i! Ec c I ‘4i 11
OFFICE OF THE SECRETARY
POSTAL RATE COMMISSION
WASHINGTON,
D.C. 20268-0001
POSTAL RATE AND FEE CHANGES,
2000
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Docket No. R2000-1
AMERICAN
BANKERS
ASSOCIATION
AND
NATIONAL
ASSOCIATION
OF PRESORT MAILERS
SECOND SET OF
JOINT INTERROGATORIES
TO USPS WITNESS MILLER
(ABA&NAPiVIlUSPS-T24-25-29)
(March 17, 2000)
Pursuant
Commission,
Mailers
to Sections 25 and 26 of the Rules of Practice of the Postal Rate
the American
Bankers
Association
hereby submit these joint interrogatories
The instructions
included
with interrogatories
2000) are hereby incorporated
ABA&NAPM/USPS
and the National
and requests for production
ABA&NAPMAJSPS-T24-1-24
of documents.
(February
1998 CRA’s please describe for each year’s CRA, all
from the immediately
which changes affected First Class costs and Standard
previous
A Commercial
year’s CRA,
costs.
T24-26
Under your new methodology
in this case, unit mail processinwt
First Class letters,
over basic, by comparison
1 (0.89 cents in this case, 0.77 cents in R97-I),
avoidance has risen for
with USPS estimates
but has fallen for 5 digit presorted
in R97-
letters,
over basic, (1.0850 cents in this case, 1.5212 cents in R97-1).
a.
18,
by reference.
changes which were made in methodology
3 digit presorted
of Presort
T 24-25
For the 1995 through
ABA&NAPM/lJSPS
Association
How does this discrepancy
cost avoidance is shrinking?
comport with your generalized
conclusion
that
b.
Does your view that cost avoidance is shrinking
focus on just mail processing
cost avoidances?
c.
If your answer to b. is other than an unqualified
delivery
cost avoidances
numbers
are shrinking
for any of the following
workshared
“Yes.“, please explain
by comparison
where
with USPS R97-1
three rate categories of First Class
letter mail: basic automation,
automation
3 digit. automation
5
digit.
ABA&NAPM/IJSPS-T24-27
a.
Please confirm
Appendix
that your Column (l), Mail Processing Total Unit Cost from your
I, page I-l, table “First-Class
methodologically
as USPS witness
Letters
Hatfield’s
Summary”,
is the same
column (4), page 1, of Exhibit
USPS-
25A from R97-1, labeled “Total Cost” (copy attached).
b.
If you do not confirm in a., please answer only sub-part
T24-28 below, and please explain
or non-model,
C.
b. of ABA&NAPM/USPS-
here in full detail by cost pool or other factor, model
exactly what the differences
methodologically
consistent
If you do confirm
in a., please answera
are, and do this in a manner which is
with the Hatfield
numbers
sub-parts
from R97-1.
to the ABA&NAPM/USPS-T24-28
below.
ABA&NAPM/USPS-T24-28
a.
Please confirm that using USPS witnesses
Hatfield’s,
Hume’s, and Daniel’s
from R97-1 for both that case and this case, total cost avoidances
have increased
from 5.698 cents in R97-1 to 6.2170 cents in R2000-1 for a basic automation
Class letter,
and have increased
First Class automated,
methods
First
(over basic) from 0.8301 cents to 0.9850 cents for a
3 digit letter.
b.
Please confirm that using USPS witnesses
from R97-1 for those cost avoidances,
avoidances
In creating
basic letter has increased
a new methodology
under the R97-1 methodology,
had increased
methods
and your new methods for R2000-1 cost
for measuring
3 digit letter over
from 0.8301 cents to 0.9850 cents.
cost avoidance
letters in this case, were you at all knowledgeable
d.
Hums’s, and Daniel’s
that: (i) the cost avoidance for a First Class automation
a First Class automation
c.
Hatfield’s,
for basic automation
of or did you suspect the fact t,hat
cost avoidance of First Class automation
basic letters
by over 0.5 cents since the last rate case?
If your answer to c. is in the affirmative,
at all influenced
in creating
by the increase in cost avoidance
your new methodology,
wore you
noted in c.?
ARA&NAPMiUSPS-T24-29
Please refer to the attached
table, which reproduces
the cost pools used for estimating
unit
mail processing costs in this case and in R97-1. The items in the four boxes are different
categorizations
a.
as between the two cases.
For each of the 42 cost pools which have identical
labels as between the two
rate cases, please define each one and state whether
same operations
operations
or work activity
are identical
pool has been provided
or a citation
b.
it entails
exactly the
as between the two rate cases.lf
for both cases, and a detailed
in an existing
to it if it is publicly
reference,
explanation
the
of each cost
please provide that reference,
available.
