‘(0
SPECIAL
1Gj-iici
~--‘A
BEFORE THE
POSTAL RATE COMMISSION
WASHINGTON,
D.C. 20268-0001
FEES AND CLASSIFICATIONS,
1996)
SERVICES
RECElVEt’
,&o;lketL\\J$
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posTkLR::[ 03H’(lSSlO~
OFF,~~OFIHE siCRETAfl7
RESPONSE OF
PHOTO INC., MYSTIC COLOR LAB, AND SEATTLE
WITNESS JOHN HALDI TO INTERROGATORIES
UNITED STATES POSTAL SERVICE
fUSPS/NMS-Tl
-1-l 8, 22-39)
(November 7, 1996)
NASHUA
Pursuant
practice,
to sections
Nashua
provide
Photo
the responses
United
States
stated
verbatim
Nashua
previously
of witness
Postal Service:
Mystic
22-39.
INC.
rules of
FilmWorks,
John Haldi to the following
Inc., hereby
interrogatories
of the
Each interrogatory
is
by the response.
Color Lab, and Seattle
to interrogatories
will be provided
Color Lab, and Seattle
USPSNMS-Tl-I-18,
and is followed
objected
interrogatories
25 and 26 of the Postal Rate Commissiion
Inc.. Mystic
Photo Inc.,
FILMWORKS,
OF
FilmWorks,
USPSNMS-Tl-19-21.
to the Postal Service
pursuant
Inc., have
Responses
to these
to a nondisclosure
agreement.
Respectfully
submitted,
William J. 01s
John S. Miles
William J. Olson,
8180 Greensboro
McLean, Virginia
(703) 356-5070
P.C.
Drive, Suite
22102-3823
Counsel for Nashua Photo
and Seattle FilmWorks,
1070
Inc.,‘.Mv~stic
Inc.
Color Lab,
Response
of Dr. John Haldi to USPSNMS-Tl-1
Page 1 of 4
USPSINMS-Tl-1.
Please refer to the statement
in your testimony
at page 12, lines 1 O-l 1,
that, under the manifest system employed by Nashua, “Postal Service
revenues are fully protected.”
(Emphasis added.)
(a)
Completely
explain
the basis for your statement.
(b)
Is it your testimony
that the Postal Service is satisfied
the manifest system fully protects postal revenues?
If so, please provide copies of all documents
generated by the Postal Service which support
assertion.
(0
(ii)
that
your
If so, please identify all postal offic:ials who have
made representations
which suppo’rt your assertion,
and indicate the date on which such representations
were made, and identify the persons to whom they
were made.
m:
Nashua’s
(a)
incoming
augmented
manifest
by Postal
Postal Service
should
Service
contained
Postal Service
Nashua.’
course
each day samples
of the year.
based on the sample.
’
See my response
as an integral
The postage
Because
of about
to USPS/NMS-Tl-5.
by the
part of the system,
revenues.
Pursuant
18,000
is taken
to the
3, p. 103, the
Reply Envelopes
due on the manifest
a new sample
with and is
sampling
Part 2, Exhibit
50 Business
a sample
in conjunction
Independent
that fully protects
in LR-SSR-148,
This represents
operates
sampling.
thus be viewed
and this is the component
instructions
system
pieces
at
over the
is adjusted
each day.
daily,
Response
seasonality
detail
of Dr. John Haldi to USPSINMS-Tl-1
Page 2 of 4
is not even a consideration.’
in my response
to USPS-Tl-32,
fault of the Postal Service)
the BRM manifest,
manifest.
(b)
protecting
giving
in my testimony
on Nashua’s
incoming
own daily sampling,
starting
initially
in October
which
As noted
the Postal Service
that larger samples
Postal Service
postage
in the
ancl BRM fees paid for
the benefit
manifest
revenues
system,
of all doubt
and
in my response
has not done so.
reliability.
alJgmented
by its
for BRM
was determined
nothing
has
the size of the daily sample
the instructions
to USPSINMS-Tl-5,
The Postal Service
It would
the increased
to USPS/NMS-Tl-18.
has relied
due the Postal Service
from expanding
or from revising
increase
in
made due to the
From that time onward,
does not consider
See my response
adjustments
The size of the daily sample
the Postal Service
LR-SSR-148.
