BEFORE THE POSTAL RATE COMMISSION WASHINGTON. D.C. 20268-0001 RATE AND FEE CHANGES, 1997 Docket No. R97-1 TESTIMONY OF \ CARL G. DEGEN ON BEHALF OF THE UNITED STATES POSTAL SERVICE USPS-T-12 TABLE OF CONTENTS CONTENTS ...................................................................................................... i LIST OF TABLES ............................................................................................ ii SKETCH ................................................................... iii PURPOSE AND SCOPE.. ......................................................................... 1 AUTOBICIGRAPHICAL I. II. THE IN-OFFICE III. REVISIONS /- COST SYSTEM.. ............................................................ TO THE MAIL PROCESSING COMPONENT .l ....................... 3 USPS-T-12 /- TABLES Table 1 FY 1996 Estimated Costs and Associated Craft/Function Table 2 FY 1996 Clerks and Mailhandlers - Mail Processing, Estimated Costs and Associated Confidence Limits By Direct Cost Category (OLD methodology) Table 3 FY 1996 City Carriers - In-Office Direct Labor, Estimated Costs and Associated Confidence Limits By Direct Cost Category Table 4 FY 1996 Mail Processing Cost Pools and Variabilities Table 5 FY 1996 Distributed Volume-Variable methodology) Table 6 FY 1996 Clerks and Mailhandlers - Mail Processing, Estimated Costs and Associated Confidence Limits By Direct Cost Category (NEW methodology) ii Confidence Limits, By Cost by Cost P’ool and Subclass (NEW USPS-T-l 2 Direct Testimony of Carl G. Degen AUTOBIOGRAPHICAL I ,F- SKETCH I am Senior Vice President of Christensen My name is Carl G. Degen. 2 Associates, which is an economic research and consulting firm located in Madison, 3 Wisconsin. My education 4 University of Wisconsin-Parkside 5 Wisconsin-Madison. 6 exams for a Ph.D., but did not complete a dissertation. 7 worked as a teaching assistant for one year and a research assistant for two years. 6 1960 I joined Christensen 9 Economist 10 President., includes a B.S. in mathematics and economics from the and an MS. in economics from the University of I earned an MS. by completing the coursework Associates While a graduate student, I In as an Economist, and was promoted to Senior in 1990 and Vice President in 1992. In 1997 I becamle Senior ‘Vice Duiring my tenure at Christensen 11 and qualifying including productivity Associates I have worked on research 12 assignmelnts measurement in transportation industries and the 13 U.S. Postal Service. 14 number of clients. In R94-1, I gave testimony before the Postal IRate Commission 15 the reclassification of secondclass 16 MC951, I have also provided litigation support and ‘expert testimony for a in-county tallies for the In-Office Cost System. I gave direct testimony on letter bundle handling productivities makeup of First-Class presort mailings. on In and the I also gave rebuttal testimony on savings from automation, the demand for greeting cards, and analysis of quakfiers for the proposed Publications Service subclass. In MC96-2, I gave testimony reg:arding car-rections to USPS-T-12 1 Periodicals-CI,assroom unit costs, the associated 2 changes to the sampling system. standard errors, and possible USPS-T-12 1 I. 2 PURPOSE AND SCOPE My testimony focuses on the In-Office Cost System (IOCS), which is used to 3 estimate (costs for time spent by various types of employees 4 functions., 5 will explain the basic design of this statistical system and how the functional separation 6 and cost distribution 7 the method of cost distribution performing different The IOCS is also used to distribute some of these costs to class of mail. I are obtained. I will also explain changes that have been made to for mail processing, cost component 3.1. 8 9 I 10 II. THIE IN-OFFICE COST SYSTEM The Postal Service accounting systems cannot identify labor costs by subclass 11 of mail because employees 12 most operations. 13 sampling employees at randomly selected points in time. When an employee is 14 sampled, the activity of the employee at that point in time is recorded. 15 is handling mail when sampled, the data collector records information regarding the 16 type or types of mail being handled. 17 are simultaneously processing more than one! subclass in The IOCS is designed to supplement the accounting syistem data by If the employee The selection of employees to be sampled is based on a stratified sample within 18 Cost Ascertainment 19 independently: 20 messengers, Group (CAG)’ for each of five craft groups, which are sampled (1) clerks, (2) mailhandlers, (3) city carriers, (4) special delivery and (5) supervisors. ,/’ Some CA’G A offices are treated as CAG B. and BMCs are a separate gro~~p 1 USPS--T-l 2 1 When an employee’s activity is observed, data are entered directly into portable 2 microcomputers 3’ guides, handbooks, 4 software are contained 5 sample design are in Library Reference 6 under Computerized On-Site Data Entry System (CODES). other field operating instructions, in Library References Users and information on the CODES H-48 and H49. Details of the IOCS H-89. The results of the IOCS sampling are costs by function for each craft group. 7 Proportions of tallies are applied to labor costs by CAG from the accounting system to 8 obtain estimates of labor costs by craft and function. 9 limits for the estimates for FY 1996 by craft by function. 