Priority Mail Global Guaranteed

POSTAL SERVICE

39 CFR Part 20

Priority Mail Global Guaranteed

AGENCY: Postal Service.

ACTION: Amendment to interim rule.

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SUMMARY: On April 19, 1999, the Postal Service announced in the Federal

Register (62 FR 19039-19042) the introduction of Priority Mail Global

Guaranteed on an interim basis and requested comment from the public.

Comments were received until May 19, 1999. The Postal Service is

amending the interim rule to increase the number of acceptance

locations and destination countries and territories. All other

conditions of service, including rates, remain the same. Additionally,

the Postal Service is responding to the public comments.

EFFECTIVE DATE: November 1, 1999. Comments on the amendment to the

interim rule must be received on or before December 6, 1999.

ADDRESSES: Written comments should be mailed or delivered to the

Manager, International Finance, International Business, U.S. Postal

Service, 475 L'Enfant Plaza SW, Room 370-IBU, Washington, DC 20260-

6500. Copies of all written comments will be available for public

inspection between 9 a.m. and 4 p.m., Monday through Friday, in

International Business, 10th Floor, 901 D Street SW, Washington, DC.

FOR FURTHER INFORMATION CONTACT: Walter J. Grandjean, (202) 314-7256.

SUPPLEMENTARY INFORMATION: On April 19, 1999, the Postal Service

announced in the Federal Register (62 FR 19039-19042) the introduction

of Priority Mail Global Guaranteed on an interim basis and requested

comment from the public.

The U.S. Postal Service, through an alliance with DHL Worldwide

Express Inc., is offering an enhanced expedited service, Priority Mail

Global Guaranteed, from selected locations in the United States to

selected countries. This service offers day-certain delivery with

postage refund guarantee and document reconstruction coverage of $100

for allowable contents. Comments were requested by May 19, 1999.

By that date the Postal Service received comments from one company,

United Parcel Service (UPS), concerning the interim rule. UPS

challenged the service in two areas. First, UPS argued that the Postal

Service-DHL contract pursuant to which the service is provided appears

to be an unauthorized transaction that is contrary to law. Second, UPS

asserts that the rates for Priority Mail Global Guaranteed may be below

cost, in violation of the Postal Reorganization Act.

UPS states that the arrangement with DHL provides for the air

transportation of mail. UPS asserts that this is a contract for air

transportation services and that such a contract must comply with 39

U.S.C. 5402, which requires that contracts be filed with the Secretary

of Transportation, that contracts be for at least 750 pounds of mail

per flight, and that mail transported under contract consist of not

more than 5 percent letter mail by weight. UPS's premise for these

comments, that there is a contract between the Postal Service and DHL

for the transportation of PMGG, is not correct. No such contract has

been made. PMGG items are tendered to DHL as an air carrier authorized

to transport mail by its certificate of public convenience and

necessity in the same manner as mail is tendered to other certificated

air carriers. The rates of compensation for the international air

transportation service performed by DHL are as prescribed by the

Secretary of Transportation under section 41901(b). As there is no

contract for air carriage, there is no basis for UPS's comments in this

respect.

UPS asserts that the rates for Priority Mail Global Guaranteed may

be below

[[Page 60107]]

cost, in violation of the Postal Reorganization Act. The basis for this

assertion is that the rates for Priority Mail Global Guaranteed are

alleged to be as much as 65 percent lower than the published rates

charged by courier companies for comparable services and lower than the

rates charged by DHL for comparable service. UPS further asserts that

the rates for other USPS delivery services are below cost, and that

this also is grounds for suspecting that the rates for Priority Mail

Global Guaranteed are below cost. UPS does not, however, provide any

tangible evidence that the revenues from Priority Mail Global

Guaranteed do not cover costs.

In general, rates for postal services should cover costs over some

relevant period of time. The rates for Priority Mail Global Guaranteed

were designed to do that, based on the unique costs of that service.

Nothing in UPS's comments provides any basis for changing the Postal

Service's conclusion that the rates for Priority Mail Global Guaranteed

cover its costs. The prices courier companies charge for their services

are not probative evidence that rates for Priority Mail Global

Guaranteed are non-compensatory, since courier prices are based on the

costs incurred by those companies and on their perceptions of what

their users are willing to pay for the service provided. Similarly, the

prices charged by DHL for the services it provides by itself are not a

reliable guide to what Priority Mail Global Guaranteed rates should be,

nor do they provide any probative evidence that Priority Mail Global

Guaranteed rates do not cover costs. The costs DHL incurs in its own

services are not the same as the costs the Postal Service incurs in

performing similar functions in providing Priority Mail Global

Guaranteed. Finally, the allegation that the rates for some other

Postal Service offerings do not produce revenues that cover costs does

not provide any evidence that the rates for Priority Mail Global

Guaranteed do not produce revenues that cover costs. The rates for each

Postal Service offering are based on the costs incurred in providing

that particular offering and that offering alone. In each case, Postal

Service offerings are priced to produce revenues greater than costs,

although in rare cases unforeseen circumstances or events can produce

results that might not be as projected. In any event, UPS has provided

no information that would cause the Postal Service to change its view

that the rates developed for Priority Mail Global Guaranteed will

produce revenues greater than costs.