Please define for R2000-1 cost pools 43 and 44, and state how they differ from
cost pool 43 in R97-1.
C.
Please define for R2000-1 cost pools 45-52, and state how they differ from cost
pool 46 in R97-1.
d.
For R97-1 cost pools 43-45, please explain
in R2000- 1.
3
why these categories
do not appear
Respectfully
submitted,
AMERICAN
NATIONAL
BANKERS ASSOCIATION
ASSOCIATION
OF PRESORT MAILERS
By:
I
Henry A. Hart, Esq.
Reed Smith Shaw & McClay LLP
1301 K Street N.W.
Suite 1100 - East Tower
Washington, DC 20005
Ph: 202-414-9225
Fax: 202-414-9299
Irving D. Warden
Assoc. General Counsel
American Bankers Association
1120 Connecticut Ave., NW
Washington, DC 20036
Ph: 202-663-5035
Fax: 202-828-4548
Counsel for
National Association
of Presort Mailers
Counsel for
American Bankers
Date:
March 17, 2000
Washington, D.C.
4
Association
CERTIFICATE
OF SERVICE
I hereby certify that I have this date served the instant
of record in this proceeding
March
17, 2000
document
on all participants
in accordance with Section 12 of the Rules of Practice.
Attachment
Exhibit A: First-Class
Mail Processing
Calculation of Total Mail Processing Costs
to ABAlAPMIUSPS-T24-27
Cost Summary
First-Class Letters
VI
Model
cost
Nonautomation
presort
Automation basic presort
Automation
Automation
3-digit presort
5.digit presort
Automation
carrier route !xesort
5.!3053
PI
PI
Proportional
Adjustment
1.1566
1.1586
4.2822
3.6167
2.3038
1.1586
1.1566
141
Fixed
Adjustment
0.3573
0.3573
0.3573
0.3573
Total
cost
7.1993
5.3188
4.5477
3.0265
2.2910 1)
First-Class Cards
PI
Model
cost
PI
I71
Proportional
Adjustment
Nonautomation
presort
Automation basic presott
Automation 3.digit presort
4.1793
3.0306
2.5596
1.0869
1.0869
1.0869
Automation
5.digit presort
1.6304
1.0869
Automation
carrier route presort
Fixed
Adjustment
0.1754
0.1754
0.1754
0.1754
WI
Total
cost
4.7178
3.4693
2.9574
1 .g475
0.6204 21
Attachment
USPS Mail Processing
Cost Pools
R-2000-1
1
2
3
4
5
6
7
a
9
IO
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
36
37
38
39
40
41
42
BMCS
BMCS
BMCS
BMCS
BMCS
BMCS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
MODS
43
44
MODS
MODS
Source:
R-97-1
cost
PO01
p?n
to ABAIAPMIUSPS-T24-29
Pool
NM0
OTHR
PtA
PSM
SPB
SSM
BCS/
OCR/
FSMI
LSMI
MECPARC
SPBS OTH
SPBSPRIO
ISACKS M
MANF
MANL
MANP
PRIORITY
LD15
1 BULKPR
ICANCMMP
IOPBULK
IOPPREF
1 PLATFRM
IPOUCHING
ISACKS H
ISCAN
EUSREPLY
EXPRESS
MAILGRAM
REGISTRY
REWRAP
1 EEQMT
INTL
LD41
LD42
LD43
LD44
LD46 EXP
LD46 SSV
LD49
LD79
ISUPP
ISUPP
cost
PO01
ti!T!
1
2
3
4
5
6
7
a
9
10
11
12
13
14
15
16
17
16
19
20
21
22
23
24
25
26
27
26
29
30
31
32
33
34
35
36
37
36
39
40
41
42
Cost Pool
&&y&gQ
BMCs
BMCs
BMCs
BMCs
BMCs
BMCs
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
mods
Fl
F4
USPS LR-1-61 6 USPS LR-106 R97-1, Page 11-5.
nmo
Othr
PIa
m
wb
ssm
bw
ocrl
fsml
lsml
mecparc
spbs 0th
spbsPrio
ISackS-m
manf
mm
!lW”P
priority
LD15
1 Bulk pr
ICalcMPP
lOPbulk
IOPpref
1 Platfrm
IPOUCHNG
ISackS-h
ISCAN
BusReply
EXPk?SS
MAILGRAM
Registry
REWRAP
1 EEQMT
INTL
LD41
LD42
LD43
LD44
LD46 Exp
LD46-SSv
LD49
LD79