ORDER NO. 1289
UNITED STATES OF AMERICA
POSTAL RATE COMMISSION
WASHINGTON, DC 20268-0001
Before Commissioners:
Edward J. Gleiman, Chairman;
George A. Omas, Vice Chairman;
Dana B. Covington; Ruth Y. Goldway;
and W.H. “Trey” LeBlanc III
Postal Rate and Fee Changes
Docket No. R2000-1
ORDER REQUESTING THE
SUBMISSION OF EVIDENCE ON
PERIODICALS PROCESSING COSTS
(Issued March 28, 2000)
On March 17, 2000, the Postal Service provided its response to Presiding
Officer’s Information Request No. 4. Based on this material, the Commission has
developed the graphs in Attachment A to present trends.
Two trends in particular stand out, one of which warrants further study. The
inflation-adjusted costs of processing letters are steadily declining, which has alleviated
the pressure for rate increases. The other pronounced trend is the increase in the
inflation-adjusted costs of processing Periodicals since 1993. This is a negative trend
that should be analyzed so that if possible, rates and classifications can be designed
that will assist the Service in changing it.
Accordingly, the Commission requests that Postal Service present detailed
evidence explaining the causes of the trend in the costs of processing Periodicals from
a witness qualified to respond to participants’ questions on the topic, see for example,
Docket No. R2000-1
-2-
interrogatories MH/USPS-T-21-1, 2. A witness with high-level managerial responsibility
over flat handling operations would appear to be best suited to this need.
The record would also benefit from an explanation of one other matter. Two
other subclasses with large volumes of flat mail, First-Class and Standard A regular, as
well as Periodicals, exhibited a sharp increase in unit flats processing costs in FY98,
the base year in this proceeding. An explanation for this should be provided.
It is ordered:
1. The Postal Service is to provide evidence explaining the increasing cost of
processing Periodicals and flats on or before April 14, 2000. Discovery on this
testimony will be allowed through April 26, 2000.
Margaret P. Crenshaw
Secretary
Docket No. R2000-1
Page 1 of 4
Order No. 1289
Attachment A
Mail Processing Plus City Carrier In-Office Unit Costs
Cents per Piece, Wage Level Adjusted to FY 1989
First Class Nonpresort Flat Shape
24.0
23.57
23.5
23.0
22.74
22.5
22.43
22.0
21.85
21.0
21.71
21.65
21.5
21.15
21.34
20.56
20.5
20.06
20.0
19.72
19.5
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Standard A Regular Flat Shape
9.00
8.71
8.70
8.50
8.50
8.43
8.32
8.10
8.00
7.87
7.85
7.84
7.55
7.50
7.59
7.58
7.30
7.29
7.00
6.80
6.71
6.50
6.29
6.42
6.29
6.08
6.00
5.50
5.52
5.39
5.00
1989
1990
1991
1992
1993
1994
Com m ercial
1995
1996
Nonprofit
1997
1998
1999
Docket No. R2000-1
Page 2 of 4
Order No. 1289
Attachment A
Mail Processing Plus City Carrier In-Office Unit Costs
Cents per Piece, Wage Level Adjusted to FY 1989
Standard A ECR FlatShape
2.50
2.25
2.00
1.86
1.86
1.72 1.69
1.73
1.67
1.54
1.50
1.73
1.62
1.66
1.63
1.46
1.56
1.36
1.79
1.74
1.39
1.36
1.29
1.33
1.06
1.00
1989
1990
1991
1992
1993
1994
1995
Com m ercial
1996
1997
Nonprofit
1998
1999
First Class Letter Shape
11.00
10.00
10.36
9.71
9.51
9.00
8.99
9.09
8.86
9.46
9.55
9.08
8.66
8.30
8.00
7.00
6.00
5.46
5.00
5.36
5.28
5.07
5.02
5.01
4.37
4.00
3.98
3.48
3.45
3.39
3.00
1989
1990
1991
1992
1993
1994
Nonpresort
1995
Presort
1996
1997
1998
1999
Docket No. R2000-1
Page 3 of 4
Order No. 1289
Attachment A
Mail Processing Plus City Carrier In-Office Unit Costs
Cents per Piece, Wage Level Adjusted to FY 1989
Standard A Regular Letter Shape
7.00
6.97
6.50
6.01
6.00
5.70
5.50
5.07
5.00
4.84
4.50
4.40
4.68
4.53
4.31
4.28
4.08
4.00
4.07
4.10
4.00
3.97
3.69
3.71
3.53
3.50
3.62
3.46
3.17
3.33
3.00
1989
1990
1991
1992
1993
1994
1995
Com m ercial
1996
1997
1998
1999
Nonprofit
Standard A ECR Letter Shape
3.00
2.90
2.80
2.77
2.60
2.40
2.20
2.19
2.02
2.01
2.00
1.94
1.87
1.80
1.91
1.79
1.72
1.60
1.781.70
1.78
1.56
1.81
1.52
1.40
1.34
1.84
1.48
1.46
1.33
1.23
1.20
1.00
1989
1990
1991
1992
1993
Commercial
1994
1995
Nonprofit
1996
1997
1998
1999
Docket No. R2000-1
Page 4 of 4
Order No. 1289
Attachment A
Mail Processing Plus City Carrier In-Office Unit Costs
Cents per Piece, Wage Level Adjusted to FY 1989
Periodicals Regular Rate
8.00
7.79 7.74
7.75
7.50
7.25
7.32
7.16
7.15
7.00
7.01
6.98
6.83
6.75
6.66
6.59
6.50
6.49
6.25
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999