10 Table 1 shows the confidence For two of the functions shown in Table 1, the IOCS is also used to distribute 11 those costs to class of mail. The functions using IOCS distribution are: 12 (1) Mail Processing 13 offices, and (2) City Carriers In-Office Direct Labor. The distribution 14 follows the same method as distribution 15 cost totals by CAG and cost estimates are obtained by summing over CAGs. Tables 2 16 and 3 show the confidence limits for the cost distribution 17 functions. The rzlculation of the confidence 18 described in Library Reference H-146. and Window Service labor by Clerks and Mailhanidlers in CAG A-J to function. Proportions to subclass of mail of tallies are applied to to classes of mail and limits shown in Tables 1, 2 and 3 is USPS-T-12 1 2 .!- lil. REVISIONS TO THE MAIL PROCESSING COMPONENT (3.1) When an IOCS data collector is asked to sample a worker at a specific time, the 3 worker may or may not be handling mail. In some cases, the worker may be observed 4 handling a single piece of mail or a number of pieces which are identical except for the 5 delivery address. 6 sample outcome is referred to as a direct tally.’ 7 break, between handlings, or monitoring the operation of equipment. 8 worker is Ihandling mail, it may be a “container” or ‘item”’ with many kinds of mail in it. 9 These sample outcomes are referred to as not-handling-mail 10 The key thing is that a single subclass of maill is observed. Alternately, This the worker could be on Even when a and mixed-mail tallies, respectively. 11 12 13 Previous Methodoloqy In the mail processing cost distribution process used for previous proceedings, 14 tallies are assigned a dollar value by dividing total clerk and maulhandler 15 compensation4 16 CAG, the ,tally dollars are grouped into pools of direct tallies, mixed-mail tallies, and 17 not-handling-mail 18 because each direct tally is associated with a unique subclass. for a CAG by the number of tallies obtained for that CAG. Within each tallies. The direct tally dollars can be partitioned by subclass of mail 2 Additionally, the ‘top piece rule’ provides a procedure by which a single subclass is associated with the handling of a collection of non-identical mail. creating a direct tally. ’ In this context. ‘container refers to rolling stock such as APCs. OTRs. and hampers ‘Items’ include sacks of various colors. bundles, trays, and pallets. 4 Salary and benefits from the Pay Data System. 3 USPS-T-l 2 The mixed-mail tallies are separated into groups based on the subclasses and shapes of mail the data collector observes in the sampled container or item. For example, the most general group is all classes, all shapes. mixed-mail There are also det;aited categories for specific shapes and individual classes. When data collectors record a tally, they record the “basic function” being performed basecl on the mailstream involved. Mixed-mail costs are distributed and basic function. distributed The basic functions are outgoing, incoming, transit, and other. to subclass in proportion to direct costs within CAG Mixed-mail tallies associated with specific classes or shapes are to subclass in proportion to the appropriate subset of direct costs. f-or .- instance, a mixed-letters letters. tally is distributed to subclass using only direct tallies handling The mixed-mail distribution process is generally referred to as LIOCATT, for the name of the principal program used to accomplish the algorithm. costs plus distributed mixed-mail cost is the Mail Processing The sum of direct Direct Labor portion of cost componenlt 3.1. Most not-handling-mail overhead to mail processing handling-mail tallies represent activities which are considered and are classified as 100% volume variable. clollars are distributed to subclass in proportion Direct Labor costs. In the Cost Segments and Components reported as the Mail Processing activities, Overhead portion. in particular certain Platform acceptance These not- to the Mail Processing Report, tinese costls are Finally, some not-handling--mail activities, are classified as -. institutional. These costs are reported as the Mail Processing 4 Fixed portion. USPS-T-12 1 2 The methodology 3 clerks and mailhandlers 4 Postal Rate Commission in past cases. The criticisms generally fall into three areas: 5 1) the increase in not-handling-mail 6 mail costs, and 3) the assumption 7 are 100 percent volume variable.5 6 9 ,F-- described above for the estimation of Inail processing in CAG A-J offices has been criticized by intervsnors costs for and the tallies, 2) the methods used to distribute mixedthat mail processing direct labor and overhead costs In response to these criticisms, the Postal Service has revised the mail processing (component 3.1) cost methodology in three significant ways. First, the 10 hours data from the Management 11 the Pay Data System compensation 12 activities and machinery types. 13 refined by incorporating 14 distributions 15 estimates are developed for each of the pools. These revisions squarely address each 16 of the past criticisms listed above. 17 estimates of attributable cost. 16 /-- Revised Methodoloov Operating Data System (MODS)6 are used to partition totals into cost pools based on mail processing Second, the mixed-mail cost distributions have been IOCS data on container contents, and confining mixed-mail to direct tallies associated’with The new methodology the same cost pool.’ Third, variability I believe these revisions result in more accurate for component 3.1 begins with clerk and mailhandler ’ Note that certain mail processing costs have been classified as institutional and assigned to the “mail processing fixed” component of cast segment 3.1. See Library Reference H-.1. See USP,S-T-4 for a description of MODS. ’ The exception is Platfon mixed-mail costs. which are distributed on direct tallies in all allied operations. 