RECEIVELI
Jan12 3 03PM‘00
USPS-T-34
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON,
DC 20268-0001
POSTAL RATE AND FEE CHANGES,
2000
Docket No. R2000-1
DIRECT TESTIMONY
OF
MAURA ROBINSON
ON BEHALF OF
THE UNITED STATES POSTAL SERVICE
TABLE OF CONTENTS
Page
Autobiographical
Sketch.. ...........................................................................
I.
Purpose and Scope of Testimony
II.
Priority Mail Characteristics
III.
.-
...................................................
.3
.4
.............................................................
.4
A.
Service Description
...............................................................
.4
B.
Volume Trends.. ....................................................................
.6
C.
Rate History ..........................................................................
.6
Priority Mail Rate Design .................................................................
.7
A.
Overview.. .............................................................................
.7
B.
Development
of “Per Piece” Rate Element.. .........................
11
C.
Development
of “Per Pound” Rate Element.. ....................... .I1
D.
Emery Adjustment..
E.
One-Pound
F.
Rate Differential Between 2-, 3-, 4- and 5-Pound
Unzoned Rates.. ..................................................................
.I7
G.
Rate Constraints
..................................................................
.I7
H.
Base (Electronic)
Delivery Confirmation
..............................................................
Priority Mail Rate ..............................................
.I2
.I5
Service.. ................ .I8
IV.
Pickup Fees.. ..................................................................................
.I8
V.
Delivery Confirmation
.I9
Forecast ......................................................
LIST OF TABLES
Table
Table
Table
Table
1:
2:
3:
4:
Priority Mail Volume History .........................................................
Priority Mail Rate Changes (19851999)
......................................
Priority Mail Financial Summary.. ..................................................
Proposed Priority Mail Rates.. ......................................................
1
.5
.7
8
.9
LIST OF ATTACHMENTS
Attachment
A
Priority Mail FY 1998 Volume and Calculated
Revenue
Attachment
B
Priority Mail Test Year Before Rates Volume, Postage
Pounds and Calculated Revenue
Attachment
C
Priority Mail Test Year Before Rates Volume and Weight
Restated for One Pound Rate
Attachment
D
Priority Mail Test Year After Rates Volume, Calculated
Revenue and Postage Pounds
Attachment
E
Priority Mail - Emery Adjustment
Attachment
F
Priority Mail Test Year Before Rates Nontransportation
Development
Attachment
G
Priority Mail Test Year Before Rates Allocation
Transportation Cost to Zones
Attachment
H
Priority Mail Rate Development
Attachment
I
Pickup Fee Development
Attachment
J
Delivery Confirmation
W
Attachment
K
Priority Mail Final Adjustments
Cost
of
Forecast -- Priority Mail and Standard
2
Autobiographical
Sketch
My name is Maura Robinson.
Postal Service as an Economist
include development
proposals
I have been employed
by the United States
in Pricing since March 1998. My primary duties
of Priority Mail rate design, and analysis of postal reform
pending before Congress.
Prior to joining the Postal Service, I worked for the Baltimore Gas and
7
Electric Company from 1992 through 1998. From 1997 to 1998, I held the
6
position of Pricing Analyst with responsibility
9
the company’s
for preparing
gas rate filings with the Maryland
analyses supporting
Public Service Commission;
10
analyzing
natural gas pipelines’ FERC rate proposals
11
and preparing gas avoided cost and marginal cost studies.
12
was a Forecaster with responsibility
13
sales and peak forecast used in gas capacity planning.
14
included in the company’s
15
with the Maryland Public Service Commission.
16
1992-l 995 Fuel Price Forecasts which were included
17
Integrated
Resource
for preparation
annual Gas Purchase
Plan filed with the Maryland
19
Masters
of Arts degree in Economics
20
Economics
From 1992 to 1997, I
of the company’s
gas system
This forecast was
and Conservation
In addition,
Plan filed
I prepared BGE’s
in the company’s
electric
PSC.
I am a graduate of the University of Maryland
18
and their impact on BGE;
at College Park with a
and also hold Bachelor of Science in
and a Bachelor of Arts in French from Iowa State University.
3
1
I. Purpose and Scope of Testimony
2
My testimony
3
Mail. The proposed
4
cost coverage of 181 percent proposed
5
delivery confirmation
6
Express Mail, Priority Mail, and Standard
7
presents the Postal Service’s proposed
rates and classification
9
II. Priority Mail Characteristics
In addition, I project
and on-call
(B) mail pickups.
to this testimony
has been filed
A. Service Description
Priority Mail consists of letters, documents,
12
70 pounds.
13
part, as an extension of First-Class
14
send lighter-weight
15
including delivery confirmation
16
by witness Mayes.
An electronic version of the attachments
as LR-I-165.
11
changes for Priority Mail meet the
volumes and propose the fees for scheduled
8
10
rates for Priority
For pieces weighing
and packages
weighing
up to
more than 13 ounces, Priority Mail serves, in
Mail. Customers
also have the option to
pieces by Priority Mail to take advantage
and expedited
of service features
handling.
Priority Mail rates are unzoned for mail pieces weighing
more than five pounds.
up to five pounds
17
and zoned for mail pieces weighing
18
Postal Service provides a flat-rate envelope mailable at the two-pound
19
regardless
20
is applied to pieces weighing
21
minimum
22
the rate structure
of the piece’s actual weight.
In addition, the
rate
Currently, the minimum
Priority Mail rate
two pounds or less; this testimony
proposes a new
Priority Mail rate for pieces weighing one pound or less. The rest of
remains unchanged.
4
.-
Table 1
Prioritv Mail Volume History
Fiscal Year
Pieces
1970
1971
1972
1973
1974
1975
185
1976
1977
1978
1979
197
6%
6%
209
0%
222
206
6%
-7%
-7%
5%
5%
8%
8%
8%
192
31
202
213
41
229
248
1985
1986
308
330
354
405
437
471
518
530
584
664
770
1988(r)
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
I/ First-Class Mail weighing over
2/ Mail weighing over 12 ounces
31 Mail weighing over 13 ounces
1975.
