DOCKET SECTION
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON, DC 202684001
POSTAL RATE AND FEE CHANGES, 1997
)
F’7e
ri, ,.
‘Lu”im’r;!)
l,h~\o,jR$y-jli
#!;a
FURTHER ERRATA TO DIRECT TESTIMONY OF DR. JOHN HA.LDI (VP/CW-T-l)
ON BEHALF OF VAL-PAK DIRECT MARKETING SYSTE,MS, INC.,
VAL-PAK DEALERS’ ASSOCIATION, INC., AND
CAROL WRIGHT PROMOTIONS, INC.
(February 26, 1998)
The attachederrata reflect further changesassociatedto the responsesto
MOAA/VP/CW-Tl- 1-11, and also contain certain other minor changes. Most corrections deal
with changesnecessitatedby a miscopying of ECR High-Density and Saturation DDU-entry
volumes in table A-6 at p. A-13.
Respectfully submitted,
William J. Bson
John S. M&
Alan Woll
Jack F. Callender
WILLIAMJ. OLSON,P.C.
8180 GreensboroDrive, Suite 1070
McLean, Virginia 22102-3823
(703) 356-5070
Counsel for Val-pak Direct Marketing Systems,
Inc., Val-pak Dealers’ Associ:ation,Inc., and
Carol Wright Promotions, Inc.
mTIFICATE
OF SERVU
I hereby certify that I have this day servedby hand delivery or mail the foregoing
document upon all participants of record in this proceeding in accordancewith Section 12 of the
Rules of Practice.
February 26, 1998
25
Revised 2/26/98
Table 3
Standard A ECR Mail
Revenues and Costs Test Year After Rates
By Shape
c§, 000)
Total
6
7
Revenues from Rates
4,262.518
i
Volume-variable Costs,
including contingency
1.885.440
10
Margin
2.377.078
11
Mark-up
126.08%
12
13
Per Piece (cents)
Letters
14
Revenues
,$$71
14.86
15
costs
-E!Li9
6.57
16
Margin
6:02
17
18
19
20
Source:
Revenues, Appendix C, Table C-12.
Costs, Appendix A, Table A-2.
Volumes, Appendix A, Table A-6.
a.29
Revised 2/26/98
In part D, rates developed for BMC dropship
were rosunded. Shipping
costs of 1.5 cents were added to develop rates in the No Destination
column.
Rate differentials
of 0.3 and 0.5 cents, respectively,
to develop the SCF and DDU rates.
Table
C-3:
Standard
Proposed
Rates.
reproduces
TYAR Volumes
initial
adjusted
revenues
These are the initial
A ECR Letters
This table is a continuation
Development
rates.
of VP-CW
of Table C-2. Part E
from Table A-G. These volumes multiplied
rates (Table C-2, part D) result in TYAR initial
$.~~~;194,~28,~~~ (Table C-12) results in a difference
rates of ,~29-~~~~~,:1128,
or &33 cents per piece. Adjusting
amount
were subtracted
alljusted
of ~~~~~~~~~~~~~~~~~~~~~~~
1, ,I,,,,~, as shown in part F. Subtracting
for letters,
Entry
initial
by the
projected
target revenues
from the initial
rates by this
results in the proposed rates for letters shown in part G.
The difference
between
proposed rates and the current
l, part D), stated as a percentage,
is shown in part H. The presort
from the Basic Rate is shown as the differential
Multiplying
TYAR projected
rates (Table C-
in part I.
the final rates in part G by the TYAR volumes
revenues
discount
gives us the
of $l,,l:1,9~,~q~.;l)$~~,as shown in part J. This is a
slight decrease of $~if:&$,@$lor &o,$ percent from the Postal Service’s proposed
rates TYAR revenues
of ~~~~~~~~:,:628~~~~.
C-3
Revised 2/26/X3
Table
C-10:
Standard
A ECR Nonletters
VP-CW
Proposed
Table
C-11:
Standard
A ECR Nonletters
VP-CW
Proposed
Rates.