5 USPS-T-12 1 compensation from the Pay Data System just as the old methodology 2 and mailhandler 3 which report to MODS (MODS offices), other CAG A-J offices (non4lODS ,4 BMCs. Costs for the MODS offices are further partitioned ,5 (LDC).’ 16 code totals. '7 related MODS operation codes. ;B operat,ion codes that are consistently 19 operation codeis were further aggregated compensation did. The clerk is divided first into totals for three office groups: offices offices), and by Labor Distributioln Code MODS workhours are then used to partition the LDC totals to MODS operation The cost pools for the MODS office group are defined as collections of The definition of the cost pools beg,an with ranges of defined at the national level.’ The groups of until they were large enough to have 10 sufficient tallies in each for estimation of a distribution 11 homogeneity 12 the mail processing, 1:3 oftice group does not correspond 184 codes”’ in the old methodology. I:5 mail processing The MODS-based of the operations.” administrative, key but preserved a meaningful partition of Segment 3 wsts into and window service components for the MiODS exactly to the partition based on IOCS operation That is, all activities of an employee clocked into a MODS operation are counted as part of that mail processing operation, a Labor Distribution Codes are used to aggregate hours and compensation into operational/functional groups. LDCs are generally associated with the National Workhour Reporting system. Each hnODS operation code is associated with an LDC. but represents a finer level of disaggreg,ation; see L.ibrary Reference H-146. ‘Within some ranges of operation codes. individual offices have some discretion over operation definitions. ” Examples of the cost pools are OCR operations, BCS operations, FSM operations, manual letters. and manual flats. The detailed mapping of MODS operation codes to u)st pools is contained in Library Reference H-146. ” For the clerk and mailhandler crafts, the IOCS operation codes identify certain mail prowsAng. administrative, and window service fundions at a relatively high level of aggregation. IOCS operation codes should not be confused with MODS operation codes. 6 USPS-T-12 :- /- ,- else. From the 1 even if the data collector observed the employee working somewhere 2 viewpoint of the old methodology, 3 have “migrated” between cost components. 4 main concern is identifying the activities actually performed by thle employees clocked 5 into the operations in a cost pool in order to ensure an accurate (distribution of those 6 costs. The compensation 7 into the mail processing, administrative, a dollar totals for the collections of IOCS operation codes that defined the components 9 the old methodology. some activities (as defined by IOCS) would appear to In the new methodology, totals for the BMC and non-MODS however, the groups are p,artitioned and window service components The BMC mail processing component using IOCS in is further subdivided into 10 cost pools for activities and machinery types using the distribution of IOCS dollars for 11 selected activity and machinery types, as identified in IOCS Quelstions 18 iand 19. l2 12 The mail processing component for the non-MODS group is partitioned 13 the four basic functions using IOCS costs. into pools for 14 The tallies from IOCS are assigned dollar values based on compensation 15 for their re,spective strata and cost pool. For the non-MODS offrc:e group, the cost pool 16 is simply the tally’s basic function. 17 th,ose used to partition the mail processing ia MODS offices are assigned to cost pools using the following criteria. The BMC cost pool assignments totals are identical to dollars into cost pools. Tallies taken at If the tally ‘2 Questions 18 8 19 refer to questions in the CODES software for IOCS data collection. These questions ask the data collector to report the nature of the activity being performed by the sampled worker. The BMC variabilities are estimated using data from the Produdivity Information Reporting System (PIRS). The IOCS responses used to form the cost pools were designed for consistency with the PIRS operations underlying the variabilities. 7 USP,S-T-12 1 contains a valid MODS operation code, the cost pool associated 2 assigned.13 :3 and 19 responlses which correspond 4 assignment 5 not relevant, the IOCS operation code is used to associate tallies with certain [mail I3 processing 7 with that code is If the MODS code is invalid or missing, combinations if possible. of IOCS question 18 to certain MODS cost pools are used to make an Finally, if question 18 and 19 responses are not available or p00ls.‘~ For each of the cost pools, a variability percentage has been estimated by 13 witness Bradleyy. The testimony of witness Bradley describes the dai:a and estimation !3 procedures used. When a cost pool has a pool-specific is estimated using a regression workload measure’5 its 10 variability model. MODS operating 1 'I mandate collection of workload 12 operations. 