
have not been included in the DMM.
b. Weight
The weight at which heavy First-Class Mail pieces must be paid at
the Priority Mail rates is increased from First-Class Mail weighing
over 11 ounces to First-Class Mail weighing over 13 ounces. At the
mailer's option, any other mail matter (including regular First-Class
Mail weighing 13 ounces or less) may be mailed as Priority Mail.

3. First-Class Mail

a. Hazardous Materials Surcharges
The Postal Rate Commission did not recommend the proposed
surcharges for hazardous medical materials and for other hazardous
materials. Therefore, provisions for hazardous materials surcharges
have not been included in the DMM.

[[Page 37947]]

b. Heavy Piece Discount
The additional heavy piece presort discount of $0.046 for the first
ounce of mailpieces weighing more than 2 ounces remains in effect.
c. Maximum Weight
The maximum weight of First-Class Mail is increased from 11 ounces
to 13 ounces.
d. Prepaid Reply Mail
Prepaid Reply Mail will not be implemented.

4. Periodicals

a. Eligibility for In-County High Density Rates
Eligibility for the high density rate for In-County pieces will be
revised to allow walk-sequenced pieces for a carrier route to qualify
when there are either a minimum of 125 pieces for a carrier route or
addressed pieces for at least 25 percent of the total active possible
deliveries on a carrier route.

5. Standard Mail (A)

a. Hazardous Materials Surcharges
The Postal Rate Commission did not recommend the proposed
surcharges for hazardous medical materials and for other hazardous
materials. Therefore, provisions for hazardous materials surcharges
have not been included in the DMM.
b. ``Presorted Standard'' Marking
A two-year transition period (instead of one year) will be
permitted for mailers to change their ``Bulk Rate'' markings to
``Presorted Standard.'' Until January 10, 2001, mailers of regular rate
Standard Mail (A) material (matter at regular Presorted Standard Mail
(A), regular automation, and regular Enhanced Carrier Route rates) may
use either the ``Bulk Rate'' or the ``Presorted Standard'' markings or
their respective authorized abbreviations on their mailings. At the
mailer's option the ``Presorted Standard'' marking or its abbreviation
may be used instead of ``Bulk Rate'' or its abbreviation effective
immediately.
c. ``RSS'' Marking
The Postal Service will not require a separate ``RSS'' marking for
pieces that are subject to the residual shape surcharge.
d. Pieces Not Qualifying for Standard Mail
(A). Mailers have indicated that they may have pieces prepared with
Standard Mail (A) rate markings that cannot be mailed at a Standard
Mail (A) rate under the provisions for ``residual'' pieces set forth in
the proposed rule and this final rule. Reasons include the mailer
having pieces remaining in a mailing job that cannot be matched to a
correct 5-digit ZIP Code, or the mailer choosing not to hand-sort
handwritten pieces that could not be barcoded and sorted by a multi-
line optical character reader (MLOCR). In such instances, mailers must
pay single-piece First-Class Mail or Priority Mail postage on the
pieces.
If mailers desire to receive First-Class or Priority Mail service
as applicable based on the weight of the mailpieces (including
forwarding and return services), they must re-envelope or otherwise
prepare the mailpieces so that they bear only the proper First-Class
Mail or Priority Mail rate markings, ancillary service endorsements,
Address Change Service (ACS) codes, etc. Metered pieces weighing over
13 ounces and less than 16 ounces must always be prepared under this
method.
Except for metered pieces weighing over 13 ounces and less than 16
ounces, mailers who do not desire to receive First-Class or Priority
Mail service on such pieces may submit them ``as is'' (i.e., bearing
the Standard Mail (A) markings and endorsements). No additional
markings or postage are to be added to these pieces. First-Class Mail
or Priority Mail postage must be paid for these pieces using the
appropriate First-Class or Priority Mail postage statement. Except for
metered pieces weighing over 13 ounces and less than 16 ounces, mail
bearing metered or precanceled stamp postage must, under this option,
pay the difference between the postage affixed and the First-Class Mail
or Priority Mail rates by means of an advance deposit account or by
affixing a meter strip for the appropriate amount to the postage
statement. If the pieces weigh 13 ounces or less, mailers must use
special line items on the new First-Class postage statements under the
heading ``From Standard Mail (A)'' to record the pieces mailed. This
option may be used for fewer than 200 pieces of permit imprint mail
only if the pieces were part of a larger mailing job and are submitted
for acceptance along with the mail and a Standard Mail (A) postage
statement for the other pieces in the same mailing job. Metered pieces
weighing over 13 ounces and less than 16 ounces cannot use this option
since there is no postage statement on which they can be reported and
therefore must be re-enveloped and prepared as Priority Mail.

6. Standard Mail (B)

a. Barcoded Discounts
(1) Additional Barcode Option. A fourth barcode symbology, UCC/EAN
Code 128, has been added. The USPS, in cooperation with the parcel
shipping industry, has adopted the UCC/EAN Code 128 as its preferred
code structure and symbology standard. The UCC/EAN Code 128 permits
encoding of either the 5-digit ZIP Code or the ZIP+4 code. The ZIP Code
information must be preceded by the Application Identifier ``420'' that
signifies a domestic ZIP Code, and must not include the trailing
verifier character ``9'' used with other barcode symbologies. The UCC/
EAN code 128 will become mandatory for the barcoded discount in five
years (January 10, 2004). During the 5-year phase-in period, UCC/EAN
Code 128, as well as USS Code 128; USS Code I 2/5; and USS Code 39
symbologies will be permitted.
(2) Numeric Equivalent of Barcode. The requirement to print human-
readable characters representing the numeric equivalent of the ZIP Code
information in the barcode (i.e., omitting the verifier character or,
for UCC/EAN Code 128, omitting the 3-digit application identifier
characters) near the barcode will not be required if the barcode is on
the same label as the address block and is placed in close proximity to
the address. The human-readable numeric equivalent of the ZIP Code
information in the barcode will be required for barcodes not printed on
the same label as the address block on mailpieces.
(3) Parcel Post ASF Barcoded Rate Exclusion. The exclusion from the
barcoded discount of machinable pieces eligible for DBMC rates that are
entered at an auxiliary service facility (ASF) has been revised. Since
the Phoenix, Arizona, ASF has parcel barcode reading equipment,
machinable pieces of Parcel Post DBMC rate mail entered at the Phoenix
ASF will be eligible for barcoded discounts. Since no other ASFs have
barcode reading equipment, DBMC rate mail entered at ASFs other than
Phoenix will not be eligible for the barcoded discount.
b. Hazardous Materials Surcharges
The Postal Rate Commission did not recommend the proposed
surcharges for hazardous medical materials and for other hazardous
materials. Therefore, provisions for hazardous materials surcharges
have not been included in the DMM.

[[Page 37948]]

c. Parcel Post BMC Presort and OBMC Presort Discounts
(1) Mail Preparation. The proposed requirement to prepare
machinable parcels in pallet boxes measuring 72 inches high and to fill
the boxes with at least 54 inches of mail to qualify for these
discounts is revised. The new requirement is to prepare machinable
parcels in pallet boxes measuring 69 inches high and to fill the boxes
with at least 52 inches of mail to qualify for these discounts. The
preparation requirements for nonmachinable mail did not change.
(2) Documentation. The requirement for documentation listing number
of pieces per individual pallet is eliminated.
d. Parcel Post Oversized Pieces.
The 10% limit per mailing of pieces that measure over 108 inches
but not more than 130 inches in combined length and girth is removed.
In its place the PRC recommended and the Governors of the Postal
Service approved oversized rates for such pieces. These oversized rates
are greater than the rates for 70-pound parcels.
e. Parcel Post DSCF Rate
(1) Sacking Requirements Revised. The minimum number of pieces per
5-digit sack is revised from 10 pieces to 7 pieces. A provision also is
added to allow one overflow sack per 5-digit destination. The overflow
sack has no minimum quantity requirement.
(2) New Pallet Preparation Option Added. In response to mailer
comments that the pallet minimums were too high, a new pallet
preparation option has been added. This option allows preparation of 5-
digit pallets with a minimum of 35 pieces and 200 pounds of mail,
provided the average number of pieces placed on pallets qualifying for
the DSCF rate in such a mailing is at least 50 pieces. In order to
document that no pallet contains less than 35 pieces and 200 pounds and
that the average number of pieces per pallet claiming the DSCF rate is
at least 50 pieces, mailers will be required to submit detailed
documentation and place sequential identification numbers on qualifying
pallets of DSCF rate mail. The documentation must list each pallet in
sequential order by pallet identification number. The listing must show
for each pallet: the pallet identification number, the 5-digit ZIP Code
of the pallet, the total weight of pieces on the pallet, the total
number of pieces on the pallet, and the cumulative total of pieces
(i.e., the number equal to the number of pieces for that pallet plus
the sum of the pieces on all pallets listed above it).
(3) Overflow Provisions for Palletized Mail Added. Provisions are
added to allow overflow from 5-digit pallets to be placed in
corresponding 5-digit sacks. The overflow 5-digit sacks have no minimum
quantity requirement, and the pieces placed in them will qualify for
the DSCF rate. Mailers will also have the option of preparing a 5-digit
overflow pallet. However, the pieces on overflow pallets, which by
definition contain less than the minimum quantity required for a
qualifying DSCF rate pallet, are not eligible for DSCF rates and are
subject to the DBMC rates.
(4) Pallet Boxes. The prohibition against use of pallet boxes on
pallets for the DSCF rate is eliminated. Pallet boxes on pallets will
be permitted for any 5-digit facility that can handle pallets, provided
the pallet boxes measure no more than 60 inches high and meet the
pallet box provisions in DMM M041. Mail prepared in pallet boxes is
subject to the same pallet minimum preparation options as parcels
placed directly on pallets.
(5) Sacks on Pallets. Under DMM M045.12, mailers may consolidate 5-
digit sacks prepared under DMM M630 and/or under DMM M045.11 that
qualify for the DSCF rate on an SCF pallet. Both 5-digit sacks meeting
or exceeding the 7-piece minimum and overflow sacks (overflow from
sacks and overflow from pallets) may be palletized in this manner.
However, if in the same mailing, mail is palletized under M045.11.1 and
sacked under M630, the sacks that are prepared as overflow from pallets
must, at the time of acceptance, be separated from sacks prepared under
M630. SCF pallets containing 5-digit sacks qualifying for the DSCF rate
may be prepared without having to first prepare all possible 5-digit
pallets and without having to meet a 250-pound pallet minimum. A
special pallet label is specified for these pallets in M045.
(6) Additional Information Pertaining to Drop Shipment Product.
Mailers must use the following additional information when using the
Drop Shipment Product to determine whether mail for a 5-digit ZIP Code
delivery unit may be prepared on pallets to qualify for the DSCF rate.
The DMM standards are revised to specify that when the Drop Shipment
Product shows that mail for a single 5-digit ZIP Code area is delivered
from more than one facility, the facility listed in the Drop Shipment
Product that delivers mail to the majority of city carrier routes will
be considered the delivery unit for parcel post. Two exhibits, Exhibits
E652.6.0 and 652.7.0 that contain exceptions to the ``majority of city
carriers'' rule, are also added to the DMM. If a 5-digit ZIP Code is
listed in DMM Exhibit E652.6.0 or E652.7.0, the facility listed in one
of those exhibits must be used to determine the name of the delivery
unit. The name of the delivery unit must then be looked up in the Drop
Shipment Product to determine if mail for it, and therefore mail for
the 5-digit ZIP Code, can be prepared on pallets to qualify for the
DSCF rate. At some point in the future the information in these two
exhibits will be incorporated in the Drop Shipment Product.
(7) Nonmachinable Outsides. Nonmachinable outside (NMO) parcels by
definition cannot be prepared in sacks because they will not fit in a
sack. Therefore, NMOs must be prepared directly on pallets or in pallet
boxes on pallets. If overflow pallets are prepared, the pieces on such
pallets are subject to the DBMC rates. The DSCF rate is not available
for NMOs at those 5-digit delivery units that cannot handle palletized
mail as listed in the Drop Shipment Product and in Exhibits E652.6.0
and E652.7.0.
(8) Exceptions to DMM Exhibit E652.5.0. Provisions are added to
allow mailers to submit a written request to the Area Manager,
Operations Support, for permission to bring palletized mail for a 5-
digit ZIP Code area listed in DMM Exhibit E652.5 to the DSCF rather
than to the applicable BMC. Such exceptions must be requested at least
15 days in advance and may be granted for a limited period of time
only.
(9) Separation of Perishable and Nonperishable Parcels. The
requirement to separate perishable and nonperishable parcels is deleted
from the final DMM rules.
f. Parcel Post DDU Rate
(1) Pallet Boxes. The prohibition against the use of pallet boxes
on pallets is eliminated. Pallet boxes on pallets will be permitted for
any 5-digit facility that can handle pallets, provided that the pallet
boxes measure no more than 60 inches high and meet the pallet box
provisions in DMM M041.
(2) Additional Lists Pertaining to Drop Shipment Product. Mailers
must use the following additional information when using the Drop
Shipment Product to determine the location of the delivery unit for a
5-digit ZIP Code area. When mail for a single 5-digit ZIP Code area is
delivered from more than one facility, the facility listed in the Drop
Shipment Product that delivers mail to the majority of city carrier
routes is the delivery unit at which mail must be entered to claim the
DDU rate. There are two exceptions to this general rule. Two