TYAR
Projected
proposed
Revenues
and Margin.
Multiplying
the VP-CW
rates (Table C-10) by the volumes (Table C-4) and weights
5) gives TYAR projected
9) leaves the margin,
revenues.
Deducting
~~~~~~~~~~~~~~
developed
from
to institutional
more than the contribution
projections
of
(Table C-
the total TYAR costs (Table C-
or expected contribution
~i~~~~~~~s”~~,as which is $4,044,084
Rates
the
Postal
Ser,rice’s
costs, of
of
proposed
rates.
Table
Comparing
C-12:
Standard
the contributions
A ECR Mail
projected
TYAR
equal but slightly
more,(by
rates proposed by the Postal Service.
LETTER
MARGIN
c-5
Revenue.
by USPS and VP-CW proposed rates
shows that the rates proposed by VP-CW provide
essentially
Projected
a combined
margin
$4,,944,984) than the margin
that is
from
Table C-3
Revised 2/Z/98
Standard A ECR Letters
Development of VP-CW Proposed
E: (TYAR Volume
Rates
- Pieces)
No Dest.
EfW
LETTERS
Automation
Basic
682,281.CCO
835.299,ooO
BMC
SCF
-
856,221,OW
1,035,288,000
479.035.000
1.205.217,DW
--._-_..-
-______-
1 1.932.453.0'331
2,140,817,w0
DDU
___42,125.LUl
97361,000
__.......__...._
3.S62.555,WO~676.975,ooo1
Total
-___
2.059.662.000
3.173.765.000
392,986,OW
3.086.367.000
________......____.
a,712,aW,OOO
F: INITIAL REVENVES
LETTERS
Automation
Basic
High-D
Saturation
Subtotal
111.211.803
142.000.830
5,811,1651
49.647.8681
126.720.708
160.469.640
4.945.200
24.929.6241
69.460,075
183.192,984
31.601,5371
23339.2601
5.897,500
14.400.267
8.050361
51.793.610
-1
1 308.871.6661
317,065.172~
517.643.6761
80.148.013~
Il,223.728,727
Target Revenues
Difference
from letters (Table C-12)
Per piece difference
G: FINAL ADJUSTED
Automation
Basic
High-D
Saturation
PROPOSED
No Dest.
Entry
_____
16.0
16.7
14.2
12.9
313,290,086
500,063,721
1 0.003339931I
90% FIXED, 10% PERCENTAGE
BMC
SCF
DDU
____.
14.5
15.2
12.7
11.4
14.2
14.9
12.4
11.1
13.7
14.4
11.9
10.6
H: PERCENTCHANGEFROMCURRENTRATES
Automation
Basic
High-D
Saturation
9.65b
11 OA
OoA
-3%
9.OOA
11%
-2%
-5%
I: PRESORT
Automation
Basic
High-D
Saturation
10.9%
13%
0%
-3%
11.4%
13sb
0%
-4%
DIFFERENTIAL
0.7
0,7
2.5
3.8
2.5
3.8
0.7
__
2.5
3.8
0.7
2.5
3.8
J: INITIAL REVENUES
LETTERS
Automation
Basic
High-D
Saturation
Subtotal
lW.164.960
139.494.933
5,690.934
48.348.684
1 302.699.5111
124.152.045
157.363.776
4.831.060
24.064.552
68.022,970
179.577.333
30.855.044
225.271.392
49.910.206
310.431.453)
503.726.7391
77.646.2371
c-a
14,106.384
11.194.503.9401
Table C-7
Revised 2/26/96
Standard A ECR Nonletters
Postal Service Proposed Rates
TYAR Projected Revenues and Margins
No Dest.
Entry
._...