1:3 procedure, 14 operation workllo&‘6 15 cost pools without available workload measures, the estimate of variability is formed 16 using one or more of the variabilities 17 for Non-MODS measures for distribution Allied operation variabilities and mail preparation are also computed using a regression but use only volumes in direct distribution Similar procedures procedures operations as a proxy for allied are employed for the BMC cost pools. For for related cost pools. The basic function pools offices are treated as a single cost pool to which the overall variability of ‘3 The exception is the LDC 15 (RBCS) pool. This cost pool uses direct tallies in MODS operations 971976 (BCSIOSS) tat form the distribution fadorr, since IOCS does not sample adivilies at Remote Encoding Centers. An LDC 15 distribution methodology based on sampled RBCS images is under development but was not available for inclusion in this filing. ‘4 See Library Reference H-146 for the SAS source code which associates the IOCS clerk and mailhandler tallies with the mail processing cost pods. l5 The workload measures are Total Piece Handlings from MODS. ” Workload data for allied operations are being collected but are not available for inclusion in ,this tiling. - USPS-T-12 ./--’ 1 MODS office costs is applied. 2 pool to olbtain an estimate of variable costs. 3 ,,-.. The distribution The variability percentages are tapplied to each cost of volume variable costs to subclass is accomplished by 4 developing a distribution factor for each subclass within each cost pool. ‘The 5 distribution key is the percentages 6 distribution to subclass of the cost pool’s mixed-mail costs. 7 for counted mixed-mail items, as well as items and containers a mail or which are subject to the top piece rule. Counted mixed-mail items, identical 9 mail items, and items subject to the top piece rule are collectively of cost by subclass using IOCS direct costs, plus a Dirlect costs include costs which contiain identical referred to as direct 10 items. Uncounted 11 the same type in the cost pool. If there are no direct items of the same type in the cost 12 pool, the distribution 13 employed. 14 mixed-mail costs are distributed in proportion to direct-item costs of of direct-item costs of the same type acros:s all cost ipOOls is Mi,xed-mail containers are distributed one of two ways. For a majority of 15 containers, the data collector recorded the percentage 16 occupied by shapes of loose mail and/or items. These are refelrred to as identified 17 containers and the recorded percentages 18 shape and item type. The partitioned 19 corresponding 20 distributed mixed-mail items. The identified container distributions piece- or item-handling of the container’s volume (cube) are used to partition the tally dollars by loose dollars are then distributed to subclass using the distribution, including, in the latter case, are formed within USP.S-T-12 1 cost pools.” 2 distributed 3 costs of the same type. ‘4 Costs for containers for which the contents were not identified are to subclass in proportion The revised approach ,5 methodology 6 shapes and/or subclasses ‘7 For containers 8 distributions !3 mixed-mail to direct-container is a considerable for several reasons. costs plus identified container refinement of the existing mixed-mail It exploits the association of item ltypes with certain of mail, in effect using item types as mixed-mail categories. with more than one shape of mail or item type, it weights the direct based on the observed container contents. In contrast, the LIOCAU method assumes that containers with mixed shapes of mail contain the shapes in the proportions 1 ‘1 it allows for a c:ontinuum of mixed-mail categories for identified containers, defined by 12 what data collectors observe in the field. 1:3 of the appropriate direct tallies outside of containers. Finally, 10 The cost pools are defined to include volume-variable 14 costs are distriibuted to subclass using a distribution 1 !j associated It3 the direct costs plus distributed 17 incurred. 113 are a number of exceptions in which not-handling-mail 19 services and also direct costs and distributed with the cost pools. overhead costs. These of the not-handling-mail For most cost pools, the distribution costs ik in proportion to mixed-mail costs within the cost pool where they are Special service activity codes are excluded from these distributions. There costs are distributed to special mixed-mail costs are aggregated over ” For the MODS platform pool, container distributions are based on piece and item distributions in all allied labor pools. The container distributions for the BMC platform pool are based on piece and item distributions in all BMC pools. IO -, USPS-T-l 2 groups of cost pools. For example, not-handling-mail cost pool are distributed in proportion to the direct plus distributed mixed-mail costs in all MODS; 1 & 2 cost pools, and the distribution codes. costs in the Empty Equipment See Library Reference includes the special services activity H-146 for full details. Table 4 shows the cost pools formed from the Pay Data system and the estimated variable costs corresponding to each pool. Table 5 shows the distribution variable c:osts to subclass by cost pool. Table 6 shows the confidence cost category for the new method. calculation of confidence limits by direct Further details of the revised1 methodology limits are contained in Library Reference H-146. 