[[Page 37949]]

exhibits, Exhibit E652.6.0 and Exhibit E652.7.0 are added to DMM E652.
Exhibit E652.6.0 contains exceptions to the ``majority of city carrier
routes'' rule. Exhibit E652.7.0 contains other anomalous situations
including those where a parcel annex is used to deliver mail for
multiple 5-digit ZIP Codes. If a 5-digit ZIP Code is listed in DMM
Exhibit E652.6.0 or Exhibit E652.7.0, the facility location in one of
those lists is the delivery unit to which the mail must be brought to
qualify for the DDU rate. This facility must be looked up in the Drop
Shipment Product to determine if that facility can handle pallets and
(for facilities listed in Exhibit E652.6.0) to determine the address of
the facility.
(3) Pallet Stacking. Mailers may stack pallets of mail entered at
destination delivery units provided that the mailer unloads and
unstacks the pallets at the delivery unit and removes any strapping
material.
(4) Appointments. To facilitate the scheduling of drop shipments to
delivery units, the Postal Service will allow standing appointments if
shipment frequency is weekly or more often. A provision also has been
added in E652.3.4 to specify that appointments are required for mixed
loads of Periodicals and Standard Mail (B) entered at destination entry
rates. DMM E250.2.4 already contains a similar provision for DDU entry
of mixed loads of Periodicals and Standard Mail.
(5) Grace Period for Late Arrivals. The grace period allowed for
late arrival of shipments at DDUs, previously stated to be 1 hour, is
revised to 20 minutes.
g. Markings
(1) Parcel Post. Except for mail qualifying for a drop shipment
rate, mailers will be given a one-year grace period, until January 10,
2000, to print the ``Parcel Post'' or ``PP'' markings in the postage
area. As of January 10, 1999, Drop Shipment rate mail must show the
``Parcel Post'' or ``PP'' marking in the postage area and the marking
``Drop Ship'' or ``D/S'' in either the postage area or on the line
above or two lines above the address. An exception is that DBMC rate
mailers currently using the ``DBMC Parcel Post'' or ``DBMC PP'' marking
may continue to do so until January 10, 2000.
(2) Standard Mail (B) Other than Parcel Post. Mailers not already
doing so will have until January 10, 2000, to place the current
required subclass markings ``Bound Printed Matter,'' ``Special
Standard,'' and ``Library Mail'' or ``Library Rate'' in the postage
area (as opposed to elsewhere on the mailpiece).
(3) Bound Printed Matter. At the mailer's option the ``Presorted''
marking may be used instead of ``Bulk Rate'' effective immediately.
(This marking will be required effective January 10, 2000.) In
addition, mailers may use the marking ``Presorted Standard'' (or
``PRSRT STD'') instead of ``Presorted'' (or ``PRSRT'') wherever the
``Presorted'' marking is required or permitted.

7. Special Services

a. Bulk Insurance
A provision requiring an electronic manifest to qualify for the
bulk insurance discount was recommended by the PRC and approved by the
Governors of the Postal Service. Therefore, one of the requirements to
obtain this discount will be to provide a hard copy of Form 3877, Firm
Mailing Book for Accountable Mail (or facsimile), and a copy of Form
3877 on a diskette or other electronic medium. When systems that
electronically capture information on accountable mail are completed
and programming changes that will tie the St. Louis ASC into these
systems are completed, mailers will be required to file claims
electronically. When or before these changes and systems are completed,
bulk insurance mailers will be provided with instructions for a new
format for the electronic Form 3877 and with instructions for
electronically filing claims.
b. Business Reply Mail
Mailers will have until January 10, 2001, to comply with the
standard that Qualified Business Reply Mail pieces and other BRM pieces
bearing a barcode that measure more than 4\1/4\ inches by 6 inches must
meet a minimum thickness requirement of .009 inch. In addition, mailers
of QBRM and other BRM pieces that bear a barcode will be given until
January 10, 2001, to meet the amended requirements for the barcode
clear zone, window placement for lower right barcodes, and placement of
the leftmost bar of lower right barcodes. The barcode specifications
that are in DMM C840 will be required, rather than optional. The basis
weight requirement for envelopes in C810.7.1 will not apply to BRM. BRM
envelopes must continue to meet a minimum paper basis weight of 20
pounds (measured using 500 sheets of 17- by 22-inch paper). The
standard in current S922.6.4 that envelope material must not have a
phosphorescence exceeding 4.0 phosphor meter units is retained and
corrected to state that envelope material must not have a red
fluorescence exceeding 4.0 phosphor meter units.
c. Delivery Confirmation
Standards concerning delivery confirmation were removed pending an
implementation date.
d. Merchandise Return Service
The Postal Service revised the requirements for preprinted rate
markings. The Priority Mail marking will not be required to be
preprinted on all matter that might be subject to that rate upon
return. It is understood that permit holders may not be able to predict
whether a piece that might be returned will weigh over 13 ounces but
less than 16 ounces and therefore need a Priority Mail marking on the
merchandise return label. Therefore, the permit holder must preprint a
Priority Mail marking only when it is desired that the mail matter be
returned at those rates regardless of its weight. Pieces prepared with
merchandise return labels that do not contain a preprinted rate marking
will be returned at the First-Class Mail rates if weighing 13 ounces or
less, at the Priority Mail rates if weighing over 13 ounces but less
than 16 ounces, and at the Parcel Post rates if weighing 16 ounces or
more.
d. Return Receipt
The Postal Service determined not to revise DMM D042.1.7.

B. Summary of all DMM Revisions for R97-1

1. Express Mail

a. Rate Highlights
Overall, Express Mail rates will increase 9%. For Post Office to
Addressee service, the letter rate will increase to $11.75 and the 2-
pound flat rate will increase to $15.75. The fee for pickup service
will increase from $4.95 to $8.25 per occurrence.
b. Rate Structure
There are no changes to the rate structure.

2. Priority Mail

a. Rate Highlights
On average, Priority Mail rates will increase 5.6%. The fee for
pickup service will increase from $4.95 to $8.25 per occurrence.
b. Classification and Rate Structure
(1) Keys and Identification Devices. Keys and identification
devices that weigh more than 13 ounces but not more than 2 pounds will
be subject to the 2-pound Priority Mail rate plus a $0.30 fee.
(2) Elimination of Presort Category. The Presorted Priority Mail
rate category

[[Page 37950]]

will be eliminated. Therefore, DMM labeling list L102, ADCs--Presorted
Priority Mail, also will be eliminated.
(3) Delivery Confirmation. A new delivery confirmation service will
be available with Priority Mail in early 1999. See further details
under ``Special Services.''

3. First-Class Mail

a. Rate Highlights
The single-piece first-ounce letter rate will be increased one cent
from $0.32 to $0.33, and the rate for each additional ounce will
decrease to $0.22. The nonstandard surcharges for non-card-rate pieces
will not increase and will remain at $0.11 for single-piece rate mail
and $0.05 for presorted mail. For card rates, no change will be made to
the single-piece rates, nonautomation Presorted rates, automation 3-
digit rates and automation basic rates. No change will be made to \3/
5\-digit automation flat rates. Small increases will be made to other
automation rates and Presorted rates. The annual presort mailing fee
will be increased from $85.00 to $100.00.
b. Classification and Rate Structure
(1) Increase in Maximum Weight. The maximum weight of First-Class
Mail will be increased from 11 ounces to 13 ounces.
(2) Keys and Identification Devices. Keys and identification
devices that weigh 13 ounces or less will be subject to the applicable
single-piece letter rate, plus a $0.30 fee and, if applicable, the
nonstandard surcharge.
(3) Qualified Business Reply Mail. A new classification category
and rate structure for qualified business reply mail (QBRM) that must
be letter-size (including cards), automation-compatible, and barcoded
will be added. As a result, the BRMAS fee category will be eliminated.
The rate structure for QBRM includes a lower first-ounce rate. The fee
structure for QBRM requires an annual permit fee, an annual accounting
fee, and a fee for each piece returned. More specific requirements for
this new classification category are described under DMM E150 and under
``Special Services'' below.
c. Rate Markings
The abbreviation ``PRSRT'' will be permitted for the required
``Presorted'' marking.

4. Periodicals

a. Rate Highlights
There will be average rate increases of 4.6% for Regular, 1.1% for
In-County, 8.0% for Nonprofit, and 12.1% for Classroom publications.
Authorization fees will not change, except that the additional entry
fee decreases from $85.00 to $50.00.
b. Classification and Rate Structure
(1) Per-Piece Rates. Separate 5-digit presort per-piece rates and
3-digit presort per-piece rates will be added for Regular, Nonprofit,
Classroom, and In-County subclasses. Furthermore, the 3-digit presort
level rates will apply to both unique and nonunique 3-digit ZIP Code
prefixes.
To qualify for the nonautomation 5-digit per-piece rates, mail must
be prepared in a 5-digit package of six or more pieces and must be
containerized as follows: for letter mail, be placed in a 5-digit tray;
for nonautomation flat mail, be placed in a 5-digit sack or on any
presort level of pallet. To qualify for automation 5-digit per-piece
rates for letters, mail must be part of a group of 150 pieces for the
same 5-digit or 5-digit scheme, properly placed in a 5-digit or 5-digit
scheme tray. To qualify for automation 5-digit per-piece rates for
flats, mail must be prepared in a 5-digit package of six or more pieces
and placed in any level of sack or on any level of pallet.
To qualify for the nonautomation 3-digit per-piece rates, sacked
flat-sized mail must be prepared in a 5-digit package of six or more
pieces or in a 3-digit package of six or more pieces, and must be
placed in a 3-digit sack; trayed letter-size mail must be prepared in a
5-digit package of six or more pieces or in a 3-digit package of six or
more pieces, and must be placed in a 3-digit tray. Palletized flat-
sized mail must be prepared in a 3-digit package of six or more pieces
and placed on a 3-digit or higher (e.g., SCF, ADC) level of pallet.
To qualify for automation 3-digit per-piece rates for letters, mail
must be part of a group of 150 pieces for the same 3-digit or 3-digit
scheme and be properly placed in a 3-digit or 3-digit scheme tray. To
qualify for automation 3-digit per-piece rates for flats, mail must be
prepared in a 3-digit package of six or more pieces and placed in a 3-
digit or higher (e.g. ADC or mixed ADC) level of sack or on a 3-digit
or higher (e.g., SCF, ADC) level of pallet.
(2) Eligibility for In-County High Density Rates. Eligibility for
the high density rate for In-County pieces will be revised to allow
walk-sequenced pieces for a carrier route to qualify when there are
either a minimum of 125 pieces for the carrier route, or addressed
pieces for at least 25 percent of the total active possible deliveries
on the carrier route.
c. Mail Preparation
(1) Automation Letters. Preparation of the 5-digit or 5-digit
scheme sort for letter-size automation rate mailings will be revised
from a required level of sort to an optional level of sort.
(2) SCF Sack. The current optional SCF sack for nonletter mail will
be revised to a required level of preparation. Preparation of an
optional origin/required entry SCF sack will be added. Preparation of
an optional origin/required entry 3-digit sack will be eliminated. SCF
packages are not and will not be permitted.
d. Forwarding and Return
Charges for the return of Periodicals mail bearing the ``Address
Service Requested'' endorsement will be paid at the First-Class Mail
rates for pieces weighing 13 ounces or less and at the Priority Mail
rates for pieces weighing more than 13 ounces. (Priority Mail rates
also apply to pieces weighing 16 ounces or more.) This is due to the
elimination of the Standard Mail (A) single-piece rates discussed
below.