4/ Mail weighing over 12 ounces,
5/ Mail weighing over 11 ounces,
II
21
208
1980
1981
1982
1983
1984
1987
1988
Annual
% Chanae
269
259
-4%
271
293
869
937
1,068
1,174
51
51
5%
8%
5%
7%
7%
14%
8%
8%
10%
2%
10%
14%
16%
13%
1%
10%
13 ounces and airmail weighing over 7 ounces.
and airmail weighing over 8 ounces, effective May 16,1971
and airmail weighing over 10 ounces. effective September 14,
effective May 29, 1978.
effective April 3, 1988.
r = Recast 1988 data and following years include penalty and franked with service categories.
5
1
B. Volume Trends
Table 1 presents historical Priority Mail volumes.
2
For the ten-year period
3
1989 to 1998, Priority Mail volumes grew at an average annual rate of 9.6
4
percent.’
5
recommended
6
Class Mail increased
7
12.4 percent of annual Priority Mail volume is projected to migrate to First-Class
8
Mai12.
9
However, as of January
and approved
10, 1999, with the implementation
in Docket No. R97-1, the maximum weight for First-
from 11 ounces to 13 ounces.
Priority Mail service competes
As a result, approximately
in the two- to three-day
document
11
United Parcel Service, Federal Express, Airborne and others; however, Priority Mail
12
does not necessarily
13
For example,
14
trace and other services that are not included with Priority Mail. In 1998, the Postal
15
Service’s estimated
18
five years, the Postal Service’s market share has remained relatively constant.
18
This market is competitive
package and
10
17
delivery market.
of the rates
with services also provided by
include all the product features of these competitors’
some competitors
offer guarantees,
free insurance,
products.
free track-and-
market share was 61.8 percent of all pieces, and over the last
C. Rate History
Priority Mail originated
with the merger of heavy First-Class
Mail and air
19
parcel post with the rate structure evolving from the air parcel post rates.
20
Priority Mail rates were zoned for all weight steps.
21
rates are unzoned.
Initially,
Today, the under-five-pound
This began with Docket No. R84-1, when the unzoned,
’ The relatively small growth rate in 1991 was due at least in part to the implementation
Docket No. R90-1 rates which increase Priority Mail rates by 19%.
’ USPS-LR-I-114. p. 8
6
of the
-
1
two-pound
2
Mail rates were unzoned for all rate increments
3
pounds.
4
service, and a presort discount were introduced.
5
was eliminated
6
service was implemented
7
portion of the service included in Priority Mail rates.
6
9
10
rate was introduced,
and continued
with Docket No. R90-1, when Priority
between two pounds and five
In addition, following Docket No. R90-1, the flat-rate envelope,
in January
pickup
The Priority Mail presort discount
1999 following Docket No. R97-1.
Delivery confirmation
in March 1999, with the cost of the base (electronic)
As a result of Docket No. R97-I,
5.6 percent with the two-pound
Priority Mail rates increased
rate increasing
from $3.00 to $3.20.
an average of
Table 2 shows
the average rate increase for Priority Mail resulting from the past five omnibus rate
11
Table 2
Priority Mail Rate Changes
19854999
P
Rate
Case
Implementation
gz&
Priority Mail
Rate Chanae
R84-1
R87-1
R90-1
R94-1
R97-1
February 17,1985
April 3, 1988
February 3.1991
January I, 1995
January 10.1999
0%
0%
19%
4.8%
5.6%
Two-Pound
Rate
$2.40
$2.40
$2.90
$3.00
$3.20
Ill. Priority Mail Rate Design
A. Overview
In designing
Priority Mail rates, test-year-before-rates
two categories:
non-weight-related
and weight-related.
costs are separated
into
The non-weight-related
costs are the basis for the “per piece” rate element, which is the same for all rate
.-
cells. The “per-pound”
rate element varies by zone and is based on the
7
Table 3
Priority Mail Financial Summary
Test Year Volume, Revenue and Cost
Test Year Before Rates
Attachment
Attachment
B, p. 3
B, p. 7
=(2)/(l)
USPS-T14
Workpaper
USPS-T9
Volume
Revenue at current rates
Revenue per piece
Test year before rates cost
1,356,715
$5,226$4;
(000)
(000)
$3,183,801
(000)
H, Table E
Contingency
TYBR cost with contingency
Cost per piece
Cost coverage at current rates
2.5%
$3,26;33$
(000)
160%
Test Year After Rates
Attachment D, p. 1
Volume
Attachment D, p. 5
Revenue at proposed rates
= (i) I (i)
Revenue per piece
USPS-T14,
Test year after rates cost
Workpaper J, Table E
USPS-T9
Contingency
Cost with contingency
=(I)*[1 +O@l
= (n) I (i)
Cost per piece
Cost coverage at proposed rates
= (k) I@)
Average rate increase before
=[ (k) - (4 I/ (c)
adjustments
Attachment
Attachment
I (t)
I (p)
USPS-T32,
32B
Exhibit
Pickuo
Revenue and Cost
-.
.
PICKUP revenue at proposea
rates
Pickup costs
Fee Revenue
1,249,750 (000)
$5,538&
(000)
$2.989.329
(000)
2.5%
$3,06W;;
(000)
181%
15%
$2,972 (000)
$2,888 (000 j
$795 (000)
Total Test Year After Rates
= (i)
= 6) + (r) + (t)
= !nJ :.(s.)
Total
Total
Total
Cost
volume
revenue
cost including contingency
coverage
I ,249,750 (000)
$5,542,259 (000)
$3,066,950 (000)
181%
A.
Table 4
Proposed Priority Mail Rates
Weight
UP
Flat Rate
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Zone
L,1,2&3
$ 3.85
3.45
3.85
5.10
6.35
7.60
7.85
8.05
8.15
8.30
8.40
8.65
8.90
9.15
9.40
9.65
9.90
10.15
10.55
10.95
11.40
11.80
12.25
12.65
13.05
13.50
13.90
14.30
14.70
15.15
15.55
15.95
16.40
16.80
17.20
17.65
Zone4
$ 3.85
3.45
3.85
5.10
6.35
7.60
8.00
8.40
8.80
9.20
9.70
10.35
11.00
11.65
12.30
12.95
13.65
14.30
14.95
15.60
16.35
17.05
17.75
18.45
19.15
19.85
20.50
21.25
21.95
22.60
23.30
24.05
24.70
25.40
26.05
26.80
Zone5
$ 3.85
3.45
3.85
5.10
6.35
7.60
8.15
8.70
9.25
9.80
10.45
11.35
12.15
13.00
13.80
14.65
15.40
16.25
17.05
17.90
18.70
19.45
20.30
21.10
21.95
22.75
23.55
24.35
25.20
26.00
26.85
27.60
28.45
29.25
30.10
30.90
Zone6
!$ 3.85
3.45
3.85
5.10
6.35
7.60
8.55
9.50
10.45
11.40
12.40
13.40
14.40
15.45
16.45
17.45
18.45
19.45
20.45
21.45
22.45
23.50
24.50
25.45
26.45
27.50
28.50
29.50
30.45
31.45
32.50.