The Postal Service is not adopting a final rule at this time. The

Postal Service is amending the interim rule to increase the number of

metropolitan areas that can accept Priority Mail Global Guaranteed and

the number of destinations to which it may be sent. This is an

expansion of origins and destinations only, and all other conditions of

service remain the same.

Service will be available from the following ZIP Code areas:

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Metropolitan area ZIP code

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Arizona: Phoenix....................... 850, 852-853.

California:

Los Angeles, Oakland, San Francisco/ 900, 902-908, 910-918, 926-928,

San Jose. 937, 939-941, 943-944, 946,

949-951, 954.

Colorado: Denver....................... 802.

Connecticut: Stamford.................. 060-069.

Delaware: Wilmington................... 197-199.

District of Columbia................... 200, 202-203, 205.

Florida:

Fort Lauderdale, Jacksonville, 320, 322, 327-338, 342, 346-

Miami, Orlando, Tampa. 347.

Georgia: Atlanta....................... 300-303, 305-306, 311.

Illinois: Chicago...................... 600-608, 610-611, 620, 622,

629.

Indiana: Indianapolis.................. 460-470, 472-475, 478-479.

Kentucky: Newport...................... 410, 452.

Maine: Portland........................ 039-041.

Maryland: Baltimore.................... 206-212, 214, 217, 219.

Massachusetts: Boston.................. 010-027.

Michigan:

Detroit, Grand Rapids.............. 481-482, 486-491, 493-497, 530-

531.

Minnesota:

Minneapolis, Saint Paul............ 550-551, 553-554, 558-559.

Missouri: St. Louis.................... 630-631, 633.

New Hampshire: Manchester.............. 030-034, 038.

New Jersey:

Jersey City, Newark................ 070-085, 087-089.

New York:

Flushing, New York City............ 100-101, 103-105, 107, 109-119,

124-127.

North Carolina:

Charlotte, Greensboro, Raleigh..... 270-278, 280-282, 286.

Ohio:

Akron, Cincinnati, Cleveland, 430-438, 440-458.

Columbus, Dayton, Toledo,

Youngstown.

Pennsylvania: Philadelphia............. 189-191, 193-196.

Rhode Island: Providence............... 028-029.

Tennessee: Nashville................... 372.

Texas:

Dallas, Fort Worth, Houston, 750-752, 760-764, 769-770, 772-

Lubbock, San Antonio. 778, 780-782, 784, 791, 794.

Virginia: Richmond..................... 201, 220-225, 230-232, 238-239.

Vermont: Burlington.................... 054, 056.

Washington: Seattle.................... 980-982.

Wisconsin: Milwaukee................... 530-532, 534.

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[[Page 60108]]

Service will be available to the following countries and

territories:

Anguilla, Antigua and Barbuda, Aruba, Australia, Austria,

Bahamas, Barbados, Belgium, Bermuda, British Virgin Islands, Canada,

Cayman Islands, Denmark, Dominica, Dominican Republic, Finland,

France (includes Monaco), Germany, Gibraltar, Great Britain and

Northern Ireland (includes Guernsey and Jersey), Greece, Grenada,

Guadeloupe (includes St. Barthelemey), Haiti, Hong Kong, Indonesia,

Ireland, Italy, Jamaica, Korea, Republic of (South Korea),

Liechtenstein, Luxembourg, Macao, Malaysia, Malta, Martinique,

Mexico, Montserrat, Netherlands, Netherlands Antilles (includes

Bonaire, Curacao, St. Eustatius, and St. Maarten), New Zealand,

Norway, Philippines, Portugal, Saint Christopher (St. Kitts) and

Nevis, Saint Lucia, Saint Vincent and the Grenadines, Singapore,

Spain (includes Canary Islands), Sweden, Switzerland, Taiwan,

Thailand, Trinidad and Tobago, Turks and Caicos Islands, and

Vietnam.

Although the Postal Service is exempted by 39 U.S.C. 410(a) from

the advance notice requirements of the Administrative Procedure Act

regarding proposed rulemaking (5 U.S.C. 553), the Postal Service

invites public comment on the amendment to the interim rule at the

above address.

The Postal Service is amending International Mail Manual Chapter 2,

Conditions for Mailing, which is incorporated by reference in the Code

of Federal Regulations. See 39 CFR 20.1.