5. Standard Mail (A)

a. Rate Highlights
There will be average rate increases of 2.6% for Regular, 2.3% for
Enhanced Carrier Route, and 14.0% for Nonprofit subclasses. On average,
there will be a 8.0% decrease in Nonprofit Enhanced Carrier Route
rates. Nonprofit and Nonprofit ECR pound rates will decrease. Regular
and ECR pound rates will remain the same. For the first time, the
automation 5-digit letter rate will be lower than the basic Enhanced
Carrier Route rate. The basic Enhanced Carrier Route minimum per-piece
rates will be the same for letter-size and for nonletter-size pieces.
The destination entry discounts will maintain their current discount
differentials between BMC and SCF and between SCF and DDU. The annual
presort mailing fee will increase from $85.00 to $100.00.
b. Rate Structure
(1) Elimination of Single-Piece Rates. The single-piece Standard
Mail (A) rates will be eliminated. This will affect the treatment of
pieces in situations where there are fewer than 200 pieces remaining in
a mailing job after preparation of an Enhanced Carrier Route and/or an
automation rate mailing, situations in which there are fewer than 200
pieces in a mailing job, or situations in which the pieces are not or
may not be presorted. See ``Mail Preparation'' below for further
information. It also affects the fees for forwarding and return of
Standard Mail

[[Page 37951]]

(A) as described below under ``Forwarding and Return.'' With one
exception, single pieces that weigh less than 16 ounces will be subject
to return postage at single-piece First-Class or Priority Mail rates
multiplied by 2.472. The exception is that single pieces weighing less
than 16 ounces that could qualify for single-piece Special Standard
Mail or Library Mail rates will continue to be eligible for those rates
upon return if properly endorsed because there are no minimum weight
requirements for those two subclasses of Standard Mail (B).
(2) Residual Shape Surcharge. Pieces that are prepared as parcels
or that are not letter-size or flat-size will be subject to a $0.10 per
piece residual shape surcharge in addition to the applicable nonletter
postage. This surcharge applies to such pieces mailed at all Standard
Mail (A) subclasses (Regular, Enhanced Carrier Route, Nonprofit,
Nonprofit Enhanced Carrier Route).
c. Mail Preparation
(1) Bulk Rate Markings and Nomenclature. Effective January 10,
2001, the basic rate marking requirements for regular rate mailings
(including Enhanced Carrier Route) will be changed from ``Bulk Rate''
or ``Blk. Rt.'' to ``Presorted Standard'' or ``PRSRT STD.'' During the
two-year transition period, either the ``Bulk Rate'' or the ``Presorted
Standard'' markings or their authorized abbreviations will be
acceptable. For consistency, the DMM will use the term ``Presorted
Standard Mail (A)'' or ``Presorted Standard'' when referring to the
mailings and rates currently referred to as ``nonautomation presort (3/
5 and basic) Standard Mail (A).'' At the mailer's option the
``Presorted Standard'' or ``PRSRT STD'' marking may be used instead of
``Bulk Rate'' effective immediately.
(2) Markings for Standard Mail (A) Matter Paid at Standard Mail (B)
Rates. Effective January 10, 1999, mailings paid at Standard Mail (B)
rates under the exception in DMM E612.4.6 must bear the appropriate
Standard Mail (B) rate marking, not the applicable Standard Mail (A)
rate marking. DMM E612.4.6 contains provisions that allow Standard Mail
(A) matter weighing less than 16 ounces to pay Standard Mail (B) rates
if those rates are lower than Standard Mail (A) rates and the matter
and the mailing could qualify for the Standard Mail (B) rate except for
weight. For example, if a mailer had flat-size printed matter pieces
that met the qualifications for Bound Printed Matter in DMM E630 (until
January 10, DMM E620) except that the pieces each weighed less than one
pound, and if the applicable Bound Printed Matter Rates were less than
the applicable Standard Mail (A) rates, the mailer could presort them
as Standard Mail (A) flats and claim basic presorted Bound Printed
Matter rates. Under this example, if the pieces weighed four ounces and
the mailing was only for the local zone, the Bound Printed Matter rates
would be lower than the Presorted Standard Mail (A) rates. Therefore,
the mailer could claim local zone Bound Printed Matter rates if: (1)
the pieces are presorted according the Presorted Standard Mail (A)
requirements to 5-digit, 3-digit, ADC, and Mixed ADC (that are similar
to the presort requirements for presorted Bound Printed Matter), (2)
the pieces are marked ``Presorted'' or ``Presorted Standard'' and
``Bound Printed Matter,'' and (3) documentation is submitted to
substantiate that the pieces qualified for the local zone rate.
(3) Elimination of Single-Piece Rates. Currently, Standard Mail (A)
single-piece rates apply to pieces that cannot meet the separate
minimum volume requirement of 200 pieces for a Presorted Standard
mailing either because the mailing job itself contains fewer than 200
pieces or because after preparing an Enhanced Carrier Route and/or
automation mailing the pieces remaining in the mailing job are fewer
than 200. Other instances where single-piece rates currently apply
include mailers using MLOCRs to prepare the mail who may have pieces
remaining in a mailing job that could not be matched to a 5-digit ZIP
Code, or mailers who choose not to hand-sort handwritten pieces that
could not be barcoded and sorted by a MLOCR. The single-piece Standard
Mail (A) rate is eliminated. Mailers will now have three options
concerning preparation and payment for mailing pieces that formerly
were paid at the single-piece Standard Mail (A) rates.
Option one applies to pieces that remain in a mailing job after a
mailer has prepared an Enhanced Carrier Route and/or an automation
mailing. A new provision in DMM E630.1.1 and 1.2 will allow pieces in
an Enhanced Carrier Route rate mailing and/or in an automation rate
mailing that have each separately met a 200-piece or 50-pound minimum
quantity requirement to be counted toward the minimum quantity
requirement for a Presorted Standard (\3/5\ and basic rate) mailing,
provided that (1) the Enhanced Carrier Route rate mailing and/or the
automation mailing, and the Presorted Standard mailing are part of the
same mailing job, and (2) the mailings are all reported on the same
postage statement. Under no circumstances may pieces mailed at the
Presorted Standard (nonautomation \3/5\ and basic) rates be counted
toward the minimum volume requirements for an Enhanced Carrier Route or
an automation rate mailing. The pieces mailed at the Presorted Standard
rates under this provision must meet all other requirements for those
rates, including the sortation and other preparation requirements in
M610. As prescribed in DMM M610.1.1e, the pieces mailed at the
Presorted Standard rates must not bear any Enhanced Carrier Route or
automation markings. Only ``Presorted Standard'' (or, until January 10,
2001, ``Bulk Rate''), ``Nonprofit Organization,'' or their applicable
authorized abbreviations may appear on pieces mailed at the Presorted
Standard rates.
Options two and three apply to mailings that cannot qualify for the
Presorted Standard Mail rates under the above provisions for residual
minimum volume. These might be mailings containing fewer than 200
pieces that cannot be reported on the same postage statement as other
mailings in the mailing job because the pieces have a different per
piece weight (because of different editions in the same job). They
could also be pieces remaining after sorting a mailing job that could
not be matched to a correct 5-digit ZIP Code, or pieces that could not
be barcoded and sorted by a MLOCR because they bear handwritten
addresses and the mailer chose not to hand-sort the pieces. In such
instances, mailers must pay single-piece First-Class Mail or Priority
Mail postage on the pieces.
Option two is for mailers of such pieces who desire to receive
First-Class or Priority Mail service (including forwarding and return
services) on such pieces as applicable, based on the weight of the
mailpieces. Under this option, mailers must re-envelope the pieces or
initially prepare them so that they bear only the proper First-Class
Mail or Priority Mail markings, ancillary service endorsements, ACS
codes, etc. These pieces must not bear Standard Mail (A) markings,
endorsements or ACS codes. This option will also be required for
metered mailpieces weighing over 13 ounces, but less than 16 ounces,
that cannot be mailed under option one.
Option three is for mailers who have pieces (other than metered
pieces weighing over 13 ounces, but less than 16 ounces) that cannot
qualify for the Presorted Standard Mail (A) rates, but that are
prepared as Standard Mail (A), and who do not desire to receive First-
Class Mail or Priority Mail service for those pieces. Under this option
the pieces may be submitted ``as is'' (i.e., bearing the Standard Mail
(A) markings

[[Page 37952]]

and endorsements). No additional markings or postage are to be added to
these pieces. Single-piece First-Class Mail or Priority Mail postage
must be paid for these pieces using the appropriate First-Class or
Priority Mail postage statement. Mail bearing metered or precanceled
stamp postage must pay the difference between the postage affixed at
the Standard Mail (A) rates and the single-piece First-Class Mail or
Priority Mail rates by means of an advance deposit account or by
affixing a meter strip for the appropriate amount to the postage
statement. Mail bearing permit imprints must pay the single-piece
First-Class or Priority Mail postage by completing the appropriate
First-Class or Priority Mail postage statement. If the pieces weigh 13
ounces or less, mailers must use special line items under Part C on the
reverse side of Form 3600-R, Postage Statement--First-Class Mail Permit
Imprint, or Form 3600-P, Postage Statement--First-Class Mail Postage
Affixed. The new line items on the postage statements appear under the
heading ``From Standard Mail (A).'' If the pieces weigh over 13 ounces
but less than 16 ounces, and are paid with permit imprint, Form 3600-
PM, Postage Statement--Priority Mail Permit Imprint, must be
appropriately completed to show that the pieces are from a Standard
Mail (A) mailing. Option 3 may be used for permit imprint mail only if
there are at least 200 pieces to be mailed under this option, or if the
pieces were part of a larger mailing job and are submitted for
acceptance along with the mail and a Standard Mail (A) postage
statement for the other pieces in the same mailing job.
d. Forwarding and Return. With two exceptions, charges for the
forwarding and return of Standard Mail (A) are paid at the First-Class
Mail rates for pieces weighing 13 ounces or less and at the Priority
Mail rates for pieces weighing over 13 ounces. This is because single-
piece Standard Mail (A) rates have been eliminated as discussed above.
The exceptions are (1) matter returned under Bulk Parcel Return Service
(BPRS) and (2) matter that qualifies for a single-piece Special
Standard Mail or Library Mail rate under DMM E630 and is endorsed to
show that forwarding and return is requested at one of those rates.

6. Standard Mail (B)

a. Rate Highlights
Some Parcel Post rates will decrease and many will increase, some
as much as 30%. New rate categories and discounts will be added to
Parcel Post as described in 6b below. On average, Bound Printed Matter
rates will increase 5%. The discount will increase for sorting Bound
Printed Matter to carrier route. Special Standard Mail rates will
decrease. Library Mail rates will be the same as Special Standard Mail
rates, resulting in a rate increase. The annual fees for destination
bulk mail center (DBMC) rates and presorted Special Standard Mail will
increase from $85.00 to $100.00. The fee for pickup service for Parcel
Post will increase from $4.95 to $8.25 per occurrence. (Pickup service
is not available for mailings claiming Parcel Post destination entry
rates or Origin Bulk Mail Center (OBMC Presort) Presort discounts.)
b. Rate Structure for All Standard Mail (B)
(1) Barcoded Discount. A discount of $0.03 per piece will apply to
machinable pieces in mailings meeting a 50-piece minimum quantity
requirement that bear a correct and properly prepared barcode
representing the 5-digit ZIP Code (or, for UCC/EAN Code 128, the ZIP+4
code) of the address on the mailpiece. Mail for each Standard Mail (B)
subclass (Parcel Post, Bound Printed Matter, Special Standard, and
Library Mail) must separately meet the 50-piece minimum volume
requirement.
The barcode specifications and clear zone requirements are in DMM
C850. UCC/EAN Code 128 as well as USS Code 128; USS Code I 2/5; and USS
Code 39 symbologies will be permitted until January 10, 2004. Beginning
January 10, 2004, only UCC/EAN Code 128 will be permitted. For all
barcode symbologies except UCC/EAN Code 128, the barcode must represent
the correct 5-digit ZIP Code of the address on the mailpiece followed
by the verifier character ``9.'' The UCC/EAN Code 128 barcode must
represent either the correct 5-digit ZIP Code or the ZIP+4 code for the
address on the mailpiece. For the UCC/EAN Code 128 barcode, the ZIP
Code information must be preceded by the Application Identifier ``420''
that signifies a domestic ZIP Code, and must not include the trailing
verifier character ``9'' used with the other barcode symbologies.
Mailers must print human-readable characters representing the numeric
equivalent of the ZIP Code information in the barcode (i.e., omitting
the verifier character or, for UCC/EAN Code 128, omitting the 3-digit
application identifier characters) preceded by the word ``ZIP'' near
the barcode. An exception is that the numeric equivalent of the ZIP
Code information in the barcode will not be required if the barcode is
on the same label as the address block and is placed in close proximity
to the address.
The barcoded discount reflects the savings for parcels that are
routinely processed individually on BMC parcel sorters equipped with
barcode readers. Therefore, the discount will not be available for
nonmachinable parcels and will not be available for parcels that are
intended to bypass individual BMC sortation. The barcoded discount will
therefore not be available for: (1) any nonmachinable parcel, (2)
Parcel Post mail entered at destination sectional center facility
(DSCF) rates, (3) Parcel Post mail entered at destination delivery unit
(DDU) rates; (4) Parcel Post DBMC rate mail entered at any auxiliary
service facility (ASF) other than the ASF at Phoenix, AZ (which has
barcode readers), (5) Bound Printed Matter at the Carrier Route rates,
and (6) Presorted Special Standard Mail at the 5-digit rate.
(2) Delivery Confirmation. A new delivery confirmation service will
be available for Standard Mail (B) in early 1999. See further details
under ``Special Services.''
c. Rate Structure for Parcel Post
(1) Presort Discounts for Inter-BMC Rates. A new Origin Bulk Mail
Center Presort (OBMC Presort) discount of $0.57 per piece will be
available for mail entered at a BMC that meets sortation criteria
specific for the type of parcel. Machinable parcels must be sorted to
BMCs and nonmachinable parcels must be sorted to BMCs and ASFs. A new
BMC Presort discount of $0.22 per piece will be available for pieces
that are sorted in the same manner as those qualifying for the OBMC
Presort discount (sorted to BMCs if machinable parcels or sorted to
BMCs and ASFs if nonmachinable parcels) and entered at any postal
facility other than a BMC that accepts bulk mailings. To qualify for
either of these rates, pieces must be part of a mailing of at least 50
pieces mailed at Parcel Post rates. See ``Mail Preparation'' below for
more details.
(2) Drop Shipment Rates. New destination delivery unit (DDU) rates
will be available for pieces entered at the delivery unit from which
the parcels are delivered. DDU rate pieces must be part of a mailing of
at least 50 pieces mailed at Parcel Post rates. New rates will also be
available for pieces entered at the destination sectional center
facility (DSCF). DSCF rate pieces must be part of a mailing of at least
50 pieces mailed at Parcel Post rates. DSCF rate pieces must be sorted
to 5-digit ZIP Codes as described under ``Mail Preparation'' below.
(3) Balloon Rate. Any item weighing less than 15 pounds and
measuring over 84 inches (but not more than 108