’
to compute
it takes at Nashua,
be identified
at pp. 9-l 1, the Postal !;ervice
[“reverse”]
1994.
cannot
no
revenues.
by the Postal Service.
prevented
in the sample
the Postal Service
As indicated
in more
from time to time (and through
of increasing
Postal Service
explained
they in fact have been included
this occurs,
have the effect
the day, thereby
fully
even though
Whenever
discrepancy
pieces
For reasons
contained
however,
is well aware
thus appear that the
reliability
that would
in
Response
of Dr. John Haldi to USPS/NMS-Tl-1
Page 3 of 4
result from a larger sample
to be worth
for two years the Postal Service
to calculate
Beyond
extent
postage
that,
due.
it would
to which
To this extent,
the Postal Service,
that Nashua’s
revenues.
It should
Postal Service
“Postal
has accepted
be presumptuous
“satisfied”
Service
incoming
be pointed
as the question
revenues
are fully protected.”
of computing
BRM postage
due.
seems to question
has approved,
participated
visited
Nashua’s
to them.
concerning
protected,
receives
On the other
a system
fully protects
was not “the
but rather
that
per
willing
sampling”
method
hand, ‘when asked to
that it helped
it incurs,
develop
the
and
in and relied on for two years.
postal
plant and had the system
Only complimentary
certainly
is subjectively
a BRM fee of 10 cents
manifest/daily
note that various
its system.
states,
on the
the very low unit cost which
Postal Service
I would
system
it has been completely
to rely on the “incoming
of this system
for me to speculate
manifest
(“satisfied”?)
Moreover,
speak for themselves.
out that my testimony
piece for doing very little work,
Finally,
the results
the facts
is satisfied,”
the BRM fee to reflect
effort.
or its management,
So long as the Postal Service
reduce
the additional
remarks
If a problem
some concerns
been raised over the past two years.
representatives
explained
and demonstrated
have been received
existed
or if revenues
or reservations
Following
have
would
by Nashua
were not fully
seemingly
have
is a list of Postal Service
Response
employees
Nashua
of Dr. John Haldi to USPS/NMS-Tl-1
Page 4 of 4
who
have visited
manifest
John
H. Ward,
2.
Scott
Hamel,
3.
V-P, Marketing
Manager,
Service
Center
Joe DeMay,
Classification
Support
Service
4.
Gary M. Infante,
Manager,
5.
Diarmuid
Dunne,
District
Services,
Appalachian
Dianne
J. Clifford,
Research
7.
W. Wayne
Wilson,
8.
Dean R. Cameron,
Specialist,
Rates
Center
Product
Manager,
Development
Customer
District
Product
Operations
Finance-Cost
Studies,
Analyst
Postmaster,
Product
Parkersburg,
Development,
WV
Marketing
Systems
9.
10.
Dean Daglieri,
National
Susan E. Simon,
Area
the
Systems
Rates and Classification
and Classification
6.
first-hand
system:
1.
Eastern
the plant and observed
Account
National
Account
Manager
Representative,
NE
Center,
Response
of Dr. John Haldi to USPSINMS-Tl-2
Page 1 of 1
USPWNMS-Tl-2.
Please refer to your testimony
at page 13, lines 8-l 0, and fully explain
the basis for your assertion that the Nashua incoming manifest system
constitutes
a “reliable means by which the Postal Service is able to
collect all First-Class Mail [sic, word added] postage and fees.”
Provide
copies of all documents
which support your assertion or identify any
documents
already filed in this proceeding on which that assertion is
based.
Resoonse:
See my responses
15.
to your related
questions
USPSNMS-Tl-1,
8, 12 and
Response
of Dr. John Haldi to USPS/NMS-Tl-3
Page 1 of 2
USPSINMS-Tl-3.
Please refer to page 16, lines 15-l 6 of your testimony
and fully explain
the basis for your assertion that the Seattle FilmWorkzs weight averaging
system ‘has worked successfully
and without problems
.” Please
provide copies of all documents
which support your assertion or identify
any documents
already filed in this proceeding on which that assertion is
based.
Resoonsg:
For a copy of sampling
Office,
see my response
instructions
to USPVNMS-Tl-4,
Two USPS memoranda,
Kunz, Manager,
information
pursuant
Business
concerning
dated August
Seattle
FIlmWorks
agreement)
been able to locate that reviews
contrary,
states
in fact,
Postal Service’s
that physically
“impractical
weighing
and extremely
appropriately
where
exact
and count.”
weight
averaging
practice
As further
Service
is thus viewed
to USPS.
sample
added.)
17 memorandum
and manual
Sampling
I have
At no point do these
is not working.