A transmittal letter changing the relevant pages in the

International Mail Manual will be published and automatically

transmitted to all subscribers. Notice of issuance of the transmittal

will be published in the Federal Register as provided by 39 CFR 20.3.

List of Subjects in 39 CFR Part 20

Foreign relations, International postal service.

The Postal Service adopts the following amendments to the

International Mail Manual.

PART 20--[AMENDED]

1. The authority citation for 39 CFR Part 20 continues to read as

follows:

Authority: 5 U.S.C. 552(a); 39 U.S.C. 401, 404, 407, 408.

2. Chapter 2 of the International Mail Manual is amended as

follows:

2 Conditions for Mailing

* * * * *

210 Express Mail International Service

* * * * *

215 Priority Mail Global Guaranteed

* * * * *

215.3 Service Areas

215.31 Origins

Priority Mail Global Guaranteed service is available only from the

following ZIP Code areas:

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

Metropolitan area ZIP code

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

Arizona: Phoenix....................... 850, 852-853.

California:

Los Angeles, Oakland, San Francisco/ 900, 902-908, 910-918, 926-928,

San Jose. 937, 939-941, 943-944, 946,

949-951, 954.

Colorado: Denver....................... 802.

Connecticut: Stamford.................. 060-069.

Delaware: Wilmington................... 197-199.

District of Columbia................... 200, 202-203, 205.

Florida:

Fort Lauderdale, Jacksonville, 320, 322, 327-338, 342, 346-

Miami, Orlando, Tampa. 347.

Georgia: Atlanta....................... 300-303, 305-306, 311.

Illinois: Chicago...................... 600-608, 610-611, 620, 622,

629.

Indiana: Indianapolis.................. 460-470, 472-475, 478-479.

Kentucky: Newport...................... 410, 452.

Maine: Portland........................ 039-041.

Maryland: Baltimore.................... 206-212, 214, 217, 219.

Massachusetts: Boston.................. 010-027.

Michigan: Detroit, Grand Rapids........ 481-482, 486-491, 493-497, 530-

531.

Minnesota:

Minneapolis, Saint Paul............ 550-551, 553-554, 558-559.

Missouri: St. Louis.................... 630-631, 633.

New Hampshire: Manchester.............. 030-034, 038.

New Jersey: Jersey City Newark 070-085, 087-089.

Newark.............................

New York: Flushing, New York City...... 100-101, 103-105, 107, 109-119,

124-127.

North Carolina: Charlotte, Greensboro, 270-278, 280-282, 286.

Raleigh.........................

Ohio:

Akron, Cincinnati, Cleveland, 430-438, 440-458.

Columbus, Dayton, Toledo,

Youngstown.

Pennsylvania: Philadelphia............. 189-191, 193-196.

Rhode Island: Providence............... 028-029.

Tennessee: Nashville................... 372.

Texas:

Dallas, Fort Worth, Houston, 750-752, 760-764, 769-770, 772-

Lubbock, San Antonio. 778, 780-782, 784, 791, 794.

Virginia: 201, 220-225, 230-232, 238-239.

Richmond..............................

..........

Vermont: Burlington.................... 054, 056.

Washington: 980-982.

Seattle...............................

........

Wisconsin: 530-532, 534.

Milwaukee.............................

...........

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[[Page 60109]]

215.32 Destinations

Priority Mail Global Guaranteed service is available only to the

following countries and territories:

Anguilla, Antigua and Barbuda, Aruba, Australia, Austria, Bahamas,

Barbados, Belgium, Bermuda, British Virgin Islands, Canada, Cayman

Islands, Denmark, Dominica, Dominican Republic, Finland, France

(includes Monaco), Germany, Gibraltar, Great Britain and Northern

Ireland (includes Guernsey and Jersey), Greece, Grenada, Guadeloupe

(includes St. Barthelemey), Haiti, Hong Kong, Indonesia, Ireland,

Italy, Jamaica, Korea, Republic of (South Korea), Liechtenstein,

Luxembourg, Macao, Malaysia, Malta, Martinique, Mexico, Montserrat,

Netherlands, Netherlands Antilles (includes Bonaire, Curacao, St.

Eustatius, and St. Maarten), New Zealand, Norway, Philippines,

Portugal, Saint Christopher (St. Kitts) and Nevis, Saint Lucia,

Saint Vincent and the Grenadines, Singapore, Spain (includes Canary

Islands), Sweden, Switzerland, Taiwan, Thailand, Trinidad and

Tobago, Turks and Caicos Islands, and Vietnam.

* * * * *

Stanley F. Mires,

Chief Counsel, Legislative.

[FR Doc. 99-28650 Filed 11-3-99; 8:45 am]

BILLING CODE 7710-12-P