[[Page 37953]]

inches) in combined length and girth will be charged the applicable
Parcel Post rate for a 15-pound parcel.
(4) Oversized Pieces. Pieces in a Parcel Post mailing will be
permitted to measure over 108 inches, but not more than 130 inches, in
combined length and girth. These pieces will be charged new oversized
rates which are higher than the 70-pound rates.
d. Markings
(1) General. Currently, mailers are required to place subclass
markings ``Bound Printed Matter,'' ``Special Standard,'' and ``Library
Rate'' or ``Library Mail'' (or authorized abbreviations) on pieces
qualifying for those rates. However, the Domestic Mail Manual does not
clearly specify where on the mailpiece these markings must appear.
Effective January 10, 2000, the current required subclass markings
(``Bound Printed Matter,'' ``Special Standard,'' and ``Library Rate''
or ``Library Mail'') or their authorized abbreviations will be required
to be placed in the postage area on each mailpiece (i.e., be printed or
produced as part of, or directly below, or to the left of the permit
imprint indicia, meter stamp or impression, or adhesive or precanceled
stamp). The Postal Service prefers that mailers begin to do this as
soon as possible.
(2) Parcel Post Mail. Except for mail qualifying for drop shipment
rates, mailers will have until January 10, 2000, to place a ``Parcel
Post'' or ``PP'' rate marking in the postage area on all Parcel Post
Mail. Effective January 10, 1999, mailings qualifying for the new DSCF
and DDU drop shipment rates must bear the marking ``Drop Ship'' or its
abbreviation ``D/S'' and the marking ``Parcel Post'' or ``PP.'' The
``Parcel Post'' or ``PP'' marking must appear in the postage area
(printed or produced as part of, or directly below, or to the left of
the permit imprint or metered postage) and the marking ``Drop Ship'' or
``D/S'' must appear either in the postage area or in the line above or
two lines above the address as described in DMM M012. DBMC rate mail
will also be required to bear the ``Drop Ship'' and ``Parcel Post''
markings or authorized abbreviations according to these placement
rules. However, since DBMC rate mail is currently required to bear the
marking ``DBMC Parcel Post,'' the Postal Service is allowing mailers a
one-year grace period to convert to the new marking. From January 10,
1999, to January 10, 2000, DBMC rate mailers may use either ``DBMC
Parcel Post'' or ``Parcel Post'' and ``Drop Ship'' (or their applicable
abbreviations). Effective January 10, 2000, DBMC Parcel Post must bear
the new ``Parcel Post'' and ``Drop Ship'' markings, or their applicable
abbreviations.
Effective January 10, 1999, the Postal Service is eliminating the
requirement to show the 5-digit or 3-digit ZIP Code of the post office
of mailing in the drop shipment marking if the postage for the piece is
paid with a permit imprint and the office of mailing is in a different
3-digit ZIP Code area from the post office in the return address. The
requirement for a ``Bulk Rate'' marking also will be eliminated.
Mailpieces bearing the 3-digit ZIP Code of the office of mailing and
``Bulk Rate'' markings will be accepted until January 10, 2000.
(3) Bound Printed Matter. Effective January 10, 2000, the ``Bound
Printed Matter'' marking must appear in the postage area of single-
piece rate mail. Until January 10, 2000, the ``Bound Printed Matter''
marking may appear elsewhere on the mailpiece.
The marking ``Bulk Rate'' or ``Blk. Rt.'' will be changed to
``Presorted'' or ``PRSRT'' for bulk Bound Printed Matter mailings. The
marking ``Presorted Standard'' or ``PRSRT STD'' also will be
permissible. The ``Presorted'' or ``Presorted Standard'' portion of the
marking will be permitted to appear in either the postage area or in
the line above or two lines above the address. Mailers will be given
until January 10, 2000, to begin using the new markings. Between
January 10, 1999 and January 10, 2000, mailers may use either ``Bulk
Rate'' or ``Presorted'' or their respective authorized abbreviation. At
the mailer's option the ``Presorted'' marking may be used instead of
``Bulk Rate'' effective immediately. The name of the rate category also
is changing from bulk Bound Printed Matter to presorted Bound Printed
Matter. At the mailer's option the ``Presorted'' marking may be used
instead of ``Bulk Rate'' effective immediately. Between now and January
10, 2000, the marking ``Bound Printed Matter'' may appear either in the
postage area or in the line above or two lines above the address on
presorted Bound Printed Matter. Effective January 10, 2000, the ``Bound
Printed Matter'' marking on presorted Bound Printed Matter must appear
in the postage area.
For carrier route Bound Printed Matter, the need for the ``Bulk
Rate'' marking in addition to the ``Carrier Route Presort'' marking
will be eliminated effective January 10, 1999. Carrier route Bound
Printed Matter mailings must show ``Bound Printed Matter'' in the
postage area and ``Carrier Route Presort'' or ``CAR-RT SORT'' in the
postage area or in the line above or two lines above the address.
Mailers will be given until January 10, 2000, to place the ``Bound
Printed Matter'' marking in the postage area. Effective January 10,
1999, mailers will be permitted, but not required, to show the
``Presorted'' or ``PRSRT'' (or ``Presorted Standard'' or ``PRSRT STD'')
marking on carrier route Bound Printed Matter in addition to the
required ``Bound Printed Matter'' and ``Carrier Route Presort'' or
``CAR-RT SORT'' markings.
The ``Catalog'' or ``Catalog Rate'' marking will be eliminated for
Bound Printed Matter. Pieces bearing the ``Catalog'' or ``Catalog
Rate'' markings will be accepted until January 10, 2000.
(4) Special Standard. For Presorted Special Standard mail, the
``Presorted'' portion of the current marking will be permitted to be
abbreviated ``PRSRT'' and to appear either in the postage area or in
the line above or two lines above the address. Effective January 10,
2000, the ``Special Standard'' marking must be placed in the postage
area.
f. Mail Preparation--OBMC Presort Discount
To qualify for the Origin Bulk Mail Center Presort (OBMC Presort)
discount, a mailpiece must be part of a mailing of at least 50 Parcel
Post rate pieces. Pieces eligible for the OBMC Presort rate must be
entered at a BMC listed in DMM L601.
Machinable parcels at OBMC Presort rates must: (1) be sorted to
BMCs using DMM labeling list L601 and, (2) be prepared in 69-inch
pallet boxes placed on pallets, each labeled to a BMC and each
containing a minimum of 52 inches of mail. OBMC Presort machinable
parcels must not be prepared as parcels placed directly on pallets.
Overflow containers (pallets, pallet boxes on pallets, or sacks) are
not permitted.
Nonmachinable parcels at OBMC Presort rates must: (1) be sorted to
BMCs and ASFs using new DMM labeling list L605 and, (2) be placed
directly on pallets (no pallet boxes on pallets are allowed), each
labeled to a BMC or ASF and each pallet containing at least 42 inches
of mail. Overflow containers (pallets, pallet boxes on pallets, or
sacks) are not permitted.
Pallets and pallet boxes also must meet the provisions of M041. The
minimum height of mail in a pallet box on a pallet (machinable parcels)
or of mail placed directly on a pallet (nonmachinable parcels) is
measured from the top of the pallet to the top of the lowest mailpiece
(i.e., excludes the height of the pallet).

[[Page 37954]]