33.50
34.50
35.50
36.45
37.50
Zone7
$ 3.85
3.45
3.85
5.10
6.35
7.60
8.85
10.10
11.35
12.60
13.75
14.80
15.90
17.05
18.15
19.25
20.40
21.50
22.65
23.75
24.90
26.00
27.15
28.25
29.35
30.55
31.65
32.80
33.90
35.05
36.15
37.30
38.40
39.55
40.65
41.75
Zone8
$ 3.85
3.45
3.85
5.10
6.35
7.60
9.45
11.30
13.15
15.00
16.85
18.15
19.60
21.00
22.45
23.85
25.30
26.75
28.15
29.65
31.00
32.40
33.70
35.05
36.35
37.80
39.10
40.45
41.75
43.05
44.40
45.70
47.10
48.40
49.70
51.05
Table 4 (Continued)
Proposed Priority Mail Rates
Weight
LJJ&
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
Zone
L,1,2&3
$18.05
18.45
18.85
19.30
19.70
20.10
20.55
20.95
21.35
21.80
22.20
22.60
23.00
23.45
23.85
24.25
24.70
25.10
25.50
25.95
26.35
26.75
27.15
27.60
28.00
28.40
28.85
29.25
29.65
30.10
30.50
30.90
31.35
31.75
32.15
Zone4
$27.50
28.20
28.90
29.60
30.30
30.95
31.70
32.40
33.05
33.75
34.50
35.15
35.85
36.60
37.25
37.95
38.65
39.35
40.05
40.75
41.40
42.15
42.85
43.50
44.20
44.95
45.60
46.30
47.05
47.70
48.40
49.10
49.80
50.50
51.20
Zone5
$31.70
32.50
33.35
34.15
35.00
35.75
36.60
37.40
38.25
39.05
39.80
40.65
41.45
42.30
43.10
43.90
44.70
45.55
46.35
47.20
47.95
48.80
49.60
50.45
51.25
52.05
52.85
53.70
54.50
55.30
56.10
56.95
57.75
58.60
59.35
10
Zone6
$38.50
39.50
40.55
41.55
42.50
43.50
44.50
45.55
46.55
47.50
48.50
49.55
50.55
51.55
52.55
53.50
54.55
55.55
56.55
57.55
58.60
59.55
60.55
61.55
62.60
63.60
64.55
65.55
66.60
67.60
68.60
69.60
70.55
71.60
72.60
Zone7
$42.90
44.00
45.15
46.25
47.40
48.50
49.65
50.75
51.90
53.00
54.10
55.30
56.40
57.55
58.65
59.70
60.85
61.90
63.00
64.00
65.10
66.20
67.25
68.40
69.45
70.55
71.60
72.70
73.80
74.85
76.00
77.05
78.10
79.25
80.30
Zone8
$52.35
53.70
55.05
56.40
57.70
59.00
60.35
61.70
63.10
64.40
65.75
67.05
68.35
69.70
71.00
72.40
73.70
75.00
76.35
77.65
79.00
80.35
81.70
83.00
84.30
85.70
87.00
88.40
89.70
91.05
92.35
93.65
95.00
96.30
97.70
1
weight-related
costs (primarily transportation)
2
Mail service
3
B. Development of “Per-Piece”
associated
with providing Priority
F
The per-piece cost is developed
4
non-transportation
by subtracting
total transportation
costs
5
and weight-related,
6
before-rates
7
below) is then made and the result is divided by volume to derive the per-piece
6
cost. This cost is increased for the contingency
9
determine
10
costs (2 cents per pound) from test-year-
total volume variable costs.
the “per-piece”
Total transportation
12
below).
13
distributed
14
1998 cost distribution.
15
and passenger
16
for non-distance-related
An “Emery adjustment”
(described
and the Priority Mail markup to
rate element.
C. Development of “Per-Pound”
11
P,
Rate Element3
Rate Element4
costs5 are adjusted for the Emery contract (described
The adjusted, test-year-before-rates,
between distance and non-distance
transportation
costs by mode are
related components
using the FY
Pounds and average haul by zone for the Eagle network
air transportation
are used to develop distribution
and distance-related
17
Non-distance-related
16
based on total air-pounds
19
distributed
20
multiplying total passenger
air transportation
by zone.
air transportation
air-pounds
costs.
costs are distributed
Distance-related
to zone based on air-pound-miles.
keys to zone
to zones
air transportation
Air-pound-miles
costs are
are calculated
by the average passenger
by
air haul by
3 Attachment F
4 Attachment G
’ Total air and transportation costs include the transportation components of: (1) An adjustment
for the Docket No. R97-1 classification change increasing the maximum weight of First-Class
Mail. and (2) an adjustment to add additional Priority Mail volume due to the existence of delivery
confirmation service. See Attachment K
11
I
zone. Non-distance-related
surface transportation
2
zones based on total postage pounds by zone.
3
transportation
4
surface-pound
5
subtracting
6
then subtracting
7
250-mile average haul. Zone 4 surface pound-miles
8
subtracting
9
result by a 350-mile average haul. The resulting distribution
costs are distributed
miles. Zone L, 1,2,3 surface pound-miles
Local, I, 2, 3 Zone air pounds.
are developed
The result is multiplied
are developed
by
surface transportation
by a
by
Zone 4 air pounds from total Zone 4 pounds and multiplying
11
the
of Local, 1, 2 and 3
is used to distribute distance-related,
cost.
Total distributed transportation
costs are then summed by zone and
13
divided by total postage-pounds
14
pound by zone. A two-cent, weight-related,
15
added to the total transportation
16
pound cost by zone. These per-pound
17
contingency
18
element by zone.