To the
accurately
counting
procedures
of mail is physically
Continuatiorl
as the only practical
in the August
to the Postal Service
at Seattle.
system
E.
confidential
are the only other documents
each mailpiece
(Emphasis
from Richard
WA (containing
and offered
Kunz August
costly
took a new sample.
Seattle
averaging
a representative
detailed
16 and 17, 1993,
the situation
state that the weight
Post
item no. 5.
Reply Mail Entry,
to a nondisclosure
memoranda
for ERM used by the Seattle
are
can be used
verified
for
of the weight
alternative.
17 Kunz memorandum,
For the three BRM accounts
the Postal
under which
Seattle
Response
of Dr. John Haldi to USPS/NMS-Tl-3
Page 2 of 2
FilmWorks
receives
downward
by slightly
FilmWorks
was not undercharged
previous
FilmWorks
1 .l percent,
which
would
Irates were adjusted
indicate
that Seattle
by rates based on the prior sample
has worked
successfully
for more than 15 years.
has been able to pick up the first batch
around
deducting
less than
bulk BRM, on average
and/or
the
“methodology.”
The system
morning
non-automatable
5:00
all postage
a.m.,
and the Postal Service
and fees from Seattle
Seattle
of its incoming
receives
FilmWorks’
mail each
payment
advance
in full by
deposit
BRM
account.
The 5:00
enables
a.m. pickup,
the Postal Service
allowing
Seattle
FilmWorks
morning,
which
is another
along with a later pickup
to avoid incurring
to start work
aspect
around
any cost for delivery
on its incoming
indicating
9:00
orders
that the system
a.m.,
while
early in the
works
successfully
for both parties.
The lack of correspondence
(non-existentJ
working
problems
of the weight
is perhaps
averaging
or other internal
documents
the best testament
system.
pertaining
to the successful
to
Response
of Dr. John Haldi to USPS/NMS-Tl-4
Page 1 of 2
USPS/NMS-Tl-4.
Please refer to page 57 of your testimony,
lines 2-3, and state the
complete basis for your conclusion
that “the Postal Service already has
in place fully adequate procedures for sampling and revenue protection.”
Please provide copies of all documents
which support your assertion or
identify any documents
already filed in this proceeding
on which that
assertion is based.
Resoonse:
Mystic
Co/or Lab.
information
concerning
nondisclosure
procedures
Mystic
agreement)
documents
and offered
(containing
the Postal Service
over the last five years.
USPS letter
3.
USPS letter dated
3/07/91
4.
USPS letter dated
9/l 2/95 to Dave MacDonald
pages)
(copy
As they
the
plainly
protection.
2.
to Colleen
Garringer
of Mystic
(1 page)
dated 9/l 2/90 to Colleen
Garringer
of Mystic
(1 page1
Garringer
of Mystic
(1 page).
of Mystic
(2 pages),
to Colleen
for “BRM Averaging”
FilmWorks.
document
2/23/90
for revenue
USPS letter dated
following
to a
Color Lab help document
1.
Seattle
pursuant
has had in place for many years sampling
that are fully adequate
instructions
confidential
to the Postal Service
from files of Mystic
that have been followed
demonstrate,
procedures
Certain
at Mystic
Seattle
FilmWorks
from its files:
Sampling
with
Color Lab (I page)
has been able to locate the
instructions
for BRM (undated,
3
attached).
The sampling
Region instructions
instructions
for Seattle
for piece count
FilmWorks
and postage
reflect
computation”
the “Western
referred
to in the
Response
Kunz memorandum
quite clearly
of Dr. John Haldi to USPS/NMS-Tl-4
Page 2 of 2
discussed
in my response
to USPSINMS-Tl-3.
As stated
in that memorandum:
There is no alternative
to a sampling procedure
but to physically
weigh each mailpiece coming to the customer and to count the
pieces manually.
This is impractical
and extreme/y cost/y to
USPS. Sampling procedures
can be used appropriately
where a
representative
sample of mail is physically
verified for exact
weight and count.
.[at 2.1
While the procedures were stated for use with only a narrowlydefined piece weight spectrum,
there is no reason why, given a
valid sample, it cannot also be used with a broader weight range;
period for use of sample data, the
. . . Over the three-month
postage charged should come very close to the actual postage
which would be charged if each piece were counted and weighed.
[at 3.1
The method in the Western Region instructions
for piece count
and postage computation
are [sic] effective and should be
followed when billing the customer.