g. Mail Preparation--BMC Presort Discount
To qualify for the BMC Presort discount, a piece must meet the same
rules for sorting machinable parcels to BMCs and nonmachinable parcels
to BMCs and ASFs as required for the OBMC Presort discount above. The
difference is that BMC Presort mail may be entered at any postal
facility (other than a BMC in DMM L601) that accepts bulk mailings.
h. Mail Preparation--DSCF Rate
To qualify for the DSCF rate, a piece must be part of a mailing of
at least 50 Parcel Post rate pieces and must be presorted to 5-digit
ZIP Code destinations. Pieces eligible for the DSCF rate must be
entered at an SCF listed in DMM L005 and must be for delivery within
the service area of the entry SCF. For palletized mail only, certain 5-
digit ZIP Codes listed in DMM Exhibit E652.5.0 must be entered at the
BMC facility serving the SCF.
To qualify for the DSCF rates the pieces must be presorted and
labeled to 5-digit sacks or 5-digit pallets (including pallet boxes on
pallets). Machinable and nonmachinable parcels may be combined in the
same sack or on the same pallet (or same pallet box on a pallet) to
meet the minimum sortation requirements. If sacked, each 5-digit sack
must contain a minimum of 7 pieces, except that one overflow sack per
5-digit ZIP Code that contains fewer than 7 pieces is allowed. If
palletized, each 5-digit pallet (including pallet boxes on pallets) in
the mailing must meet one of the following basic minimum preparation
requirements: (1) contain at least 50 pieces and 250 pounds of mail, or
(2) contain at least 36 inches of mail (height of mail excluding
pallet). Overflow from a full 5-digit pallet may be placed in 5-digit
sacks or may be palletized. If the overflow is placed in a 5-digit sack
it will be eligible for the DSCF rates. If the overflow is placed on a
5-digit pallet it is subject to the DBMC rates. Pallets prepared under
the piece and pound minimum and pallets prepared under the minimum
height requirement may both be combined in a single mailing. Sacked
mail and mail palletized according to either of the minimum quantity
options listed above also may be included in the same mailing, provided
that at the time of verification the mailer separates sacks that are
overflow from the palletized portion of the mailing from sacks that
were prepared under the provisions for sacking mail.
If mailers can provide certain documentation, they also may prepare
a mailing exclusively under the following alternate pallet preparation
option. The minimum number of pieces on a 5-digit pallet (including a
pallet box on a pallet) may be 35 pieces and 200 pounds provided that
within the mailing the average number of DSCF pieces per 5-digit pallet
is at least 50. To substantiate that no pallet contains less than 35
pieces and 200 pounds and that the average number of DSCF pieces per 5-
digit pallet in the mailing is at least 50 pieces, mailers must submit
documentation that lists each pallet in sequential order by pallet
identification number. For each 5-digit pallet containing mail claimed
at the DSCF rates the documentation must show: the unique pallet
identification number, the 5-digit ZIP Code of the pallet, the total
weight of pieces on the pallet, the total number of pieces on the
pallet, and the cumulative total of pieces (i.e., the number of pieces
on that pallet plus the sum of the pieces on all 5-digit pallets
qualifying for the DSCF rates listed before it). Under this alternate
pallet option, overflow from a full 5-digit pallet may be placed in 5-
digit sacks or may be palletized. If the overflow is placed in a 5-
digit sack, it will be eligible for the DSCF rates. If the overflow is
placed on a 5-digit pallet, it is subject to the DBMC rates. Mailers
using this 50-piece average-per-pallet alternative must exclude pieces
that are prepared as overflow under any of the foregoing methods
(sacked or palletized) from the computation (documentation) that the
50-piece per pallet average is met.
For any palletization option, mailers may place parcels directly on
pallets or in pallet boxes on pallets. If pallet boxes are used they
must not exceed 60 inches in height and must otherwise meet the
provisions for pallet boxes in DMM M041. All pallets must meet the
provisions of DMM M041.
Under any palletization option, the following additional
requirements or restrictions also apply. Currently, many BMCs transport
mail for certain 5-digit ZIP Code areas directly to the 5-digit
associate post office. A list of these 5-digit areas is found in DMM
Exhibit E652.5.0. Five-digit pallets prepared for the DSCF rate for the
5-digit ZIP Codes listed in this exhibit must be entered at the BMC,
not at the SCF, to qualify for the DSCF rate. This will avoid
additional handling and transportation of this mail at the affected
SCFs. However, sacked mail for the 5-digit ZIP Codes listed in Exhibit
E652.5.0 must always be entered at the SCF (not at the BMC). There is
one exception to this rule provided for in DMM E652.1.3. This rule
allows a mailer to request from the Area Manager, Operations Support,
an exception to the requirement to drop palletized mail for the ZIP
Codes in Exhibit E652.5 at the BMC. Such exceptions must be requested
at least 15 days in advance and may only be granted for a limited time.
In addition, there are certain associate post offices that cannot
handle pallets. A list of these facilities is found in the Drop
Shipment Product currently available from the National Customer Support
Center (NCSC) in Memphis, TN (1-800-238-3150). For these 5-digit ZIP
Codes, the DSCF rate will be available only for mail that can be
prepared in 5-digit sacks as described above (i.e., the DSCF rate will
not be available for palletized mail for 5-digit delivery units that
cannot handle pallets).
In instances where the Drop Shipment Product shows that mail for a
single 5-digit ZIP Code area is delivered from more than one facility,
the facility listed in the Drop Shipment Product that delivers mail to
the majority of city carrier routes will be considered the delivery
unit for parcel post. Two exhibits, Exhibits E652.6.0 and E652.7.0 that
contain exceptions to the ``majority of city carriers'' rule, are also
added to the DMM. If a 5-digit ZIP Code is listed in DMM Exhibit
E652.6.0 or E652.7.0, the facility listed in one of those exhibits must
be used to determine the name of the delivery unit. The name of the
delivery unit must then be looked up in the Drop Shipment Product to
determine if mail for it, and therefore mail for the 5-digit ZIP Code,
can be prepared on pallets to qualify for the DSCF rate. At some point
in the future the information in these two exhibits will be
incorporated in the Drop Shipment Product.
Nonmachinable outside (NMO) parcels by definition cannot be
prepared in sacks because they will not fit in a sack. Therefore, NMOs
must be prepared directly on pallets or in pallet boxes on pallets as
described above to qualify for the DSCF rates. If overflow pallets are
prepared, the pieces on such pallets are subject to the DBMC rates. The
DSCF rate is not available for NMOs at those facilities listed in the
Drop Shipment Product, and Exhibits E652.6.0 and E652.7.0, as unable to
handle palletized mail.
The Postal Service will unload palletized loads for DSCF rate mail.
Mailers must unload sacked and bedloaded mailings. A provision has been
added to allow mailers to prepare 5-digit sacks qualifying for the DSCF
rate on SCF pallets. Such SCF pallets have no minimum pallet weight and
may be prepared without having to first prepare all possible 5-digit
pallets. A

[[Page 37955]]

special pallet label is prescribed for this mail in M045.12.
Except for local mailings, appointments for dropping any Standard
Mail (B) at an SCF must be scheduled through the appropriate district
control center (see DMM E652).
i. Mail Preparation--DDU Rate
To qualify for the DDU rate, a piece must be part of a mailing of
at least 50 Parcel Post rate pieces. Pieces eligible for the DDU rate
must be entered at the postal facility where the carrier who delivers
the parcel is located. A list of these facilities and their telephone
numbers are in the Drop Shipment Product currently available from the
National Customer Support Center (NCSC) in Memphis, TN, 1-800-238-3150.
In instances where the Drop Shipment Product shows that a 5-digit area
is served by more than one facility, the facility that delivers mail to
the majority of city carrier routes should be used for purposes of
determining where to enter a destination delivery unit mailing.
Exceptions to that general rule are those ZIP Codes listed in DMM
Exhibit E652.6.0 and in Exhibit E652.7.0. If a ZIP Code appears in DMM
Exhibit E652.6.0 or Exhibit E652.7.0, the mail must be entered at the
delivery unit listed in the exhibit for that ZIP Code.
There are no specific sortation requirements for the DDU rates
other than the requirement that mail must be separated by 5-digit ZIP
Code when unloaded at a DDU facility. Mailers may choose to sack or
palletize DDU rate pieces. If so, there are no minimum sack or pallet
requirements but the sack or pallet must be labeled as a 5-digit sack
or pallet. Mailers may present mail to the DDU prepared in pallet boxes
on pallets provided the pallet boxes do not exceed 60 inches in height
and otherwise meet the provisions of M041. The Drop Shipment Product
and DMM Exhibits E652.6.0 and E652.7.0 may be used to determine which
postal facilities can handle pallets. If the facility cannot handle a
pallet, and mail is transported to the facility on pallets, the mailer
must unload the mail from pallets into a container as specified by the
delivery unit.
The mailer will be responsible for unloading all DDU loads (even if
palletized). If palletized and the pallets are stacked, the mailer will
be responsible for unloading, unstacking, and removing the strapping
material from the pallets. Appointments for entry must be made by
contacting the DDU at least one day in advance. Mailers desiring
electronic confirmation of DDU mail entry also must schedule the
appointment through the district control center. Standing appointments
may be made if shipment frequency is weekly or more frequently. The
grace period for late arrivals will be 20 minutes.
j. Destination Entry Mail Preparation--Plant-Verified Drop Shipment
(PVDS)
Pieces must be part of a mailing of at least 50 Parcel Post rate
pieces to qualify for DDU, DSCF, and DBMC rates and to qualify for OBMC
Presort, BMC Presort, and barcoded discounts. When Parcel Post rate
pieces are submitted under PVDS procedures, mailers may use the total
of all line items for all destinations on a PVDS register or PVDS
postage statement to meet the minimum 50-piece volume requirement. This
means a mailer may enter fewer than 50 pieces at an individual
destination, provided there is a total of at least 50 Parcel Post rate
pieces for all of the entry points for that single mailing job listed
on the PVDS register or PVDS postage statement.
k. Bulk Parcel Post
Bulk Parcel Post is a ``shell'' classification of Standard Mail (B)
for which there are no separate rates prescribed. Current DMM E620.2.4e
states that ``the bulk Parcel Post rate is the rate applicable to each
piece in a bulk Parcel Post rate mailing at the single-piece rate or
DBMC rate for that zone for an item equal to the average weight per
piece for all parcels in the mailing to that zone, rounded up to the
next whole pound.'' This DMM section therefore establishes a method of
computing postage at Parcel Post rates. For mailings of identical
weight pieces, this averaging method is irrelevant, because the average
weight of all the pieces to a zone is always the weight of a single
piece. For mailings of nonidentical weight pieces, DMM E620.2.2b states
that this method of postage payment may be used only if authorized by
the rates and classification service center (RCSC) serving the post
office of mailing. The Postal Service is removing sections E620.2.2 and
E620.2.4e from the DMM. Postal Service Headquarters is not aware of any
mailer that is currently authorized to use this method of postage
payment. If in fact there are mailers using this method, they may
request that their RCSC issue an authorization for continuation of
their postage payment procedure as an alternate mailing system under
DMM P730. The Postal Service is implementing various new rates and
discounts for Parcel Post that could be considered ``bulk rates''
because they require a minimum volume of 50 pieces per mailing.
Therefore, removing references to ``Bulk Parcel Post'' rates in DMM
E620 will reduce confusion in the eligibility section for Parcel Post
rates in new DMM E630. As indicated above, the Postal Service also will
be removing the requirement to mark pieces with a ``Bulk Parcel Post''
rate marking. New DMM E630.6.0 is reserved for any future rates and
requirements for the Bulk Parcel Post classification.

7. Special Services

a. Address Correction
No changes will be made to address correction service fees. They
will remain at $0.50 for manual corrections and $0.20 for automated
(ACS) corrections, per notice issued.
b. Address Changes for Election Boards
No changes will be made to the fee. It will remain $0.17. See DMM
R900.10.3.
c. Business Reply Mail (BRM)
(1) Fees and Per-Piece Charges. The annual permit fee will increase
from $85.00 to $100.00, and the annual accounting fee will increase
from $205.00 to $300.00. For regular BRM, mailers will pay the
applicable First-Class Mail rates plus a per-piece charge. The per-
piece charge for regular BRM with an advance deposit account will
decrease from $0.10 to $0.08. The per-piece charge for regular BRM
without an advance deposit account will decrease from $0.44 to $0.30.
(2) Qualified Business Reply Mail. A new classification category
and rate structure will be added for qualified business reply mail
(QBRM) that must be letter-size, automation-compatible, and barcoded.
As a result, the BRMAS fee category will be eliminated. The First-Class
rate structure for QBRM includes a lower single-piece first-ounce rate
of postage of $0.30 for letters and $0.18 for cards. The fee structure
requires an annual BRM permit fee, an annual BRM accounting fee, and
for each piece returned a $0.05 per-piece BRM charge.
(3) Mailpiece Design and Barcoding Requirements. Mailpiece design
and barcoding requirements will be revised for both regular BRM and
QBRM. Regular BRM pieces that bear a barcode and QBRM pieces that bear
a barcode will be required to meet the automation letter mailpiece
design requirements in DMM C810 (except C810.7.1) and the barcoding
standards in C840 so that there are uniform requirements for all mail
that is processed on barcode sorters.
For barcoded and nonbarcoded BRM, references to mailpiece design

[[Page 37956]]