19
D. Emery Adjustment6
by zone to arrive at total transportation
non-transportation
cost per pound is
costs by zone are increased
and the Priority Mail markup to determine
and transportation
cost per
cost per pound by zone to arrive at the per-
In 1997, the Postal Service contracted
with Emery Worldwide
the processing
of a portion of Priority Mail volume.
22
costs are included in Cost Segment 16. Under its agreement
E
12
for the
the “per-pound”
21
’ Attachment
surface
total Local Zone pounds from the total Zone L, 1, 2, 3 pounds and
Zone and Zone 4 surface pound-miles
20
Distance-related
to all
to Zones L,l, 2, 3, and Zone 4 based on
10
12
costs are distributed
rate
Airlines for
These
with the Postal
1
Service, Emery is providing mail processing,
2
transportation;
3
“per-piece”
4
Emery as either “transportation”
5
aids contract administration,
6
surface transportation,
and air
however, the Postal Service’s contract with Emery is on a
basis that does not permit the Postal Service to identify payments to
or “non-transportation.”
While this simplicity
it presents a unique rate design challenge.
The Priority Mail rate design method used by both the Postal Service and
7
the Postal Rate Commission
assumes that all air and surface transportation
8
costs are readily identifiable
and reported in Cost Segment
9
Postal Service cannot readily identify air and surface transportation
10
incurred under the Emery Contract.
11
resulted in Emery costs being assigned to Cost Segment
12
traditional
13
transportation
14
assigned to the “per-piece”
15
structure would “flatten” as transportation
16
rate element instead of the “per-pound”
17
differential
rate design methodology
In addition,
14. However, the
USPS accounting
costs
practice has
16. Therefore,
if the
were applied blindly in this case, the
-c
16
costs embedded
in the Emery contract costs by default would be
rate element described
between a heavyweight
above.
The resulting rate
costs were assigned to the “per-piece”
rate element and the apparent cost
piece and a lightweight
piece was reduced.
The Postal Service is currently evaluating the Priority Mail processing
19
network and has not decided how it will be configured
in the future.
20
for the purposes of this rate case, the cost studies assume that the current
21
network configuration
22
exists in the test year.
However, given the uncertainty
23
network configuration,
it is not clear that costs following the test year will continue
(10 PMPC sites located in the Northeast
13
As a result,
and Florida)
surrounding
the future
1
to be incurred as the Postal Service is currently projecting for the test year. For
2
example, an expansion
3
structure) would result in an increase in “per-piece”
4
substitution
5
in a reduction
6
extended,
7
“per-piece”
6
Emery, or other vendors seeking to provide service in the existing or an
9
expanded
of the Emery network (assuming
of Postal-contracted
in “per-piece”
transportation
costs.
the current contract
costs.
Conversely,
for the Emery network may result
Lastly, even if the Emery contract were to be
it is not clear that costs would continue to be incurred on a strictly
basis.
In contract negotiations,
any party-the
Postal Service,
PMPC network -- might propose a contract structure that would
10
directly identify transportation
11
contracts could incorporate
12
contract structure or the Postal Service’s cost segment structure.
13
a
In designing
and non-transportation
costs.
Alternatively,
future
novel features that do not parallel either the Emery
Priority Mail rates, I attempted
to reconcile two factors:
(1)
14
the Postal Service is incurring costs (at least in the short run) on a less weight-
15
related basis; and (2) the Emery PMPC network is a test program.
16
rate-making
17
Segment
16
difference
19
year Emery costs to Cost Segment
20
Segment
21
allocated to air and surface transportation.
22
the Emery contract, total Priority Mail volume variable costs are less distance-
23
related by retaining a portion of the Emery costs in Cost Segment
adjustment
The Emery
does this by assuming that the Emery costs in Cost
16 remain at the same level as in the base year and reallocating
(based on base year proportions)
14 (Transportation).
between
the test year and the base
3.1 (Mail Processing
Direct Labor), and Cost
The allocation to Cost Segment
This adjustment
14
the
14 is further
recognizes
that, with
16. In
addition, the reallocation
of costs to Cost Segment
contract, in part, substitutes
for air and surface transportation
would have been purchased
/--
that the Emery
that othewise
by the Postal Service in a more traditional
The Emery adjustment
A
14, recognizes
manner.
mitigates the impact of the PMPC test program on
5
Priority Mail rates. It takes a gradual approach
6
specific change in costs, is consistent
7
designed to avoid dramatic changes in Priority Mail rate design and the potential
8
effects on Priority Mail customers.
9
uncertainty
surrounding
with Commission
This is necessary
potential effect of unknown
11
Mail.
12
E. One-Pound Priority Mail Rate
precedents,’
and the
network changes on the cost structure of Priority
14
Commission
15
maximum First-Class
16
participants’
17
with a large gap particularly
18
would otherwise
19
address this concern, the PRC recommended
20
subsequently
arguments
and is
given the degree of
In its Docket No. R97-1 Opinion and Recommended
expressed
a contract-
the future Priority Mail network configuration,
10
13
to incorporating
concern over the rate differential
Decision, the
or “gap” between the
Mail rate and the minimum Priority Mail rate. Several
during Docket No. R97-1 focused on the equity concerns
for those customers
be heavyweight
implemented
who were obligated to mail what
First-Class Mail pieces at Priority Mail rates. To
and the Postal Service
an increase from 11 to 13 ounces in the maximum
’ See Docket No. R94-1, PRC Op. at V-37, para. 5119 where the Postal Rate Commission
accepts a revision to the treatment of air transportation costs proposed by Nashua/District witness
Haldi and mitigates the impact of this rate design change “[t]o avoid severe rate impact and
potential market dislocations.
_”
15
1
First-Class
Mail weight.’
While the Docket No. R97-1 change in the maximum
2
weight for First-Class
3
rates and Priority Mail rates, the underlying
4
addressed.
5
ounces) when mailers move between
6
cost structure of the two mail classes.
7
maximum First-Class
8
long-term
9
pound Priority Mail rate would reduce the weight step between
Mail directly addressed
the “gap” between
First-Class
causes of the problem have not been
This problem results from the large weight step (currently
While a sequence
in the
of changes in the
Mail weight will, to some extent, mitigate the problem, a
solution must address the specific causes of the problem.