11 , of and the USPST-12 Table 1: FY 1996 Estimated - IOCS Costs and Associated Confidence Limits Function by Craft Est. cost Est. Coefficient of Variation Lower 95% Confidence Limit aKS & MAILHANDLERS ail Processing Dimd Lab01 Direct Mail Mixed Mail Mail Pmt. Fifed 8 Var. Ovhd rindow Service dministration Time and Attendance Cther inct. Claims 8 lnquities TOTAL 6.077.919 2.670.527 3.306.636 I .737.030 0.39% 0.52% 0.47% 1.03% 6,031,643 2.643.372 3.276.286 1 w702.744 6.124,194 2.697.682 3.336.990 1.772.931 241,447 I .975.624 16.010.192 1.91% 0.74% 232,431 1.947.323 250,463 2.004.325 1-W CARRIERS In-Oflice Dired Labor ‘Training, Vehide Prep. In-Office support Street TOTAL 3.i11.318 245.638 575.808 7527.754 11.460.719 0.80% 3.14% 1.90% 0.34% 3.082.484 230.721 554,367 7.477.780 3.160,1!53 260.9!56 597,249 7.577.729 PECIAL DELIVERY MSGRS. Street Time Other TOTAL 85,476 19.306 104,703 1.33% 5.89% 83,249 17.079 67,704 21.5:34 947.358 39.053 118,022 28,951 417.115 5,296 10,970 39.775 183,037 975 430 57,329 32.675 98.035 458.272 715,060 3.152.552 1 .OO% 5.04% 3.81% 6.95% 2.00% 12.52% 12.86% 444% 2.86% 29.13% 38.05% 4.58% 5.12% 4.23% 2.72% 1.52% 928.720 35.198 109.211 25,008 400,735 3,996 8.205 36.317 172,781 418 109 52.183 29,575 89.908 433.600 693,727 965.995 42.9108 126.834 32,894 433,495 6.595 13.735 43,234 193,293 1,531 751 62,476 36.175 106,161 482.743 736,3,92 UPERVISORSi-TECH. ADM. Mail Pmcessing Central Mail Mad+up Window Setvice Administrative and Support City Delivery Carriers Special Delivery Messengjers Rural Delivery Carders Vehide Service Higher Level Supewisolrs Gen. Supv.: Mail Processing Sen. Supv.: ColledionIDelivety Supervisor Training Quality ContmtIRevenue Pmt. Supv. of mixed Clerk/Mb adv. Supv. of one or more crafts Other TOTAI - -I 12 -- - USPS-T-12 Estimated Table 2: FY 1996 Clerks and Mailhandlers - Mail Processing Costs and Associated Confidence Limits By Direct Cost Cat’agory (OLB methodology) Dired Cost Category Est. cosl Fi!rst Class Letters and Parceb Private Mailing Cards Postal Cards Presorl Letters and Parceb Presort Cards Itolity w-e.= econd Class Within County Outsidse County - Non Profrl Outside County - Classmom Outside County - Regular n bird Class Third Single Piece Rate Bulk - Ftegular Carder Route 13ulk - Regular 5-Digk Bulk - Non Profit Canter Route Bulk - Non Profit 5-Digil FIourth Class Parcels - Zone Rate IBound Printed Matter Special Rate Library Ratr Mlailgrams FIree for Blind/Handicapped Inltemational U SPS R egistry c ertitied Incwance c OD S pecial Dellvery 0 lther SpecAl Services Nlixed Mail a lther 2.040.071 90.701 1.914 616.490 23.057 264,768 62,632 0.59% 2.92% 20.18% 1.20% 5.02% 1.03% 3.06% 2.015.317 85,519 1,157 601,937 20.425 255,279 57.893 2.880.824 95,083 2,671 631,042 25.689 274,258 67,371 9,525 44.430 2.485 244,398 13.48% 4.38% 32.61% 1.03% 7,008 40,615 896 235.630 12,042 46.244 4,073 253,165 45,958 144.856 878.996 15,565 212.502 3.99% 2.50% 0.96% 6.90% I .86% 42,367 137.761 062.510 13,460 204,747 49,549 151,951 095.481 17,670 220.257 61,349 38.043 40.228 8.503 62 5.305 123.044 58.692 73.946 51,439 8.082 4.859 974 77,047 2.670.527 3.306.6381 2.85% 4.32% 3.95% 9.00% 97.72% 11.18% 3.40% 3.00% 3.55% 4.48% 12.36% 16.40% 26.57% 3.32% 0.52% 0.47% 76.612 34,022 37.113 7,003 -57 4,142 114,032 54.226 68.802 46.918 6,123 3,297 467 72.039 2.643.3721 3.276.2861 05.685 41.264 43,344 10.002 182 6,467 131,255 63.158 79.089 55,961 10,040 6,421 I .482 82.054 2.697,682 I 3.336.9901 USPS-T-12 Estimated Table 3: FY 1996 City Carriers - In-Cfbce Costs and Associated Confidence Limits By Direct Cost Category Dired Cost Category Fi,rsl Class I Letters and Pam& Private Mailing Car& Postal Card: Presort Letters and Parceb Presort Cards PIliOlity E wStecond Class Wtiin Count) Outside County - Non Pro61 Outside County - Classman Outside County - Regular Tl nird Class Third Single Piece Rate Bulk - Regular Carrier Routr Bulk - Regular S-Digl Bulk - Non Pmfit Carrier Route Bulk - Non Profit 5-Digi R ounh Class Parcels-Zone Rate Bound Printed Mattel Special Ratr Library Ratt Mlailgrams FIree for Blind/Handicapped Ill itemational U SPS R egistry C ertified IIIlsuranue c OD S pecial Delivery 0 rther Special Services Mlixed Mail 0 Ither Est. Coefficient of Variation Est. cost I Lower 95% Confidence ILimit I 1.022.368 42,583 987 502.542 16.133 24.871 2.347 1.72% 5.45% 25.02% I .72% 7.12% 6.97% 18.15% 987.824 38,037 503 485i,558 l?: 883 211474 1,512 I .056.912 47.128 1.472 519,525 18.384 28.267 3.182 9,845 24,625 847 101.485 16.06% 5.79% 30.49% 3.12% 6745 21,829 341 95.275 12,944 27.421 1.353 107.696 13.312 265,125 379.885 18.763 88,729 7.74% 2.21% 1.75% 6.46% 3.13% 11,292 2538,616 366851 lEi.387 83i.278 15,332 276,635 392.919 21.138 94.180 5.231 6,391 4,927 471 0 1,074 8.145 7.157 1,339 23,829 425 1.053 241 5,349 91,975 439,267 11.90% 12.55% 24.90% 39.68% 0.00% 27.65% 9.11% 10.81% 21.24% 5.55% 37.35% 29.40% 41.17% 11.33% 7.16% 1.93% 4.,011 4.,819 21.523 105 0 492 6.691 5.640 781 21,238 114 446 47 4,161 6.451 7,962 7,332 837 0 1,656 9,600 8.674 1.896 26.420 737 1,659 436 6,536 14 -- -~ USPS-T-12 cost Pod casts 681.360 z24.19a LSM.MPLSM & SPLSM WBCR hledunhd. car Mechanical-WDollcslde -ed Panxls SPBS-NmPdodty SPBS - Pdaity Manual Opentiaras Mantat Flats h4awatLesEfs MMlal Parcels MMuat Prhity LDCIS-RSCS Allied Operations Ah cortnd DCS and Incoming Bulk Pmscit camon a Mail P,epmtim - metered Manual sort - sack oeide openw unit - Prekrred Mait OpenLrg unit - 66M PLatfOOrm POlKhi~ operatis Other opentianr susinesr Reply I postage Due Damaged Pad Remap Em@y Equipment Exqxes Mail Mailgram Mail Processing Support M~uaneous ncimy -SW 30 Intemahl “NCTlON 4 LDC 4l- “nil Disbibutbn - Atimnated 31 32 LDC 42 - Unit Dis(ributm - Mechanted 33 LDC 43 -unit Diitdm - Manual 34 LDC 44 - Pc&o,~e BOX Distnbu(ion 35 LDC 48 - custmlw service I wess 36 LDC 48 - Cudcmer Serrice I Admin 37 LDC 48 C”stclnel senke I Spec.Sern. 37a LDC 48 - customer senice I other. 