requirements in DMM C810 and C830 will replace current BRM standards
relative to reflectance requirements, paper weight, tabs and self-
mailers. This will add basis weight, tabbing, and other requirements
for all self-mailers. It is likely that self-mailers will be processed
on automated equipment. Meeting these requirements will ensure their
ability to be processed without damage. QBRM and other barcoded
mailpieces must meet all the mailpiece design requirements in C810
except the requirement in C810.7.1. The basis weight requirement for
envelopes in C810.7.1 will not apply to BRM. BRM envelopes, including
QBRM, must continue to meet the current minimum paper basis weight of
20 pounds (measured using 500 sheets of 17- by 22-inch paper). In
addition, the standard in current S922.6.4 that envelope material must
not have a phosphorescence exceeding 4.0 phosphor meter units is
retained and corrected to state that envelope material must not have a
red fluorescence exceeding 4.0 phosphor meter units. Mailers will have
until January 10, 2001, to comply with the requirement in DMM C810.2.1c
that Qualified Business Reply Mail pieces and other BRM pieces that
bear a barcode and measure more than 4\1/4\ inches by 6 inches meet a
minimum thickness requirement of .009 inch.
Mailers currently have the option of preparing pieces with lower
right barcodes according to the standards in C840. They also currently
have the option of preparing the pieces so that the left boundary of
the barcode clear zone and of a lower right barcode window is \1/4\
inch closer to the right edge of the mailpiece than required under
C840, and to place the leftmost bar of a lower right barcode \1/4\ inch
closer to the right edge of the mailpiece than required under C840. The
revised standards will no longer permit mailers to use the option that
does not meet the DMM C840 requirements. However, mailers will be given
until January 10, 2001, to use existing stocks of such prebarcoded BRM
envelopes and cards that: (1) Have a barcode clear zone with a left
boundary that is 4\1/2\ inches from the right edge of the piece (not
4\3/4\ inches as required in C840); (2) have a lower right barcode for
which the leftmost bar is located between 3\1/4\ and 4 inches from the
right edge of the piece (not between 3\1/2\ and 4\1/4\ inches as
required under C840); (3) have a lower right barcode window, that has a
left boundary measuring 4\1/2\ inches from the right edge of the piece
(not 4\3/4\ inches as required under C840).
The revised standards also will allow a company logo to appear
beneath the delivery address line of a prebarcoded BRM or QBRM
mailpiece, provided the logo is placed no lower than \5/8\ inch from
the bottom edge of the mailpiece and does not interfere with the
barcode clear zone.
d. Carrier Sequencing of Address Cards
The fee will increase from $0.17 to $0.20. See DMM R900.1.0.
e. Certificate of Mailing
The fees will increase. See DMM R900.4.0.
f. Certified Mail
The fee will increase from $1.35 to $1.40. See DMM R900.5.0.
g. Collect on Delivery (COD)
COD fees will increase. See DMM R900.6.0. The standards in DMM S921
will also be revised to remove references to the availability of COD
with single-piece Standard Mail (A).
h. Correction of Mailing Lists
The per-correction fee will be increased from $0.17 to $0.20 and
the minimum per-list fee is increased from $5.50 to $7.00. See DMM
R900.10.1.
i. Delivery Confirmation
A new delivery confirmation service will be available for Priority
Mail and Standard Mail (B) in early 1999. This service, when available,
will provide the mailer with information about the date of delivery or
attempted delivery. This service will be available in two forms: (1) an
electronic option for mailers who apply identifying barcodes to each
piece, provide an electronic manifest, and retrieve confirmation
information electronically; and (2) a retail (manual) option for which
delivery information will be available through a USPS Internet address
or a toll-free number. Signature (electronic return receipt) service
also will be available in early 1999.
j. Express Mail Insurance
The fees for merchandise insured for $500.01 to $5,000.00 will
increase. See DMM R900.8.0.
k. Insured Mail
The fees for insurance service will increase. See DMM R900.9.0. The
DMM provisions in S913 will be revised to delete the applicability of
insurance to single-piece Standard Mail (A). Since single-piece
Standard Mail (A) will be eliminated, mail that was formerly mailed at
those rates will be subject to single-piece First-Class Mail or
Priority Mail rates as applicable for the weight of the mailpiece.
Because First-Class Mail and Priority Mail may be insured, mailpieces
formerly mailed at single-piece Standard Mail (A) rates will retain
their eligibility for insurance when mailed at First-Class Mail or
Priority Mail rates.
In addition, a bulk insurance service discount of $0.40 per piece
is introduced. To be eligible for the bulk insurance service discount,
mailers must (1) enter mailings of insured articles under an approved
manifest mailing system agreement, (2) mail a minimum of 10,000 insured
articles annually (a total of all insured articles mailed at multiple
locations), (3) provide a hard copy of Form 3877, Firm Mailing Book for
Accountable Mail, or facsimile and (4) provide a copy of Form 3877 on a
diskette or other electronic medium. Mailers must submit an application
for bulk insurance to their local postmaster or designee. The local
postmaster or designee will approve or deny the application. Authorized
mailers will be provided instructions for filing claims under the bulk
insurance service by the local postmaster or designee. When systems
that electronically capture information on accountable mail are
completed and programming changes that will tie the St. Louis ASC into
these systems are completed, mailers will be required to file claims
electronically using a new (soft) electronic format for the Form 3877.
When or before these changes and systems are completed, bulk insurance
mailers will be provided with instructions for a new format for the
electronic Form 3877 and with instructions for electronically filing
claims.
l. Merchandise Return Service
The annual permit fee will increase from $85.00 to $100.00. The
charge per returned mailpiece remains at $0.30. Revisions are made to
the postage that is applicable to pieces returned that weigh less than
16 ounces and to the marking requirements that specify the return rate
of postage. These changes will be necessary because of the elimination
of single-piece Standard Mail (A) rates. Matter bearing a merchandise
return label without a preprinted rate marking will be returned at: (1)
the Parcel Post rate if it weighs 16 ounces or more, (2) the Priority
Mail rates if it weighs over 13 ounces but less than 16 ounces, and (3)
the First-Class Mail rates if it weighs 13 ounces or less. If the
permit holder desires matter to be returned the Special Standard, or
Library Mail rates, the permit holder will be required to preprint the
appropriate rate marking on the label. If the permit holder desires
matter

[[Page 37957]]

weighing 13 ounces or less or matter weighing 16 ounces or more to be
mailed at the Priority Mail rates, the mailer will be required to
preprint the Priority Mail marking on the merchandise return label. It
is recommended but not required that matter to be returned at the
First-Class Mail, Priority Mail, or Parcel Post rates bear the
applicable preprinted marking ``First-Class'' or ``First-Class Mail,''
``Priority Mail,'' or ``Parcel Post'' (or ``PP'').
m. Money Orders
The fee for domestic money orders will be reduced from $0.85 to
$0.80. The fee for a postal military money order will remain at $0.30
and the inquiry fee will remain at $2.75.
n. On-Site Meter Settings
There will be increases to two of the on-site meter setting fees.
The fee for an additional meter setting will increase from $3.25 to
$4.00, and the fee for checking a meter in and out of service will
increase from $7.50 to $8.50. No increases will be made to the
scheduled appointment setting fee for the first meter ($27.00) or to
the unscheduled or emergency setting fee for the first meter ($31.00).
o. Parcel Airlift
There will be no changes to parcel airlift fees ($0.40 for up to
two pounds, $0.75 for over two up to three pounds, $1.15 for over three
up to four pounds, and $1.55 for over four pounds).
p. Permit Imprint
The application fee for permit imprints will increase from $85.00
to $100.00.
q. Post Office Boxes, Caller Service, and Reserve Call Numbers
Post office box fees (except the $0 fee for all box sizes in Group
E) will increase. Fees for caller service and reserve call numbers also
will increase (see R900.3.0 and DMM R900.16.0).
r. Registered Mail
The maximum value level for registered mail without postal
insurance will be decreased from $100.00 to $0.00. All registered mail
with a value of $0.01 or more will be automatically provided with
insurance (up to a maximum indemnity of $25,000 per piece). Insurance
coverage is included in the applicable registered mail fee. Only mail
of no value may be mailed as uninsured registered mail. In addition,
registered mail fees will increase (see DMM R900.18.0).
s. Restricted Delivery
The restricted delivery fee will not change (it remains $2.75).
t. Return Receipt
Fees for return receipt will increase from $1.10 to $1.25 when
requested at time of delivery and from $6.60 to $7.00 when requested
after mailing.
u. Return Receipt for Merchandise
The fee for return receipt for merchandise will increase from $1.20
to $1.40, and the fee for a delivery record will increase from $6.60 to
$7.00. DMM S917 will be revised to delete the availability of this
service with single-piece Standard Mail (A), because single-piece
Standard Mail (A) will be eliminated.
v. Special Handling
There will be no change to the fees for special handling ($5.40 for
matter weighing not more than 10 pounds and $7.50 for matter weighing
more than 10 pounds). In addition, DMM S930.1 will be revised to
conform to the Domestic Mail Classification Schedule (DMCS) by making
it clear that special handling may be used with First-Class Mail and
Priority Mail.
w. Stamped Cards
A $0.01 fee per stamped card and a $0.02 fee per double stamped
card will be added to cover manufacturing and printing costs. A fee of
$0.40 will be added to the price of a sheet of 40 stamped cards. This
is consistent with the existing fee structure for stamped envelopes,
where customers are charged postage plus a small fee for the envelope
itself.
x. Stamped Envelopes
The fees for some stamped envelopes will increase and others will
decrease. In addition, the fee structure will be simplified: except for
hologram stamped envelopes, all stamped envelopes will be grouped
together by size and whether they are plain or printed.
y. ZIP Coding of Mailing Lists
Fees will increase from $60.00 to $70.00 per 1,000 addresses or
fraction thereof.

C. Summary of Comments From the March 16, 1998, Proposed Rule

The Postal Service received 32 pieces of correspondence offering
comments on the March 16, 1998, proposed rule. Respondents included
five major mailer associations; 24 publishers, printers, and mailers;
and three individuals.
The specific points raised in the comments are presented below,
organized by general comments and then by class of mail and special
service.

1. General Comments

Three comments were received concerning the implementation date of
the new rates, fees, and classifications. Each commenter indicated that
the implementation date should allow time for mailers to make software
changes. Suggested dates ranged from 90 days to 8 months after the
Board of Governors' decision. The implementation date for Docket No.
R97-1 is determined by the Board of Governors of the Postal Service and
is outside the scope of this rulemaking process. Postal management did
however, consider these comments when it provided advice to the Board
of Governors concerning the effective dates.
Various comments also were received that requested changes to rates
and fees. One commenter requested that the revised rates not apply to
his company for two to five years. These comments are beyond the scope
of this rulemaking. The rates, rate structure, and basic standards for
rates in Docket No. R97-1 were subject to litigation before the Postal
Rate Commission and cannot be revised unilaterally by the Postal
Service in a rulemaking process.
Three commenters requested that a single item not be subject to
both a hazardous medical materials and an other hazardous materials
surcharge. As the PRC did not recommend the proposed hazardous
materials surcharges, these comments will not be addressed.
One commenter indicated that the Postal Service should re-solicit
comments for any items that were affected by the PRC decision. Because
the Postal Service cannot revise rates and DMCS language that is
recommended by the PRC and approved by the Governors of the Postal
Service, it does not believe that soliciting comments on such items
would have any value.

2. Priority Mail

One commenter requested clarification as to whether Priority Mail
must always bear the ``Priority Mail'' marking. This commenter further
asked whether the ``Priority Mail'' marking will delay the mail when
deposited in an overnight First-Class Mail area and, if so, could such
mail pieces be marked ``First-Class'' instead of ``Priority Mail.''
Priority Mail must always bear the marking ``Priority Mail'' or
``Priority.'' This marking is used to ensure that mail is placed in and
processed through the Priority Mail network and to collect cost

[[Page 37958]]

and revenue data through the Postal Service's statistical sampling
systems. Deployment of the Priority Mail Processing Center (PMPC)
network has affected overnight service standards for some ZIP Codes.
While the vast majority of service standard changes have resulted in
improved service, there are, as the commenter suggests, a small number
of 5-digit ZIP Code areas that may experience two-day service instead
of overnight. However, the Postal Service does not plan to waive the
marking requirement for pieces mailed in such 5-digit ZIP Code areas.

3. First-Class Mail

Two commenters requested that the Prepaid Reply Mail proposal
should not be implemented because of administrative complexity and
costs to the mailer. For other reasons, the Governors did not approve
Prepaid Reply Mail.
One commenter supported the provision allowing ``Presorted'' to be
abbreviated ``PRSRT'' when used in the ``Presorted First-Class''
marking. Another commenter was concerned that it appeared the revised
DMM M012.2.1a required single-piece First-Class Mail to bear a ``First-
Class'' marking. The Postal Service has revised DMM M012 to make it
clear that single-piece First-Class Mail is not required to bear a rate
marking.

4. Periodicals

Two commenters suggested that for clarity, proposed DMM E230.3.0b
and E230.4.0b concerning eligibility for 5-digit and 3-digit presort
rates be revised to indicate that 5-digit and 3-digit packages of 6 or
more pieces may be palletized under M045 to obtain the 5-digit and 3-
digit presort rates. The Postal Service has adopted this suggestion.
Two commenters suggested that the forwarding rules table in DMM
F010.5.2g should be clarified so it does not appear that use of ACS
will always result in the return of the mailpiece. One of these
commenters suggested that it would be clearer if the entire chart in
this DMM section had been reproduced so that it was clear that footnote
1 stating ``Valid for all pieces, including Address Change Service
(ACS) participating pieces'' also applied to pieces that bear no
endorsement. When Periodicals pieces bear no endorsement, after 60 days
or, if the piece is undeliverable, a separate address correction or
reason for nondelivery is provided, the address correction fee is
charged (the automated fee if ACS service is used), and the piece is
disposed of by the Postal Service. The entire chart in DMM F010.5.2g is
reproduced in this final rule to make it clear that this policy has not
changed.
One commenter indicated that it appeared the Postal Service intends
to revise current rules in DMM F010.6.1 to require that Periodicals
mail with a nonincidental First-Class attachment be returned to the
mailer. The Postal Service revisions to DMM F010.6.1 in both the
proposed and this final rule revise only the rate of postage at which
such pieces are returned from the single-piece Standard Mail (A) rate
to the First-Class or Priority Mail rate as applicable for the weight
of the piece. Postal Service policy for some years has provided that
Periodicals pieces with nonincidental First-Class Mail attachments be
returned. However, Periodicals pieces with incidental First-Class Mail
attachments, as defined in DMM M070.5.0, are treated as dead mail
unless endorsed ``Address Service Requested.'' To avoid confusion, in
Part D of this final rule, the Postal Service has published DMM
F010.6.1 in its entirety to show the treatment of incidental First-
Class attachments as well as treatment of nonincidental First-Class
attachments.
One commenter indicated that the current interpretation of
``mailing'' for Periodicals allows mailers to treat and report mail for
different rate categories, including automation mail, carrier route
mail, and other non-automation mail, as one ``mailing.'' This commenter
asked if the proposed definition of a mailing in DMM M011.1.4 would
require that a separate mailing statement be prepared for each rate
category of Periodicals mail. The DMM currently does not allow
preparation of automation, carrier route, and other non-automation mail
in a single ``mailing.'' Separate presort and eligibility requirements
are prescribed for each of these rate categories. However, each of
these rate categories are permitted to be reported on a single postage
statement for a single publication and edition. To clarify that the
current practice continues to be permitted, a new section DMM M011.1.4d
has been added concerning ``mailings'' of Periodicals.