11
the underlying
12
design by adding a one-pound
13
cost of providing a heavy-weight,
14
providing a light-weight,
15
can be used to choose a breakpoint
16
smooth transition
17
am proposing
ja
lower than the proposed
cost of the incremental
weight step. Obviously,
First-Class
reduction
in
changing the rate
Mail piece versus the cost of
However, appropriate
rate design
between the two classes that will result in a
between the cost structures
that the rate for a one-pound
$3.85, two-pound
of the two classes.
Therefore,
I
Priority Mail piece be $3.45, $0.40
Priority Mail rate.g
Priority Mail rate is $0.35 greater than the First-
20
Class Mail rate ($3.10) for a 13-ounce
21
this additional
$0.35, a customer
Mail
Priority Mail rate does not change the relative
Priority Mail piece.
one-pound
A one-
First-Class
and Priority Mail from 19 ounces to 3 ounces with a corresponding
The proposed
19
the two classes and the differences
10
19
Mail
piece proposed
receives considerable
by witness Frank.”
additional
service.
For
The
a See Docket No. R97-1, PRC Op. at 338-339.
’ The Priority Mail flat-rate envelope provided by the Postal Service would continue to be priced at
the two-pound rate.
” USPST33, Attachment A.
16
1
customer can mail an additional three ounces (compare to the proposed
2
Class Mail additional ounce rate of $0.23”)
3
transportation,
4
with First-Class
5
alternative
for customers
mailing documents;
6
alternative
for First-Class
Mail customers who wish to “buy up” to Priority Mail
7
service.
8
F. Rate Differential
9
/-
receives expedited handling and
and can purchase delivery confirmation,
Mail.12 In addition, the one-pound
a service is not available
rate provides an attractive
and provides a lower-price
Between 2-, 3-, 4- and 5- Pound Unzoned Rates
Once the l-pound
and 2-pound rates were set, the rate increment
10
between the 2-, 3-, 4- and 5-pound unzoned
11
rate increment for unzoned Priority Mail is consistent
12
decisions13 and results in a relatively simple rate structure.
13
the even rate increment
14
that significantly
15
G. Rate Constraints
16
rates was set at $1.25.
with prior Commission
In addition, adopting
between rate cells.‘4
The uncertain future of the Priority Mail network configuration
significant changes
18
undesirable
19
For example,
A uniform
in this case furthers my goal of mitigating rate changes
disrupt the historical relationships
17
First-
makes
in relative rates within the Priority Mail rate schedule
and may increase the number and size of rate fluctuations
over time.
by mitigating the impact of the Emery contract on rates, the Postal
” USPS-T33, Attachment A.
‘*The proposed SO.35 rate differential is within the range of “gaps” implied by recent Commission
Recommended Decisions. In its Docket No. R94-1 Recommended Decision, the Postal Rate
Commission recommended rates that resulted in a “gap” of $0.38 ($3.00 two-pound Priority Mail
rate less $2.62, 1 l-ounce First-Class Mail rate). Adjusted for inflation, this rate differential would
$ higher in current (2000) dollars.
Docket No. R94-1, PRC Op. at V-40. Docket No. R97-1, PRC Op. at 367.
‘4 In future rate proposals, following a full evaluation of and decision on the future Priority Mail
network configuration, the desirability of even rate increments may need to be re-evaluated.
17
1
Service will be able to fully evaluate the operational
2
network configurations
3
unique features of the current contract into rates.
Therefore,
4
without being constrained
by having fully incorporated
(from the current rates) is constrained
6
average rate change for Priority Mail as a whole.
7
rate cells, the smallest increase,
8
approximately
9
were rounded to the nearest five-cent increment.
to be within a 5 percent band around the
as compared
As a result, for the unzoned
to the current rates is
10% and the largest increase is approximately
H. Base (Electronic) Delivery Confirmation
Consistent
11
with the Commission’s
20%. All rates
Service
treatment
of delivery confirmation
12
Docket No. R97-1 Recommended
13
delivery confirmation
14
costs.
15
costs have been increased
16
am proposing that base (electronic)
17
included service for Priority Mail with a zero additional
18
IV. Pickup Fees
19
the
to maintain the current relative rate structure, the rate change
5
10
feasibility of alternate
in its
Decision, the costs for the base (electronic)
service for Priority Mail have been included in Priority Mail
Like all other Priority Mail costs, base (electronic)
by the contingency
delivery confirmation
and the Priority Mail markup.
delivery confirmation
service remain an
charge.15
Pickup service is available for Express Mail, Priority Mail, and Standard
20
(B) service on an on-call or scheduled
basis. The current fee is $8.25. The
21
average cost per stop for each option is developed
by witness Campbell”.
“Witness
Mayo (USPS-T39) proposes the fee for Priority Mail manual delivery confirmation
sp-vice.
USPS-LR-I-160, Section I, p. 1
18
I
1
In Attachment
I, I develop a weighted
average cost based on the test year
2
estimated
3
Parcels.
4
each pickup stop yielding a 105% cost coverage.
5
consistent
6
percentage
7
V. Delivery ConfirmaGon Forecast -- Priority Mail and Standard (B)
.P
8
9
.-
number of stops for Express Mail, Priority Mail, and Standard
The weighted
average cost is $10.01.
with cost coverages
I propose a fee of $10.25 for
The low cost coverage is
from prior cases and is justified due to the large
increase required to cover the estimated test year cost.
I project delivery confirmation
Standard
(B)
volumes associated
(B) based on FY 1999 delivery confirmation
with Priority Mail and
program scanner data and
10
the adoption curve proposed
by USPS witness Sharkey in Docket No. R97-1 and
II
accepted
12
throughout
13
March 14, 1999.”
14
purposes of projecting
15
employed
16
of total delivery confirmation
17
In the test year, 2001 or Year 3, the adoption curve projects that 50 percent of
18
the potential market will have adopted delivery confirmation.
19
Attachment
20
adoption curve for Priority Mail electronic
by the Commissioni7.
Delivery confirmation
service was available
FY ‘I999 during both a pilot program and was fully implemented
Therefore,
on
FY 1999 is assumed to be “Year 1” for the
delivery confirmation
in Docket No. R97-I”,
volume.
Using the adoption curve
Year 1 volume is projected to be 11.92 percent
volume once the program has been fully adopted.
J, delivery confirmation
volumes are separately
As shown in
projected
using the
and retail delivery confirmation
service
” Docket No. R97-1, PRC Op. at 359.