38 LDC 49 - Comp%Wi& Fording SysL LDC 79 Mailing Re.$ & Bus Mail Enby 39 MODS 1 8 2 S”btcbl MC* Pla”am 40 Amd Later 8 at, &l-e Mail Processing 41 Pace4 Sating Machine 42 43 sack kiting Matine 44 SPBS & thgtiar Parcels (IPP a 115) 45 No”44xhhabte outside (NMO, w.cr s”tJtdal ITHER AH Other operations (i.e.. “On-MODS, 46 945% 76.6% 676.538 562170 736.969 731.65l 16acks~nl mecparc SPBS 0th SPBS Pro mad manI 47.771 9.607 174.127 57.966 514.646 1.3-%326 eJ.049 222.512 382.392 l.sca 1Bulk pr 1CamMPP 1sacks-il IOpPref 1opsm 1Platform 1Pouching 58.053 11.667 267,696 169.234 746.406 315.033 891.539 437.919 @29% 72.6% 66.4% 526% 720% 74.1% 72.6% 62.9% BusReply R-P 1EEqmt mr== hbilgram 1 support 1hat Registry I”6 31.344 15.579 -a885 79.142 366 137,232 130.709 126.943 110.273 79.7% 76.6% 76.6% 44.8% 79.7% 76.6% 76.6% 15.3% 76.6% LD41 LD42 LD43 LO44 W&Exp LD48 Adm LD4a sps LD48 ml LD49 LD79 Pt?.tfOrm AUied PSM SSM SP6 NM0 643..3s 176.2X 16.542 2.139 521,no 126.758 3,203 146.356 1c6.485 127.532 262.327 134.635 10.225.M)1 176.353 231.996 64,109 30.796 63.612 29.316 616.384 16.673 1.946 427.687 103.942 1.441 16.292 19.512 229.616 96430 7.624.32 53.096 54.0% WC% 99.0% 73.0% 67.0% 63.5% 93,457 125.276 75.696 30.489 46.583 19.M2 391.157 USPS-T-12 Table 5: PI 1996 Distributed Volume-Variable MODS bcs Subdass Cost by Cost Pool and Subclass MODS ocr MODS fsm I Letters and Parcels Presort Letters and Parcels Postal Cards Private Maihg Cards, Presort Cards Total First Clae (NEW methodology) I 342,248 169.043 0 6.532 3,295 521,118 119,279 27,333 71 2,792 758 150,234 370.577 18.321 494.859 69.830 599 369 3 389.271 26,142 3,637 595,067 393 108 29 2 7.983 164 247 490 3,081 1 0 7.017 wnlii county Outside County - Regular Outside County - Non Profit Otide County - Classroom Total Second Clas 2 613 387 1 1,002 0 260 86 0 347 501 39,303 8.049 831 48,664 99 931 393 1 1,424 12 513 171 7 703 151 5.229 1,229 139 6,747 Third Single Piece Rate Bulk - Regular Carrier Route Bulk - Regular 5-Digit Total Third Bulk Regul; Bulk - Non Profit Canier Route Bulk - Non Profit 5.Digit Total Third Bulk Non Pm T&l Third Cla: 2,254 8.619 77.869 86.708 2,164 25,676 27.840 116.802 358 2,409 12,642 15,051 798 5,695 6,492 21,901 4,171 9,226 171.609 180.835 661 27,308 27.969 212,974 2.402 3.195 30,010 33,205 667 13,995 14.662 50.268 8 223 484 707 84 369 453 1.168 1,073 6.502 29,117 35,619 470 5.877 6,354 43,047 Parcels - Zone Rate Bound Printed Matter Special Rate libraly Rate Total Fourth Cla! 41 56 4 2 105 6 2 76 0 .04 1.311 2,023 1,161 325 4,820 93 17 104 1 216 1.221 317 101 197 1,836 705 1,104 384 236 2.428 696 2 2.857 448 1 2,466 4,296 0 6.507 2,138 1 10,650 78 2 6 651 511 143 27 148 112 39 3 0 33 PliOrity Ekpress Mailgrams USPS Free for Blihliandicapped International Regisby Certified Insurance COD Spedal D~elivery Spedal Handling OUwr Special Services I 1.518 18 0 98 0 1,635 19.874 a97 69 136 20,976 0 774 TO1 643.885) 561 176.2201 16 1.720 676.5381 1,630 662.170) 8.6651-l 152 111 USPS-T-12 ,x Table 5: FY 1996 Distributed MODS 3PBS Prio Subdass ,_ r‘ Volume-Variable Cost by Cost Pool and Subclass (NEW methodology) MODS ISackS-m Lettets and Parcels Presoti Letters and Par&s Postal Cards Private Mailing Cards Presort Cards Total Frst Clar 9.511 1,310 0 19 11 10.852 6,336 1,637 0 6 1 9,981 175,540 12.650 0 77 335 188,801 632,570 119,617 551 33,976 6,492 795,206 4,334 547 0 2 1 4,063 7,927 1,023 0 72 0 9,023 PliOrity Express Mailgams 27.716 32 0 3.488 40 0 10.048 768 4.215 1,309 72 6,663 421 0 80.642 1,173 Within County Outside Courtly - Regular Outside County - Non Profit O&ide County - Classroom Total Second Clar 2 1,161 135 0 1,296 40 7.716 2,766 27 10.551 2,923 72.576 10,795 383 86,676 639 llD.756 :2,123 1 13.518 0 1,024 201 0 1,226 2 630 8 0 639 Third Single Piece Rate Bulk - Regular Carrier Route Bulk - Regular 5-Digit Total Third Bulk Regul; Bulk - Non Protit Carrier Route Bulk - Non Profit 5-Digit Total ‘Thiid Bulk Non Pro Total Third Cla! 189 793 1,697 2,490 12 106 120 2,799 130 2.715 10,172 12.887 309 2,381 2,690 15.707 4.208 6,894 111,471 118,365 608 22,944 23,552 146.124 7,679 9.802 148,974 158.776 1,530 61,666 63,198 229.650 312 564 3,167 3,731 1 181 182 4,226 400 285 704 989 9 169 178 1,567 Parcels - Zon~eRate Bound Printed Matter Spedal Rate Library Rate Total Fourth Cla! 1,032 180 252 2 1,465 2,919 484 797 1 4,201 711 2,732 802 671 4,916 626 376 301 84 1,389 3,393 555 992 254 5,195 369 97 171 4 641 USPS Free for BliidMandicapped International 536 556 1,037 5 1 3,353 1,624 553 5.400 5,322 397 13,702 510 0 544 3,063 67 2,730 78 0 14 65 544 52 0 42 0 805 4,509 Registq Certified Insurance COD Special Delivery Special Handling omer Special Services I TOI 46.3731 47.3411 445.8581 1.069.834]23.719~ 97 99,665 USPS-T-12 Table 6: M 1996 Distributed Subdass - Volume-Variable Cost by Cost Pool and Subclass MODS 1Bulk pr MODS LD15 MODS ICancMPP I Letters and Parcels Presort Letters and Parcels Postal Cards Private Mailing Cards Presort Cards m4 Fti Ckl! Wthh county OulGde County - Regcdar Ouhide County-Non Profit O&ide County-Classroom Total Second Cla! Third Single Piece Rate Bulk - Regular Carrier Route Bulk - Regular 5-Digit Total Third Bulk Regul; Bulk - Non Profit Carrier Route Bulk - Non Profit 5oigit Total Third Bulk Non Pro Total Third Cla! 276,906 53,179 8,843 1,850 340,776 1.166 1.166 1.938 4,506 22.373 26,679 4,547 4,547 33,365 Parcels -Zone Rate Bound Printed Matter Special Rate Librawy Rate Total Fourth C:la! 1,321 USPS Free for