5. Standard Mail (A)

Five commenters indicated their support for allowing pieces in an
Enhanced Carrier Route rate mailing and/or in an automation rate
mailing that have each separately met a 200-piece or 50-pound minimum
quantity requirement to be counted toward the minimum quantity
requirement for a Presorted Standard (\3/5\ and basic rate) mailing,
provided that (1) the Enhanced Carrier Route rate mailing and/or the
automation mailing and the Presorted Standard mailing are part of the
same mailing job, and (2) the mailings are all reported on the same
postage statement.
One commenter asked what DMM section E612.4.6 means. DMM E612.4.6
contains provisions that allow Standard Mail (A) matter weighing less
than 16 ounces to pay Standard Mail (B) rates if those rates are lower
than Standard Mail (A) rates and the matter and the mailing could
qualify for the Standard Mail (B) rate except for weight. For example,
suppose a mailer had flat-size printed matter pieces that met all of
the qualifications for Bound Printed Matter except that the pieces each
weighed 4 ounces and therefore did not meet the requirement of weighing
at least one pound. In such an instance the mailer could presort the
pieces as Standard Mail (A) flats and claim basic presorted Bound
Printed Matter rates if those rates were less than the applicable
Standard Mail (A) rates. The mailer could presort the pieces according
to the Presorted Standard Mail (A) requirements to 5-digit, 3-digit,
ADC, and mixed ADC, which are similar to the presort requirements for
presorted Bound Printed Matter, and claim the local zone Bound Printed
Matter rates provided the mailer marked the pieces ``Presorted'' or
``Presorted Standard'' and ``Bound Printed Matter'' and submitted
documentation to substantiate that the pieces qualified for the local
zone rate.
One commenter requested that the Postal Service not apply the
residual shape surcharge to Enhanced Carrier Route rate merchandise
samples prepared with detached labels. The Postal Rate Commission
recommended and the Governors of the Postal Service approved a residual
shape surcharge for Enhanced Carrier Route mail. Since these provisions
are in the Domestic Mail Classification Schedule to take effect January
10, 1999, the Postal Service cannot unilaterally change these
provisions. Therefore, merchandise samples at the Enhanced Carrier
Route rates will be subject to the residual shape surcharge.
One commenter requested that the Postal Service revise the rule
placed into effect under Classification Reform that allows mail whose
size meets both the letter-size requirements and the automation flats
requirements to be prepared as flats on pallets if a portion of the
mailing qualifies for automation flats and if palletized mail at the
Presorted Standard rates is limited to 10% of the total palletized
mail. This rule further requires that mail unable to be palletized
either due to density or because it exceeded the 10% limit be prepared
as a separate letter-size mailing. This issue is not related to the

[[Page 37959]]

implementation rules for the Docket No. R97-1 rate case and will not be
revised as a part of this rulemaking process. However, this matter has
been brought to the attention of the Presort Optimization working group
of the Mailers Technical Advisory Committee.
One commenter indicated that on occasion he will have a mailing
that is set up as Standard Mail (A) (i.e., bears Standard Mail (A) rate
markings and pre-printed endorsements for Change Service Requested
using ACS) and subsequently discover that a particular mailing list has
fewer than 200 names. Such a mailing would not qualify for Standard
Mail (A) rates, and would be subject to single-piece First-Class Mail
rates, unless it could meet the revised volume requirements under DMM
E620.1.2. This commenter indicated that he could cover the bulk rate
indicias with First-Class stamps, but that the ACS participant code on
the mailpieces would be that assigned for Standard Mail (A), not First-
Class. This commenter accordingly asked if changes could be made to the
Centralized Forwarding System (CFS) to handle this, and if not, asked
how could it be mailed. The CFS system cannot be modified to handle
such instances. It would be unlikely that a postal employee would be
able to tell that such a mailpiece was modified from a Standard Mail
(A) mailpiece if a stamp is covering the bulk rate indicia.
Furthermore, if mailers added ``single-piece'' or ``single-piece First-
Class'' markings to such mailpieces it would be difficult and time
consuming to have carriers search all undeliverable mailpieces for such
markings in order to forward them to CFS sites, and then for CFS
employees to notice the markings and respond accordingly. Two options
have been added to the DMM for payment at First-Class or Priority Mail
rates for such pieces and for pieces that for other reasons are subject
to the appropriate First-Class Mail or Priority Mail rates. Mailers who
desire to receive First-Class Mail or Priority Mail service on
mailpieces subject to those rates must re-envelope or otherwise prepare
the mailpieces so that they bear only the proper First-Class Mail or
Priority Mail rate markings, ancillary service endorsements, Address
Change Service (ACS) codes, etc. Metered pieces weighing over 13 ounces
and less than 16 ounces must always be prepared under this method.
Except for metered pieces weighing over 13 ounces and less than 16
ounces, mailers who do not desire to receive First-Class Mail or
Priority Mail service on such pieces may submit them ``as is'' (i.e.,
bearing the Standard Mail (A) markings and endorsements). No additional
markings or postage are to be added to these pieces. First-Class Mail
or Priority Mail postage must be paid for these pieces using the
appropriate First-Class or Priority Mail postage statement. Except for
metered pieces weighing over 13 ounces and less than 16 ounces, mail
bearing metered or precanceled stamp postage must pay the difference
between the postage affixed and the First-Class Mail or Priority Mail
rates by means of an advance deposit account or by affixing a meter
strip for the appropriate amount to the First-Class postage statement.
If the pieces weigh 13 ounces or less, mailers must use special line
items on the new First-Class postage statements under the heading
``From Standard Mail (A)'' to record the pieces mailed. This option may
be used for fewer than 200 pieces of permit imprint mail only if the
pieces were part of a larger mailing job and are submitted for
acceptance along with the mail and a Standard Mail (A) postage
statement for the other pieces in the same mailing job.
One commenter was concerned that the revised definition of a
mailing in DMM M011.1.4d(6) seemed to preclude his company's current
practice of co-mailing Nonprofit and Regular rate mail. This section
has been renumbered as M011.1.4e(6) in this final rule. This section
begins with the phrase ``Except as provided by standard,'' which means
that other rules in the DMM may permit practices that entail combining
or copalletizing such pieces. For clarity the following sentence was
added to this section in the final rule. ``See M041.6.0, M045.5.0,
M045.7.0, and M200.6.0 for copalletized, combined, or mixed-rate level
mailings.'' Accordingly, if a mailer is currently authorized to combine
or copalletize Nonprofit and Regular rate mail, he or she may continue
to do so after the new rates and mailing definitions are effective.
Two commenters supported the change in the Standard Mail (A) rate
marking for Regular rate mailings from ``Bulk Rate'' to ``Presorted
Standard.'' Two commenters indicated that the ``Presorted Standard''
marking should be optional. These two commenters indicated that they
would prefer to use the new marking on their advertising mail but do
not wish to use it on fulfillment parcels because it will be costly to
revise the current cartons. One of these commenters indicated that if
the marking is not made optional, there should be a transition period
of at least two years for mailers to convert to the new marking. For
simplicity in its statistical sampling systems, the Postal Service will
not allow both markings to be used indefinitely. However, mailers will
be given two years to convert their regular rate Presorted, regular
rate automation, and regular rate Enhanced Carrier Route mailings to
the new ``Presorted Standard'' marking or its authorized abbreviation
``PRSRT STD.'' Until January 10, 2001, either the ``Bulk Rate'' or the
``Presorted Standard'' marking or authorized abbreviation will be
accepted.
Five commenters requested that the proposed ``RSS'' marking for
pieces subject to the residual shape surcharge be eliminated. Four of
these commenters indicated the marking uses too much space on a
mailpiece, one indicated that it detracts visually from the mailpiece,
two did not see the purpose of it, and one indicated it would require
additional labor for the shipper. One commenter was a mailer
association, who indicated it would be impossible for some of its
mailers to predict which pieces would need the marking. One such mailer
has pieces that could be considered either flat-size or a machinable
parcel and decides which way to prepare the mail based on the density
of orders received. Only machinable parcel mailings would need to bear
the marking. Another such mailer indicated they cannot predict the
final size of the product shipped ahead of time. For example, multiple
pieces ordered could be sent as one or more pieces each having a
different shape. Based on the comments received, the Postal Service has
determined to not require the use of an ``RSS'' marking.

6. Standard Mail (B)

a. General
There were 10 commenters among the 32 submitting comments to the
Postal Service whose statements concerned Standard Mail B topics. Of
the 10, seven were private firms, including three parcel consolidators,
and three were parcel shipper associations. Their comments concentrated
mainly on the following subject areas: barcoded discount, destination
mailings at the sectional center and delivery unit levels; new bulk
mail center presort (BMC Presort) and origin bulk mail center presort
(OBMC Presort) discounts; 10% limitation on oversized parcels; criteria
for machinability and nonmachinability; combined mailings of Standard
Mail (A) and Standard Mail (B) parcels; and vehicle unloading
requirements.
In addition to receiving comments as part of the formal rulemaking
process, the Postal Service has had extensive ongoing exchanges of
viewpoints with representatives of the parcel shipping industry. This
cooperative effort has led

[[Page 37960]]

to the development of revised standards that the Postal Service
believes strikes a better balance between the interests of mailers and
their concerns about qualifying for the most advantageous postage rate
discounts at the lowest possible mailing costs and the needs of the
Postal Service for providing high-quality service, containing costs,
and optimizing operational efficiency. Significant revisions have been
made in the proposed standards, especially as they relate to mail
preparation requirements for the new destination sectional center and
delivery unit discount rates.
Several other issues unrelated to the R97-1 rate case emerged and
are not addressed in the final standard. These issues concern extension
of the destination bulk mail center rates (DBMC) to Alaska, Hawaii, and
Puerto Rico, new criteria for parcel machinability or nonmachinability,
and updated definitions of ``perishable'' and ``nonperishable'' parcels
that take into account improved packaging and containerization. They
will be reviewed separately by the Postal Service in the future and any
changes to existing standards will be handled through separate
rulemaking procedures.
b. Parcel Barcodes
Two commenters indicated that they would support a barcode
certification process, and that this process should be published at
least 60 days prior to rate availability. In lieu of a barcode
certification process, the Postal Service is looking at methods to
verify the quality of barcodes during the verification process using
commercially available barcode verification equipment.
One commenter indicated that the barcoded discount should be
available for pieces processed at any postal facility that is automated
to use the ZIP Code barcode for sorting, including ASFs that now or in
the future have barcode scanning capabilities. The Postal Service has
determined that the Phoenix, Arizona, ASF has barcode scanning
capabilities. Accordingly, the Postal Service has revised the standards
for eligibility for the barcoded discount for Parcel Post mail to
include machinable parcels eligible for the DBMC rate that are entered
at the Phoenix ASF.
One commenter raised a question about the need for having human-
readable characters representing the 5-digit barcode appear on a
mailpiece's address label since it duplicates information already
provided in the address and takes up limited label space. Having the
human-readable ZIP Code appear as part of the barcode printing process
immediately below the barcode is useful in determining that the correct
barcode was applied to the mailpiece, particularly if the barcode is
applied in a process separate from applying the address. Since
generally the ZIP Code in the address block is used in the process of
applying an address block barcode, the Postal Service has decided to
revise the standard. Therefore, the numeric equivalent of the barcode
will not be required to appear immediately below the barcode when the
barcode is printed as part of the address block (on the same label as
the mailing address and in close proximity to that address). However,
if the barcode label is produced separately from the address label, the
human readable ZIP Code information must be included. This decision
will give mailers some flexibility in how they prepare their address
labels while still meeting postal concerns about having barcodes that
are correct for the addresses on the parcels.
Another commenter raised several questions about the technical
specifications included in the proposed rule. Clarification was
requested for the average measured narrow element (bar or space) width.
The average measured narrow element is the barcode X-dimension that
typifies the arithmetic mean of the barcode narrow elements. A minimum
clear or quiet zone equal to 10 times the average measured narrow
element (bar or space) width must be maintained on either side of a
barcode as defined in ANSI X3.182-1990.
A second question was whether mailers and their suppliers would
have to start measuring barcode spaces and bar widths more
scientifically to determine what dimension is appropriate for the clear
space surrounding parcel barcodes on either side. The Postal Service is
confident that mailers will be able to determine the average narrow
element widths and barcode quality by using commercially available
barcode verification equipment.
A related question had to do with how the Postal Service would
administer this specification. The Postal Service is looking at methods
to verify the quality of barcodes during verification by using
commercially available barcode verifiers to measure barcode parameters.
Another question concerned the basis for requiring a minimum clear
zone equal to 10 times the average measured narrow element (bar or
space) width on either side of the barcode. The advantage to the Postal
Service for using a minimum clear zone of 10 times the average narrow
element width is to ensure the reliable reading of barcodes on
currently deployed postal equipment. The quiet zone specification for
the barcode symbologies in question is defined in the AIM/USS symbol
specification. Additionally, manufacturers of barcode readers advise
that a minimum clear zone of 10 times the average narrow element width
enhances barcode readability.
This commenter also asked why the \1/8\-inch dimension could not be
used. The reason is that \1/8\ inch is less than 10 times the average
narrow element width for the minimally defined narrow element width of
13 mils, and, therefore, not in compliance with the AIM/USS symbology
specification and the ANSI print code quality guidelines (ANSI X3.182-
1990). Another question from this same commenter concerned whether the
proposed measurement would allow greater room for shifting of the piece
under the barcode reader on the parcel sorter machines. The proposed
clear zone specification is the minimum acceptable standard as provided
in the ANSI print code quality guidelines of ANSI X3.182-1990.
c. Oversized Parcels
The Postal Service had included in the proposed rule provisions for
mailing oversized parcels (parcels exceeding 108 inches but not more
than 130 inches in combined length and girth) at the rates equal to a
70-pound parcel for the applicable zone provided they constituted no
more than 10% of the total pieces in a mailing. Two commenters
questioned the 10% limit. The PRC's recommended decision included zoned
rates for such oversized pieces that are higher than the 70-pound
rates. The PRC did not recommend a 10% limit on such pieces but
recommended higher rates. Since the Governors of the Postal Service
approved this provision of the PRC's recommended decision, the final
DMM standards do not include a 10% limit on such oversized pieces.
d. DSCF Rate Mailings
Nine of the 10 Standard Mail (B) commenters had comments about the
proposed standards for destination sectional center facility (DSCF) and
delivery unit (DDU) rate mailings. Three parcel consolidation shipping
companies submitted comments favoring more flexible, less restrictive
requirements. In general, the comments favored lower minimum volumes
for rate eligibility than those proposed by the Postal Service,
optional entry points, and greater flexibility in the preparation
requirements so mailers could choose to