[at 5, misnumbered
as 4 on
memo.] [Emphasis added.1
Nashua
Photo.
See response
to USPSNMS-Tl-l .
SARPLING
INSTRUCTIONS
?OR BRR
These instructions
are to be used in sampling
large
volumes
of Business
~cply
Hail
that
fall
within
three
weight
This sampling
procedure
is to be conducted
over
increments.
a five
day period
to develop
an average
daily
percentage
of
pieces
by weight
category
and an average
number of pieces
per pound.
Once this
basis
for
period
of
sampling
determining
90 days.
l’IVE
is
DAY
SURVEY
of
SAJIPLING
PROCEDURE*
Select
2.
Weigh and
Example :
3.
Divide
the net
Determine
the average
piece
weight.
sample weight
by 200 to determine
the average
piece
The average
piece
weight
will
be used to
weight.
determine
the total
number of pieces
in a BR?l mailing.
Example:
17.81bs.
divided
by 200 = .089 lbs.
(avg pc wt)
4.
Separate
Example:
5.
Count the number of pieces
in each rate
category
(Total
count
should
equal
sample size).
Example:
1 oe = 125 pcs. 2 ass - 65 PCS, 3 oss = 10 PCS.
6.
Determine
Example:
record
17.Blbs.
the
total
each
sample
the sample pieces
into
1 02, 2 OES, & 3 02s.
the
percentage
= 125 pcs
= 65 pcs
10 pcs
The percentage
of
average
number of
charge
period
(90
l
200 pieces
a
1.
1 0s
2 oas
3 ozs
a sample
the averages
can be used
Reply nail
charges
for a
complete,
Business
During
the
used until
of
125 divided
65 divided
10 divided
pieces
pieces
days).
day.
weight
weight
pieces
in
less
tare.
increments,
each
by 200 = .625
by 200 = .325
by 200 = .050
category.
or
or
or
62.5%
32.5%
5.0%
will
be used to determine
in each weight
category
the
survey
days,
the fifth
day of
cumulative
the survey.
average
will
the
for
the
be
FOR ULCDLATING
PROCEDURE
1.
Determine
less tare
Example :
total
weight
(sacks).
950
of
DAILY
all
Business
BRH
POSTAGE
Reply
Mail
pieces
lbs
2.
Divide
total
net weight
by the average
piece
weight
determined
in the survey
to arrive
at the total
number
of
BRH pieces.
950 lbs.
divided
by -089 - 10,675
PCS.
Example :
3.
Rultiply
the percentage
of pieces
of each surveyed
weight
category
against
the total
net weight
of the
for
mailing.
This will
give the number of pieces
postage
charging.
Example:
-625
325
:050
4.
x
x
x
Calculate
Example :
10,675
6,672
3,469
534
Total
10,675
10,675
10,675
pcs
pcs
pcs
pcs
=
one OS pieces
two ot pieces
three
os pieces
6,672
= 3,469
-
the
534
amount
x $0.08
x 0.35
x 0.45
x 0.65
BRM h Postage
of
BRR charges.
ea = $
ea
ea
=
=
ea =
charges
854.00
2,335.20
1,547.55
347.10
$5,083.65
-_
PROCEDURE
1.
SAMPLE (SAH)
SIZE:
2.
GROSS WT OF SAM:
-
5
DAY
SURVEY
200 PIECES
MINUS
DIVIDED
3. NET WT OF SAM:
= NET WT:
TARE:
-
BY #PCS IN SAM
PC WT
AVG
02
DIVIDED
BY #PC6 IN SAN
=
# SAM PCS </=
2 oz.5
DIVIDED
BY #PCS IN SAM
=
4c # SAN PCS </=
3 02s
DIVIDED
BY #PCS IN SAM
=
QD # SAM PCS </=
4 oz.5
DIVIDED
BY #PCS IN SAM
E
DIVIDED
BY #PCS IN SAM
=
4A
#
48
SAH
SAM
PCS
PCS
</=
<=
1
4E
#
ozs
5.
# PCS IN SAM x$O.OS
6A
# PCS IN LINE
-
-
(ERM CHARGE) =
"4A"‘*
SO.35
6~ # PCS IN LINE
"4B"
* $0.45
# PCS IN LINE
*4C"
f $0.65
-J # PCS IN LINE
"40"
* $0.85
6E t PCS IN LINE
n 4E"
* $
(-25
PLUS SURCHARGE .10)
.