BEndG-hdcapped Intennational 5,932 Registry Certiified lnswance coo Special Delivery Special Handling Other Special Services t (NEW mlethodology) I 2.095 3,740 0 58 222 6.115 157,525 6,147 64 3.368 193 167.296 575 278 63,424 1306 310,!328 234,627 54.081 112 2t.398 1,244 292,462 310 7 0 6,494 177 7,270 370 40.!388 I.!342 67,625 9.662 3 309 16 1 329 12 1,391 132 4 1,539 165 13.107 1,626 591 15.489 790 53,233 8.!524 433 62379 926 51,210 7,466 459 162 412 541 952 12 449 460 1.575 1,007 768 2,769 3,557 76 1.199 1.275 5,639 2,297 17.587 96.215 I13.802 2.737 21,621 24,356 140.457 2.B91 14.300 64.238 78,!i38 667 19.072 19.759 101,266 4.699 22.687 88.901 111.588 1.558 18.134 19,692 135.979 16 77 9 3 104 918 160 167 190 1,435 2,024 1.905 1,021 136 5.085 3.211 2,437 1.219 !515 7.382 24,416 6,171 5,623 1.154 37,364 4 2 20 1,490 172 2,009 157 2 915 4,284 I.:246 4.!380 5,470 1.279 16.232 4 0 15 14 i517 416 53 51.610 10.961 240.1323 66,002 90 0 44 956 E - 1,669 0 I 383.5391 a,4701 188,154~ 264 233.4651 43 1516 411 536.15941647.,257] - USPS-T-12 /-- Table 5: FY 1996 Oistrfbuted Volume-Variable MODS 1Pouching Subclass Cost by Cost Pool and Subclass (NEW methodology) MODS 1SackS-h I Letters and Parcels Presort Letters and Parcels Postal Cards Private Mailing Cards Presort Cards Total First Cla! r‘ 181.196 42.610 372 2.725 1,615 226.516 20.611 6,996 PliOrity Gpress Mailgrams 28.032 17,950 5.708 0 54 0 23,793 2.:321 ,476 0 78 0 2.;975 7,334 927 0 475 129 6,664 26,627 2,705 14,744 1,279 17,194 3,366 1.!324 26.727 285 114 0 Wthin County Outside County - Regular Outside County-Non Profit Outside County - Classroom Total Second Cla! 235 17,921 3,700 349 22,206 664 12,002 2,395 22 15.082 3 1,063 17 1 1,084 1 174 5 0 ‘I 80 1 16 2 0 21 Third Single Piece Rate Bulk - Regular Carder Route Bulk - Regular 5-Digit Total Third Bulk Regul: Bulk - Non Protit Carrier Route Bulk - Non Protit 5-Digit Total Third Bulk Non Pro Total Third Cla! 1.841 5,024 49,661 54,665 390 7,390 7.780 64,306 509 4.691 13,199 17.890 568 2,791 3,359 21.758 141 493 996 1,469 11 87 98 1,729 I59 11 :275 :286 1 112 II3 i557 447 547 559 1 99 100 1,105 Parcels-Zone Rate Bound Printed Matter Spedal Rate Liirary Rate Total Fourth Cla! 2,141 926 1,025 944 5.038 3,530 785 620 258 5.193 48 241 4 4 299 14 6 107 0 127 157 160 0 1 319 USPS Free for BhdMandicapped International 2,266 794 9.890 740 267 1.815 42 2 339 ‘923 1 2.055 276 1 294 183 57 0 89 756 425 229 Regisby Certified 11 2: i5 2: 55 39 IllSU~llCe COD 28 Special D&very Special Handling Other Special Services 235 TO 363.0351 31 76 89.0171 59 I 46.109~ ,r 19 --I 2 12.857 35,456124.9811 33 USPS-T-12 Table 5: M 1996 Distributed Volume-Variable MODS RegistF/ Subdass Cost by Cost Pool and Subclass (NEW methodology) MODS Rewrap MODS 1EEqmt I Letters and Parcels Presort Letters and Parcels Postal Cards Private Maihg Cards Presort Cards Total Fust Clas? 1.806 44 6,463 183 169 647 1,859 7,462 310 416 1,636 1,966 563 0 5,763 1.138 1 5.886 1,117 1 2,006 1,990 wtii county Outside County - Regular Oukide County - Non Proft Outside County - Classroom Total Second Clas 0 52 1 0 54 1 245 8 1 254 319 2,596 404 27 3.349 105 3,946 800 40 4.693 163 4,734 765 48 5.711 24 1,106 01 3 1,213 Third Single Piece Rate Bulk - Regular Catier Route Bulk - Regular 5-Digil Total Third Bulk Regular Bulk - Non Profit Carrier Route Bulk - Non Prctit Migit Total Third Btdk Non ProS Total Third Clasz 1 3 39 42 0 5 5 47 201 13 1,632 1,645 0 26 27 2,072 271 1,294 7.605 8.898 190 1,665 1.875 11.045 700 1.738 13,516 15,254 235 4,074 4,309 20,263 660 1,933 15,242 17,175 212 3,947 4,159 21,994 119 121 1,405 1,526 1 329 329 1.974 Parcels - Zone Rate Bound Printed Matter Special Rate Library Rate Total Fourth Clasz 35 7 65 0 107 3 1 774 262 135 53 1,225 759 356 188 69 1,371 920 319 225 82 1.547 236 1 2 34 273 USPS Free for BlindMandicapped International 339 0 324 6 216 220 827 988 82 3,327 832 99 2,669 292 123 65,706 420 54 1 5 2 1 251 571 79 416 118 3,453 33 2 2 2 858 78 5 3 753 4 5 Prioiny Eqxes Mailgrams a 15.566 60 Regisby Cetified 0 5 807 -I IlwIallCe COD Special Delivery Special Handling Other Special Services -- 300 Tcta 19.4231 2 12.2451 15,111 3,366 10 430 109 19,045 52.0851 8.971 26 1.676 638 63,396 54,221 10,440 32 1,529 395 66.616 39.2101 8,184 1,159 257 0 9,601 102.737( 107.864)86,675] -., USPS-T-12 /-- Table 5: I-Y 1996 Distributed Subclass Volume-Variable Cost by Cost Pool and Subclass MODS MODS LD41 LD42 (NEW methodology) I Letters and Parcels Presort Letters and Parcek Postal cards Private Mailiig~ Cards Presort Cards Total Fkst Clar 169.193 43.038 79 3,856 883 217,048 5EI.109 18,012 0 1.064 67 78,252 214 16 0 1 0 231 7.840 2,356 2 270 45 10,513 21 1 0 29,352 4,215 3,526 757 0 19 1,092 1,132 257 0 76 0 59 1 0 60 1,006 21,985 3,488 87 26,567 138 3,189 415 0 3,,743 0 9 0 0 9 23 721 140 2 886 Third Single Piece Rate Bulk - Regular Carrier Route Bulk - Regular 5-Digit Total Third Bulk Reguk Bulk - Non Profit Carrier Route Bulk - Non ProIn 5-Digit Total Third Bulk Non Pro! Total Third Claa 110 237 1,592 1,829 69 365 434 2,373 77 35 546 581 27 63 90 740 3,263 30.214 66,421 96,635 3.470 14,469 17,939 117,037 68 1,414 11,718 13,130 301 1,816 2,117 15.315 1 9 36 45 1 14 15 61 124 1,099 2.284 3,383 177 503 680 4.187 Parcels - Zone Rate Bound Printed Matter Special Rate Library Rate Total Fourth Clas 0 0 23 0 21 0 45 10,457 4,721 4,864 839 20,881 169 258 379 2 ‘809 10 4 3 1 17 359 116 181 17 674 77 0 21 0 1 2.633 723 2.713 ,520 1 ,369 1 0 3 147 16 71 0 0 1,308 2.006 116 317 :358 0 8 305 