[[Page 37961]]

prepare pieces directly on pallets, in pallet boxes on pallets, or in
sacks.
One commenter proposed that the Postal Service eliminate the use of
sacks for the DSCF rate. This commenter believed that eliminating sacks
as an option would avoid additional handlings of sacks at postal
facilities. This commenter also indicated that very few parcel mailers
would be able to place 10 parcels in a single sack and that this
minimum could effectively eliminate sacked mail. Five other commenters
also thought the proposed sack minimum of 10 pieces was too high and
said it would discourage DSCF mailings. While several commenters
proposed adopting minimums that would utilize sack volume and weight
factors, these factors are not included as part of the costing
determinations for the rate. The critical cost determinant for the rate
is the number of pieces per handling. In the final DMM standards the
minimum number of pieces per sack has been reduced from 10 to seven.
The decision to reduce the minimum to seven pieces is being made with
the expectation that an average of 10 pieces per sack will be achieved
to support the worksharing discount. In addition, the final DMM
standards allow for one overflow sack per 5-digit destination that may
contain fewer than seven pieces.
Six commenters sought to eliminate the provision prohibiting
overflow pallets. One commenter said that since overflow trays of
letters are permitted, overflow pallets of parcels also should be
allowed. This argument is not persuasive because the cost of handling a
pallet is much greater than the cost of handling a tray. It costs as
much to handle a less-than-full pallet as it does a full one. However,
the standard has been modified in this final rule to accommodate
overflow from pallets. Provisions have been added to the DMM standards
that allow overflow from 5-digit pallets to be placed in 5-digit sacks.
Overflow sacks will have no minimum piece requirement and the pieces in
overflow sacks will be eligible for the DSCF rates. The Postal Service
also has added provisions that will allow a mailer to present to a DSCF
overflow 5-digit pallets (that by definition do not meet the pallet
minimums for the DSCF rate) provided the DBMC rates are paid for the
pieces on such overflow pallets.
Five commenters expressed concern over the 5-digit pallet minimums
specified in the proposed rule. In setting the minimum specified in the
proposed rule, the Postal Service was guided by per-piece handling
costs and concerns that a reduction in the average number of pieces per
handling resulting in higher costs, would adversely affect the
viability of the rate. Small volume pallets would increase handling
costs and also would take more cube space on transportation. While
suggesting differing alternatives to the Postal Service proposal, these
five commenters were in agreement that the requirement of a minimum of
50 pieces and 250 pounds per pallet was too high. To resolve their
concerns and those of the Postal Service about piece handling and
transportation costs, the Postal Service has added a new option for
preparing 5-digit pallets to qualify for the DSCF rate. Under the new
option, pallets may be prepared that contain as few as 35 pieces and
200 pounds of mail provided the total number of pallets prepared for
the DSCF rate in the mailing average at least 50 pieces per pallet.
Under this new option, no other pallet preparation or sack option may
be used within a single mailing. Mailers will be required to submit
detailed documentation and place sequential identification numbers on
qualifying pallets of DSCF rate mail. The documentation must list each
pallet in sequential order by pallet identification number. The listing
must show for each pallet: the pallet identification number, the 5-
digit ZIP Code of the pallet, the total weight of pieces on the pallet,
the total number of pieces on the pallet, and the cumulative total of
pieces (i.e., the number equal to the number of pieces for that pallet
plus the sum of the pieces on all pallets listed above it). This
documentation must not include pieces prepared in overflow sacks at the
DSCF rate, pieces prepared on overflow pallets at the DBMC rates, or
pieces claimed at any other rate in the mailing.
The requirement for BMC entry of DSCF rate mailings prepared on
pallets to ZIP Codes listed in Exhibit E652.5.0 has been retained. The
BMC provides direct transportation to the 5-digit facilities
represented by the listed 5-digit ZIP Codes, thereby allowing certain
quantities of mail to bypass the affected SCFs. The Postal Service
believes that there is a need for palletized mail for the 5-digit ZIP
Codes listed on Exhibit E652.5.0 to continue to bypass the affected
SCFs because of the potentially limited capabilities of those SCF
facilities. Three commenters said that they would like to have an
option to enter DSCF rate mailings either at a BMC or an SCF. To
support this position, one commenter contended that the same dock
procedures for handling 5-digit containers are followed at the SCF as
are followed at the BMC and that the distance from the SCF to a 5-digit
facility would be less than from the BMC. The Postal Service disagrees.
BMCs do not currently sort sacks to 5-digits or cross-dock 5-digit
sacks. They are shipped to the SCF in 3-digit containers and are re-
worked to 5-digits at the SCF, thus adding handlings. Further, granting
an option on a blanket basis is likely to worsen the problems
experienced by some sectional center facilities in accommodating
palletized mailings due to limited dock space, restricted vehicle
maneuvering area, and other constraints. Recognizing that requiring BMC
entry may present certain difficulties for mailers, the Postal Service
has amended the proposed standard to allow exceptions on a case by case
basis. A mailer may submit a written request to the appropriate Area
Manager, Operation Support asking for an exception to Exhibit E652.5.0.
The exception request must be submitted at least 15 days prior to the
mailing and may be granted only for a limited time.
The proposed standard specified that palletized DSCF rate mailings
must be entered at the appropriate BMC listed in Exhibit E652.5.0. and
sacked mailings must be entered at an SCF. Two commenters objected to
these requirements. Since the requirement is consistent with the
costing and worksharing assumptions that underlie the rate, it has been
left unchanged. The rate assumes no handling of sacks at BMCs. Some
mailers who were claiming the DBMC rate will benefit because now they
can get a DSCF rate when dropping at a BMC.
A parcel consolidator also stated that the DSCF rate should be
allowed for mail prepared on pallets for 5-digit facilities that are
not capable of handling pallets according to the Drop Shipment Product.
The requirements as written allow the Postal Service to recoup the cost
savings passed on to the mailer in the lower DSCF rate. These cost
savings will not be realized if the SCF facility receives a 5-digit
pallet for a 5-digit facility that cannot handle pallets. The SCF would
need to manually unload the parcels off of the mailer-prepared 5-digit
pallet and place them into another type of 5-digit container before the
SCF could transport the parcels to that 5-digit facility. Accordingly,
the DMM standards will not be revised to allow the DSCF rate for mail
prepared on pallets for 5-digit facilities that are not capable of
handling pallets.
Six commenters requested reconsideration of the prohibition against
use of pallet boxes on pallets. After further evaluation, the Postal
Service decided to allow the use of

[[Page 37962]]

mailer-supplied pallet boxes that measure up to a maximum of 60 inches
in height, except in the case of facilities unable to handle pallets.
There is no minimum height requirement for the pallet box as long as
the appropriate piece and pound minimum requirement or the 36-inches of
mail minimum requirement are met for each pallet. One commenter also
asked to be allowed to double-stack pallet boxes on pallets. The
proposed standard has been revised to permit double stacking. Just as
pallets are not allowed at the DSCF rate for those 5-digit destinations
listed in the Drop Shipment Product as unable to handle pallets, pallet
boxes on pallets will not be allowed for those same offices.
e. DDU Rate Mailings
The proposed standard did not allow the use of pallet boxes for DDU
rate mailings. Four commenters felt that pallet boxes should be
allowed. The Postal Service agrees that they may be used and that
mailers will need to supply them. If a mailer chooses to do so, they
may be double-stacked. As with DDU mailings that are bedloaded or
sacked or prepared as parcels placed directly on pallets, the vehicle
driver is required to unload the pallet boxes and place them at a
designated location at the delivery unit. If they are double-stacked,
the driver must remove them from the vehicle, unstack them, and then
remove any strapping material. At DDU facilities listed in the Drop
Shipment Product as being unable to handle pallets, mail that has been
placed directly on pallets or in pallet boxes on pallets must be off-
loaded by the vehicle driver from the pallet or pallet box into other
containers specified by the delivery unit.
Two commenters stated that Standard Mail (A) pieces should be
counted towards the minimum volume required for the DDU rate. However,
eligibility for the DDU rate category, as with each of the other
destination rate categories for Parcel Post, has a fixed minimum volume
requirement of 50 pieces of Parcel Post mail. This requirement is in
the Domestic Mail Classification Schedule (DMCS) and cannot be
unilaterally modified by the Postal Service.
One commenter asked whether a separation would be required beyond a
5-digit destination to be eligible for the DDU rate. The Postal Service
requires a 5-digit separation only. However, if more than one 5-digit
ZIP Code is served by a delivery unit, the mailer must separate the
pieces by 5-digit ZIP Code when entered at the DDU.
Another commenter wanted to bedload parcels entered at DDUs.
Mailings may be bedloaded, placed directly on pallets, or placed in
pallet boxes on pallets, if the facility can handle them. Since the DDU
rate is based on worksharing factors that do not include unloading by
Postal Service employees, the requirement for vehicle drivers to unload
all DDU rate mailings is retained.
f. OBMC Presort and BMC Presort Rate Mailings
Three commenters questioned why it is required that machinable
parcels be placed in pallet boxes on pallets and why they could not be
placed directly on pallets. In addition, three commenters wanted to use
pallet boxes for both machinable parcels and nonmachinable parcels. The
proposed standard has been left unchanged. The cost savings underlying
the discount for machinable parcels assumes that machinable parcels are
placed in pallet boxes that can be dumped by tipping the box onto the
parcel sorting equipment instead of having to manually unload
individual pieces from a pallet. A pallet box is placed at an incoming
door of a BMC where there is a dumping operation. Nonmachinable parcels
must be placed directly on pallets because they are worked at separate
locations within a BMC. They are not dumped onto a parcel sorting
machine since they are not machinable. These nonmachinable pieces are
sorted manually. It is safer and more efficient to manually remove such
pieces from pallets when they are placed directly on the pallet rather
than in a pallet box.
One commenter indicated that the proposed documentation for the BMC
Presort and OBMC Presort discounts that requires a listing of the
number of pieces on each individual BMC pallet was too onerous. The
commenter suggested that a lis

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A98-18271. Public record. Not legal advice.