” Delivery confirmation service was available for Priority Mail customers who electronically
manifest during the pilot period. Retail service and Standard (B) service began with the
implementation of rates on March 14, 1999.
” Docket No. R97-1, USPS-33R, p. 6-8.
19
1
and for Standard (B) electronic
and retail delivery confirmation
service.
In the
-1.
2
test year, 177 million Priority Mail and Standard
3
transactions
4
are projected
(B) delivery confirmation
to occur.
Customers find delivery confirmation
to be an important value-added
5
service and expect it to be included at no additional
6
managers
7
has been instrumental
8
Service cannot readily identify which new Priority Mail customers
9
purchase
have suggested
cost. Some account
that the availability of delivery confirmation
in making sales to new customers.
service
While the Postal
decided to
Priority Mail solely due to the availability of delivery confirmation,
10
believe that the availability
of delivery confirmation
11
in Priority Mail volumes that would not have occurred in the absence of the
12
delivery confirmation
13
marketplace
14
and trace) that are offered by competitors.
15
availability of delivery confirmation
16
services available in the marketplace,
17
Musgrave’s
18
growth rate for Priority Mail by 1% in 2001.
19
million pieces of Priority Mail in the test year before rates.
20
final adjustments
service.
However,
I
will result in additional growth
Priority Mail exists in a dynamic
and does not offer the range of value-added
Therefore,
and tempered
services (such as track
due to the relatively recent
with a recognition
I have conservatively
of the other
increased witness
projected Priority Mail volume by 1% in 2000 and increased the
to projected
This results in an additional
I have also calculated
costs based on these additional volumes.
20
25.6
-.
.-
2
3
4
ZQCd
0.m
0.72
1.43
3.00
4.W
ml
6.W
7.w
z-.
.-
,
8
?
...
-
-
-
.”
.-
J
,_“-.-I-,.. -
.- ^. _ ---__-
-._^..~l.-l
..,...
-”
)
-
-
:
:
(a)
(b)
(C)
Cd)
E
(9
(0)
w
(iI
0)
(k)
(1)
(ml
= CC)* I(h) - 11
= (C) * (i,
= w * 0)
3.183.801 (000)
795.713
WJ)
2.387.088 (000)
0.020000
2.625.234 (000)
52,505 (000)
8
2.334.584
vl4.029)
2.230555
2.5%
2.266.319
l&%0%
4.206,827
(000)
(000)
(000)
1.356715
(000)
1.685188
3.100746
(000)
(000)
T~“*partaEO”
costs (om]
Air Transportation
surface TranSprlatio”
TOtal
SCUFWs:
3
TOM L123
4
5
6
7
8
Total
zone
1
2
3
TOtal L123
4
5
6
7
8
TOtal
(W
68.806
36,223
104.029
T&l
Tranapo”ado”
CostJ VW
CC)= (a) + (b)
571.805
328.936
900.741
Distance Related
Percentage
(d)
46.60%
56.70%
usPs-T14. wc%TJaper H, Table D + Attachment K. 6 (C,
Attachment E
LR-I-60. pp. g-10
(3
W
(4
IB, Air Tra”*W*UO”
w
502.999
293.713
796.713
Emery
Adjusbnent (oco)
costs
4.495
4.545
19.702
39.899
25.167
14.168
34,870
136.352
0
63 = w + (Cl
Pwnds
-fmQL
CC)
352
3,579
24,222
28.153
229
470
805
,490
1576
2313
309.791
1,057.040
Piir cortr 0330,
(9
352
Mel Low,
(91 = (Cl * Cd)
Average
H$g
Cd)
46
m
239
2504
Air casts two)
(h)
costs ,wo,
0) = I9 l 03
1.113
9.434
12.514
37.902
34.144
41.941
140.016
267.629
54.764
115.690
81.530
82.651
227.716
571.805
15.798
3.629
28.717
32.698
8,320
368.675
5.,95.564
6.170.037
166.118
305.704
186.222
159.990
344,660
1.,96,39,
42.270
77.788
47.385
40.710
87.701
304.175
69.343.925
210.022.876
f*g.202,263
232404.284
775.e.58.38,
1,483,W,.,,3
Dhta”W
R&ted
costs (000)
(e) = CC)* Cd)
267.629
186.492
454.121
Non Distance
R&ted
costs (000)
(9 = m-w
304.175
142.445
446.620
Atmhme”, G
page2of3
,C, Surface Tnnswrtatio”
TOM
Postage
ZO”Z?
L. 1.2.3
4
5
6
4
8
TOtal
ZO”e
L. 1.2.3
4
Total
Pounds 1000,
Costs
Non Distance
Related
surface costs ,000,
(a)
1.047.369
356.771
407.822
244.308
169.217
379,747
2,625.234
Total
Postage
Pounds 1000)
w=(a)
1.047,369
356,771
1.404141
(b)
56.830
19,356
22.128
13.256
10.267
LOCal
Postage
Pounds (000,
w
129,375
Non-Local
Postage
Pounds ,000,
(e) = (Cl. w
917.994
356.771
1.274.766
Air
Postage
Povnds ,000,
(9
32,698
166.118
196.816
SUFf8face Average
Postage
SU&face
Pou”r,s ,ooa
&gJ
+a) = @A- 0
(h)
250
665,297
350
190,653
1.075.950
TOtal
S”*cePo”“d
f&!&mQ)~
(0 = (s) * (h)
221.324.159
SS.728.619
288.052.778
Sources
(a) Attachment S. p. 5
(b) Surface “on-distmce related msts (Attachment G, p. 1. A(f) disbibtied on column (a)
(d, Total Zone L.1.2.3 Postige Pounds- Local Share (R97-1, PRC Lib Ref - 12. p. 2)
Local Sham = 59.543,062 (local postage pounds) I482.037.098 (total L.f.2.3 pestage pounds) fro,,, R90.,
(1) Attachment G. p. 1, S(e)
(h) R97-1. PRC Lib Ref - 12. p. 3
0) Surface distance related costs (Attachment G, p. 1. A(e)) disttibuted on column (i)
Distance
Related
SUIWX
(i)
143,290
43.202
186.492
?