498 15 45 10 1,973 292 0 757 PriOrity Express Mailgrams W&in County Outside County - Regular Outside County - Non ProM Outside Coun~( - Classroom ‘rotal Second Clar /- USPS Free for BlindlHandicapped International Registry Certified Insurance coo Special Delivery Special Handling Other Special Setices - 8,579 893 5.665 0 0 91 14,335 106 0 15 37 1,051 10 0 76 0 0 0 I Tot: 16,8731 Ol I 1.9461 427.6871 103.!)4211,441(19.512) USPS-T-72 Table 5: FY 1996 Distributed Volum&hriable MODS Subclass Cost by Cost Pool and Subclass (NEW methodology) MOOS LD79 MODS iD49 D48 SSv I Leltem and Parcels Prlesort Letters and Parcels POStal cards PtiiMte Mailing Cards Presort Cards Total Fust Clasl 4.167 894 0 107 0 5.168 588 1.3291 Priority Bpress Mailgrams 0 BMCs NM0 I 81,152 61,941 BMCs PSM I 1 2 941 5.631 1,963 150,687 7.808 18.438 0 1,333 1.130 28,709 0 0 3 553 1,547 1,709 12 0 1,686 33 0 83 0 343 79 0 0 118 2 27 1,522 571 8 2,128 0 605 wwhin Caulty Oukide County - Regular Outside County - Non Profit Oukide County-Classroom Total Second Clas: 180 81 0 281 648 21,682 5,671 1 28,001 423 1,270 787 0 2,480 0 503 2 2 507 Third Single Pii Rate Bulk - Regular Carrier Route Bulk - Regular 5-Digit Total Third Bulk Regula Bulk - Non Profit Carrier Route Bulk - Non Profit 5Digit Total Third Bulk Non Profi Total Third Clas 81 244 774 1,018 1 31 32 1,130 8.242 2.250 9,429 11,679 306 1.531 1.837 21.758 1.073 6,707 37-112 43,819 1,390 16.587 17.977 62,869 70 415 4,377 4,792 65 536 601 5,463 2,311 677 23,113 23,790 75 1,427 27.528 1,611 1.871 23,168 25,039 141 4.337 4,478 31,128 Parcels -. Zone Rate Elound Printed Matter Special IRate I.JbMy Rate Total Fourth Clas 35 58 117 0 211 612 1,925 283 77 2.898 461 6 2 1 470 8.250 1,308 1,086 1,215 11,859 12.329 10,500 15,578 2,332 40,739 3.75.L 1,316 1.917 315 7.300 IJSPS Free for BEndMandicapped International 308 0 242 11,970 214 999 1,484 1 680 839 1 087 377 560 5,434 518 455 3,393 1.851 2,016 13 0 62 0 IRegisLqr CeilitiL?d Insuranl:e COD Special Delivery Special Handling other Special Services 121 1,352 36 0 63 150 2,976 11,358 16.2921 229.6181 37 I Toti 98.4301 19.6421 .- USPS-T-12 Table 5: FY 1996 Distributed Volume-Variable Cost by Cost Pool and Subclass (NEW methodology) Subclass Lettas and Parcels Preat Letters and Parcels Postal Cards Private Mailing Cards Presort Cards Total Fti Cla: 110 108 1.948 497 201 0 93 14 218 2,041 1 0 Wtiin County O&de County - Regular Outside County-Non Profit Outside County - Classroom Total Second Clas 712 795.228 214,642 883 23.96’1 7,399 1.042.113 4.655.673 1.063.50s 3.062 133.288 35,765 5.891.292 599 330 19 65,924 20,556 477.893 84,370 75 12 4,545 727 113 5,397 20 3,720 856 414 5,011 35 5,499 1,326 325 7,184 5,046 91,113 14,267 1,311 111,737 15,161 461,201 80.618 5,632 562,612 Third Single Piece Rate Bulk - Regular Carrier Route Bulk - Regular S-Digit Total Third Bulk Regulr Bulk - Non Prom Carder Route Bulk - Non ProM 6-Digit Total Third Bulk Non Pro1 Total Third Clas 383 2,679 11,830 14,509 124 1,813 1,937 16,829 4,208 5,437 42,940 48,377 658 7,149 7,806 60,391 2.309 5,151 27,741 32,892 374 3,508 3,882 39,003 12,928 80.315 299.721 380,036 7.719 60,717 68,436 461,400 78,184 265,772 1.540.108 1.805.880 28,895 366,726 395.620 2.279.685 Parcels-Zone Rate Bound Printed Matter Special Rate Library Rate Total Fourth Clas 3,529 815 1,422 353 6,119 23,992 9,133 9,737 1,951 44,813 21,154 8,377 7.458 1,986 38,975 19,634 12,908 8.471 1,758 42,771 USPS Free for Blind/Handicapped International 205 0 1.719. 1,009 595 10,622 1,197 278 5.659. 16.780 720 6,429 105 25 14.973 12.789 630 1,307 Priority Express Mailgrams Regisby Certified Insurance COD Special Delivery Speci:al Handling Other Special Setices 0 84 Toti 30.4891 125.2781 6 93.4671 115 28,806 42,211 18,484 771 1,817 243 199 76,036 1.827.050~ 10.042.529 USPS-T-12 Estimated Table 6: IT 1996 Clerks and Mailhandlers - Mail Processing Costs and Associated Confidence Limits By Direct Cost Category (NEW methodology) Direct Cost Category iti Class Letters and Parcel: Private Mailing Card: Postal Card: Presort Letters and Parcel: Presorl Card! riorlty xpress econd Class Wnhin Count) Outside County - Non Pmti Outside County - Clas.sroon O&ide County - Regula, bird Class Thim Single Piece Ratf Bulk - Regular Carrier Routf Bulk - Regular 5-Digi Bulk - Non Profit Carrier Route Hulk - Non Profit 5-Digi wrth Cla:ss Parcels - Zone Ratf Bound Printed Mattel Special Ratf Library Ratf ailgrams ree for Blind/Handicapped ltemational SPS egistry ertitied ,S”r?m% OD pecial Delivery ther Special Services iixed Mail ,ther -Otal Est. Coefficient of Variation Est. Cost I I 2.466.167 78.315 1,662 530.754 23,079 162.067 24.650 0.54% 4.10% 19.67% 1.53% 11.72% 1.85% 4.76% 2.439.!326 72,026 1.621 522,!i46 17,779 156.1189 22,!i39 2.492.408 84,604 2.303 554,962 28,379 167,944 27,178 7.722 36,478 2,101 202.342 12.91% 4.30% 30.17% 1.75% 5,768 33.4105 859 195.4.10 9,676 39.551 3,343 209,273 37,603 120.085 749,735 12,172 181,653 5.86% 3.57% 1.09% 6.67% 2.37% 33.283 11 I.1382 733.751 10.5~34 173.218 41,922 128.489 765.719 13,810 190,089 57,674 31,673 31.918 7,084 50 4,103 89.235 39,583 21,256 13.970 547 1,566 146 50,940 2.140.038 2.907.951 10.042.530 2.84% 4.22% .3.79% 6.80% 95.13% 11.05% 3.94% 7.17% 5.14% 7.55% 37.67% 25.46% 44.27% 5.90% 0.61% 0.44%] 54,468 29.055 29,550 5.862 -43 3.215 82.350 34,023 19.115 11,902 143 785 19 45,047 2.114.5651 60,881 34,291 34,286 8.306 144 4,992 96.120 45.143 23,397 16,039 952 2,348 273 56.8331
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