NONLETTERS
Piece-Rated
Basic
Hiah-D
Saturation
Subtotal
SCF
BMC
___-
DDU
Total
92,643,108
4.444.497
39.636.087
256.914.689
5.870.656
36.013.194
510.013.476
62.809.155
274.210.050
16.290.576
27.795.560
365.527.302
675.662.051
vw9i9,870
_ 715.366.633
136.723.692
298.796.741
847.032.683
409.613.438
1.692.768.554
261,952,240
17.750.612
_ 72.466.286
Pound-Rated
Basic
High-D
saturation
13.831.078
253,834
1.601.549
59.803.696
179.281
181,171
185.200.234
6.502.049
12.442.605
3.117.232
1o,ai5,448
56242,763
Subtotal
15.686.461
60.164.148
204.145.068
72.175443
352.171.140
Per pound
Basic
High-D
Saturation
42.220.227
1.033.362
7.861.726
157390,164
626,363
756,442
471.664.940
2, ,982,149
50.844.184
7.562.145
34.743.361
226.164.474
679,537,476
58.385.234
285.626.627
Subtotal
51.715.315
159.272968
544.691,273
268.469.981
1,023,549,537
pmy
TOTAL
I(Deleted)
[I]
I
Table C-4 Volume.
[2] Table C-5 Weight,
[3] Table C-6 USPS Proposed
Rates
c-12
Table C-12
Revised 2/26/9a
Standard A ECR Mail
TYAR Projected Revenue
N Revenue - After Rates
Enhanced
(Volumes
dategories
Carder Route Subclass
and Revenues in Millions)
Unit
Volume
Rates
(2)
(1)
1
2
3
4
4a
5
6
7
a
9
10
11
12
13
14
15
16
17
(2)
(3)
piece
piece
piece
piece
0.164
0.143
0.134
0.157
3173.765
392.986
3086.387
2059.662
8712.8
520.497
56.197
413.576
323.367
1313.637
piece
piece
piece
0.164
0.153
0.141
5897.937
750.655
5893.965
12542,556
967.262
114.8W
831.049
1913.161
piece
piece
piece
0.055
0.044
0.032
4762.7676
403.423
2264.6339
7430,8242
261.952
17.751
72.468
352.171
0.530
0.530
0.530
1509.972
135.773
670 004
2315.7493
26666.162
800.285
71.960
355.102
1227.347
per piece
per piece
per piece
-0.015
-0.018
-0.023
4193.438
10150.4w
4104.013
18447.852
-62.902
-182.707
-94.392
-340.001
per pound
per pound
per pound
-0.072
4.088
-0.110
347.758
1232,333
639.214
2219.305
-25.039
-108.445
-70.314
-203.797
22
23
24
25
Basic
High Density
Saturation
Subtotal
Total
Drapship Discounts:
Piece-Rated
BMC
SCF
DDU
Subtotal
Pound-Rated
BMC
SCF
DDU
Subtotal
26
27
28
29
30
3,
32
Net Revenue from Rates (L.4a+L.a+L.l2+L.16+L.21
Revenue adjustment factor (Page I)
Adjusted revenue from rates (L.26.L.27)
Fees (Page 14)
Revenue from residual shape surcharge (Page 13)
Total Revenue (L.2a+L.29+L.30)
TYAR revenue per piece (L.31 I L.17)
la
19
20
21
(1)
Letters
Basic
per
High Density
per
Sahlration
per
Automated
per
Subtotal
Nonletters. Piece-Rated
Basic
per
High Density
per
Saturation
per
Subtotal
Nonletters. Pound-Rated
Basic
per
High Density
per
saturation
per
Subtotal
Revenue
per pound
per pound
per pound
pieces
+L.
4262.518
l.wow2
4262.527
33.08869
a.38682
4304.004
0. I 50038
Lines 5.9.13.14.15 from formula. page 19. Dropship discounts from Page 9
Other rates calculated by subtracting discounts (p.18) from Basic rates
fram formula.
Page 20, Cal (1.2.6 to 11)
(3)
source:
[I] USPS-T-36,
WPl,
page 23.
c-17