Allocation
ID) Total Transxwtation
TOtal
Distance
Total
Non-Distance
Air
Air
costs ,000)
costs ,000,
SUrfaCe
costs ,000)
(a,
L. 1.2.3
4
5
6
4
8
TOtal
L. 1.2.3
4
5
.-
304.175
267,629
142,445
186.492
248.321
soo.741
TOW
Transpoltation
cast per
Postage
Pounds (0001
&!!g
(4 =:(9/(s)
(9)
1.047339
$
0.200076
0.328905
356.771 $
407.822 0
0.337938
0.387977
244.308 9
189.217 $
0.491067
0.653912
379.747 $
5
L. 1.2.3
4
5
6
4
8
$
$
$
$
$
(a)
(b)
(c)
(d)
(g)
(i)
(I)
W=lal+W+@)+(d)
209,554
117,344
137,818
94,786
92.918
248,321
900.741
Nontransportation
TOtal
cost per
Pound
U=(hl+(i)
VI
$
$
8
$
$
$
0.020000
0.020030
0.020000
$
$
$
0.348905
0.357938
0.020coO
0.020000
$
$
0.407977
0.511067
0.020000
$
0.673912
2.625.234
TOtal
cost per
&@
(4 = 01
0.220076
0.348905
0.357938
0.407977
0.511067
0.673912
costs ,000,
(*I
143.290
43.202
8
Transportation
costs 1000,
w
56,830
19,358
22,128
13.256
10.267
20;605
94.786
92.918
TOW
SUrfaCe
1.113
12.514
37.902
34.144
41.941
140.015
6
4
TOtal
@I
T&l
Distance
8,320
42,270
77.788
47,385
40,710
87,701
TOW
Transportation
Costs 1000)
(0 = @)
209.554
117.344
137.818
zone
Attachment G
page 3 Of 3
Costs
Non-Distance
zone
Priority Mail
of Transpoltation
Costs to Zones
Test Year Before Rates
TOtal
Cost per Pound
Continaencv
0)
2.5%
2.5%
2.5%
2.5%
2.5%
2.5%
Attachment G, p. I, B(f)
Attachment G, p. I. B(h)
Attachment G. p. 2. C(b)
Attachment G. p. 2. C(i)
Attachment 6, p. 5
R97-1. PRC Lib Ref-12, p. 2
USPS-T9
Target
cast
ilncl. Contiaencv)
(m)=(k) * [l+(l)1
$
$
$
$
5
5
0.225578
0.357628
0.366886
0.418176
0.523844
0.690760
Per Pound
Rate
Coveraae
Element
(“)
184.0%
184.0%
184.0%
184.0%
184.0%
184.0%
$
$
$
$
$
5
(01 = (m) * (“1
0.415J364
0.658035
0.675071
0.769444
0.963873
1.270998
,-
-.
Priwity Mail
Unzoned Rates
(A) Two-Pound
and Flat Rate Envelope
(a) Attachment I,. p. 4
(b) Attachment H, p. 3
(c)
= (a) / (b)
Attachment H
page5of9
Rates
Test Year After Rates Cakulated Rewnue
Test Year After Rater Preliminary Volume
Average Revenue per Piece
a 1.964.9*4,3*9
467.937,683
4.026751
6
Set 2 pound rate:
(B) OnePound
$
3.65
Rate
(a) Attachment H. p. 4
(b) Attachment H. p. 3
W = (a) 1 (b)
Test Year After Rates Calculated Revenue
Test Year After Rates Preliminary Volume
Average Revenue per Piece
$ 1.616.627.785
461.227.663
3.505054
6
Set 1 pound rate:
(C, Three- to Five-PW”d
Weight
tmJ~S)
3
4
5
TOM
6
3.45
3
1.25
Rates
l-YAR
“Ol”nw
(a)
147.734.151
63.651.600
31.261.116
242847,069
Calculated
Revenue
$
3
$
(b)
757.736345
375,231.963
206,766.119
1.339.733.426
Average Revenue
per PiBCB
(c) = (W(a)
%
5.1293534
$
5.6766074
$
6.6141307
Sources:
(a) Attachment H. p. 3
(b) Attachment H. p. 4
(d)
Set Rate increment for 3- to Spound pieces
Weight
(pounds)
3
4
5
Total
TYAR
“ol”me
w = (a)
147.734,161
63.651,600
31.261.116
242347.066
Rate
(fl
$
$
0
5.10
6.35
7.60
Calwlated
RWe”“e
(a = w * m
a
753444.171
6
405.456.932
$
237,564.496
1.3S6467.598
m:
Attachment
H,P.6
id; =(a)+(b)+@)
(0 = Cd)’ W
(Q) USPM(I
67) = (f!*ll+(Q,l
6) =m)l(dl
ti)
-
(0)
(PI
m
(0
= @) * w
= (e) * 0)
=(e)-(m)
= (0) + 09 + @I
(S)
(0
(u)
w
= 0). (k)
= Ia* (II
= ti) * cm)
= !S) + 01 + (9
w
= w I (0
I 9252.334
2.5%
s 9,483.642
P--
wK2 API FY99
WK3 API FY93
WK4 API FYQ9
WKI AP2 FY99
wK2 AP2 w99
WK3 AP2 FY99
WK4 AP2 FY9Q
WKI AP3 FYQQ
wK2 AP3 FYQQ
WK3 AP3 FYQQ
WK4 AP3 FYQQ
WKI AP4 FYQQ
wK2 AP4 FYQQ
WK3 Am FYSS
WK4 AP4 Fy99
WKI AP6 FWQ
wK2 AP5 FY99
WK3 AP5 FY99
WK4 AP6 FYQQ
WKI AP6 FYQQ
wK2 AP6 FY99
WK3 AP6 Fy99
WK4 AP6 M99
WKI AP7 FYQ9
wK2 AP7 FY99
WK3 AP7 FY99
WK4 AP, FY99
WKI AP6 FYQQ
WKZ AP8 FmQ
WK3 AP6 FY99
WK4 AP8 wg9
WKI APQ FY99
WK2 AP9 FY9g
wK3 APQ Fag
WK4 APQ FY9Q
WKI API0 FYQQ
WKZ AP,rl FW9
WK3 AP10 FY99
WK4 API0 FYQQ
WKI AP, 1 FY9Q
wK2 API 1 FY99
WK3 API 1 FYQQ
WK4AP11 FYQ9
WK, AP12 FYQQ
WKZ AP,* FYQQ
WK3AP12 Fe-9
WK4 AP12 Fe9
WKI API3 FYQQ
WK2 API3 FYQQ
WK3 API3 FYQ9
“OI
pric
3ectro”iC
405.6
269.3
366.2
266.5
336.6
366.6
603.4
613.2
626.3
257.7
416.1
417.5
450.4
466.3
619.9
438.2
403.6
466.4
467.1
488.6
559.8
593.8
670.3
506.2
549.0
541.9
938.4
626.6
503.6
411.3
607.4
537.2
690.6
580.0
430.2
543.4
523.3
557.1
665.2
676.1
690.4
697.9
620.9
me k,
(a)
%h22.6%
9.3%
25.4%
16.0%
16.7%
l&O%
17.9%
26.9%
350.6
427.2
319.4
384.2
25
L
-
,withAm
Mail
Retail
28.6
26.9
22.1
324.6
372.0
386.3
334.7
327.3
346.3
384.9
355.1
342.6
356.2
309.6
368.5
389.6
367.6
366.6
333.8
411.1
399.2
434.6
432.6
450.0
437.0
464.0
467.0
412.6
9944.6
I
0.0
0.0
0.0
0.0
0.0
0.0
2.7
2.8
1.8
31.8
14.3
12.7
2.7
1.7
3.5
5.9
6.3
2.7
89.1
(a, Delivery contirmation Program ScannET Data
(b) De&q Con‘imtion Program Scanner Data
(c)=@l/[l-(b)l
21.1
18.3
18.4
18.7
16.1
18.1
17.5
16.0
15.3
17.9
17.6
16.4
IQ.6
16.8
19.3
19.8
21.3
21.6
21.7
22.5
23.1
24.4
IQ.9
624.3
6.6%
13.9%
23.2%
13.2%
46.1%
27.4%
12.8%
11.8%
13.6%
6.2%
6.6%
13.0%
9.2%
13.8%
15.4%
10.7%
11.8%
8.0%
4.0%
8.9%
12.5%
6.5%
10.0%
10.6%
10.7%
13.8%
14.9%
14.6%
,0.6%
10.5%
10.0%
9.8%
16.6%
12.6%
15.5%
10.3%
6.1%
7.6%
5.6%
6.1%
7.3961
I
21.45
24.05
13.85
12.15
12.59
13.25
13.501
14.59
18.65
17.65
16.69
13.65
19.65
18.85
21.35
26.35
21.15
21.05
38.15
23.14
22.25
20.74
22.35
20.64
18.09
18.63
prio
ilectPl”k
451.3
347.7
427.9
357.1
403.0
447.6
427.7
52u.3
449.3
441.5
467.0
425.7
656.5
706.4
979.7
354.9
476.9
473.6
621.5
528.4
556.6
503.9
444.8
5408
540.1
547.3
634.7
646.4
594.0
499.2
577.3
667.2
602.1
602.2
676.6
613.3
591.6
461.7
567.3
600.4
555.4
643.1
509.9
621.7
618.9
620.6
672.6
721.1
722.7
732.6
742.9
669.5
29119.5
L
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
413.2
489.5
447.1
397.6
362.4
377.1
402.7
450.0
436.1
415.7
427.2
380.3
458.6
479.7
467.6
624.1
422.9
620.2
6446
586.2
656.2
587.6
662.6
565.9
584.6
506.1
12449.9
A
Standan
Electm”k
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
3.0
3.2
2.2
364
17.0
14.2
2.9
1.9
3.7
6.3
6.7
3.0
100.3
656.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
36.4
35.4
25.7
24.0
20.9
21.2
21.6
21.1
22.3
21.2
21.6
18.8
22.2
21.7
23.4
26.6
20.1
24.4
32.0
27.6
27.7
27.4
29.0
29.2
29.8
24.4
Oelttery
(A) Estimated
Delivery
Fiscal
Ye&V
Year
Calculated adoption curve from R97-I.
FY 1999: delivery confination
program
FY 1999: deliwy confirmation program
FY 1999: delivery confirmation program
FY 1999: delivery mnfirmation program
(6) Additional
Priority
Test Year Before
0)
29,119
65.698
122.142
USPS-33R. p
smnner data.
scanner data.
scanner data.
scanner data.
66.
FY
FY
FY
FY
w
12.450
26.069
52.221
FY 1999
2001: (b)
2001: (c)
2001: (d)
2001: (e)
TOtal
T~WdCtiWlS
Standard (5)
Retail
Electronic
Cd)
@)
100
226
421
656 (9 = (b) + (-3 + (d) + (e)
42,326
95,494
177.536
1,460
2,752
is assumed to be Year 1.
= [ (b) FY 1999 / (a) FY 1999
= [ (c) FY 1999 / (a) FY 1999
= [ (d) FY 1999 / (a) FY 1999
= [ (e) FY 1999 / (a) FY 1999
] * (a)
] * (a)
] * (a)
] * (a)
FY
FY
FY
FY
2001
2001
2001
2001
Mail Volume
Rates
Assumed Additional
Growth:
Befrxe Rates
Priority Mail
Forecast
2000
2001
Priority Mail
Retail
Electronic
(8)
11.92%
26.89%
50.00%
FY 2000
FY 2001
Attachment J
page 2 of 2
Forecast
Transactions
AdqJtiM1
Percentage
FY 1999
1
2
3
(a)
(b)
(c)
(d)
(e)
Confirmation
Confirmation
1% per year
Incremental
Volume
63
1.217.641
1.331,105
W,2 ,76
25,609
Adjusted
Before Rates
Priority Mail
Forecast
W = (a) + (b)
1229,818
1.356,715
sources:
(a) USPS-T8, Table 1. p. 6
(b) Assumed additional volume of 1% in 2000 and 1% additional
growth in 2001 due to delivery confirmation
Test Year After Rates
m
(9) = K9/ W I’ (‘4
NAR
TYBR
NBR
NAR
W = (d) + (9)
Adjusted NAR
(d) USPS-T6, Table 1, p. 6
(e) USPST8, Table 1, p. 6
(9 Attachment J, (B) (b)
Volume (without delivery confirmation
Volume (without delivery confirmation
Delivery confimlabon adjustment
Delivery Confirmation Adjustment
Ptiolity
Mail Volume
adjusbnent)
adjustment)
1.226.160
1.331.105
25.609
23.590
(000)
(000)
(000)
(000)
1.249.750
(000)
(a,
lb)
w
(a
w