TOTAL:
DIVIDED
7. TOTAL WT OF SAM:
BY WT OF AV PC:
# PCS:
* $0.08
# PCS:
l
0 LN 4A:
=
*.35
=
I PCS:
* % LN 4B:
=
* -45
=
I PCS:
* % LN 4C:
=
l
=
4 PCS:
l
% LN 4D:
=
e.05
=
0 PCS:
* % LN 4E:
m
*
=
DIVIDED
?OSTAGE TOTAL :
.UTE
PER
02:
(BRM CHG)
- #PCS
l
=
.6S
L
_
_
BY TOTAL WT IN OZS = RATE PER 02
16 (OZ/LB)
= RATE PER POUND
t0f-l
Response
of Dr. John Haldi to USPVNMS-Tl-5
Page 1 of 1
USPS/NMS-Tl-5.
Please refer to page 11, lines 1-2, of your testimony
and confirm that the
50-piece incoming manifest sample size has not been adjusted since the
reverse manifest system was implemented.
Resoonse:
Confirmed;
Service
this is based on what
and what
knowledge
it has observed
this practice
Part 2, Exhibit
3, p.103.
conforms
Nashua
has been told by the Postal
for two years.
To the best of my
with the instructions
in LR-SSR-148,
Response
of Dr. John Haldi to USPS/NMS-Tl-6
Page 1 of 2
USPS/NMS-Tl-6.
Please refer to page 57, lines 3-4, of your testimony,
and
(a)
describe in full and specific detail each existing
which has been in place for 15 years;
procedure
(b)
fully describe each other procedure
of time each has been employed.
the length
ICI
Please explain the basis for each change
has occurred during this time period.
and specify
in procedure
which
Resoonse:
At Seattle
(a)
effect
FilmWorks,
for over 15 years.
each sack, then deduct
weight
due.
There,
USPS/NMS-Tl-3
at Seattle
add to the August
(discussed
practices
at pp. 16-l 8.
With
respect
17, 1993
in my response
system
has been in
has been to weigh
of the sack to arrive at the net
then becomes
and 4 for additional
FilmWorks.
averaging
the daily procedure
the tare weight
of the mail, which
See my testimony
the weight
the basis for computing
Also see my responses
information
concerning
to prior procedures,
memorandum
from Richard
to USPS/NMS-Tl-3),
which
postage
to
procedures
I am unable to
E. Kunz
refers to previous
as follows:
The customer has been being [sic] billed under a
sampling procedure which was apparently
developed
by the former manager of Terminal Station, operating
instructions
for which are not available.
Noone [sic/
can provide information
about this methodology
(Page 1, Emphasis added.)
Response
At Mystic,
(b-c)
over 10 years
description
of Dr. John Haldi to USPSINMS-Tl-6
Page 2 of 2
the weight
(since
of these
1985);
1995 the instructions
Postal Service
system
October,
at Nashua
1994.
used at Nashua,
--
At Mystic,
see item nos. l-3
were changed
1,000
formerly
in USPWNMS-Tl-4.
sampling;
(p. 10). the incoming
information
see my responses
for a
a large sampling
listed
for
In
see
the
per day for five days.
has been in continuous
For further
at pp. 14-16
Under the new procedure,
pieces
in my testimony
has been in effect
to call for quarterly
in USPSINMS-Tl-4.
samples
As indicated
system
see my testimony
procedures.
was done semi-annually;
item no. 4 listed
averaging
use for only two
concerning
to USPS/NMS-Tl-1
manifest
years,
the incoming
since
system
, 5, 8, 32 and 38
Response
of Dr. John Haldi to USPWNMS-Tl-7
Page 1 of 2
USPWNMS-Tl-7.
Please refer to page 57, lines 7-8, of
possible, please describe and explain
Manual that the Postal Service would
conform it to each of your proposed
Schedule amendments
and to existing
your testimony.
As specifically
as
all changes to the Domestic Mail
need to promulgate
in order to
Domestic Mail Classification
practice.
Resoonse:
The precise
the product
or altered
language
of input from the Postal Service
DMM provisions
Non-Automatable
after certain
that would
Bulk Business
DMM provisions
S922.1.5)
and the conditions
S922.2.2).
Such provisions
participation
of the proposed
in the system
although
there could
presently
aware.
and affected
be necessitated
the BRMAS
for participation
describing
would
would
system
would
DMM
include
The new
(DMM
for
section
section
and the requirements
provisions
be
be patterned
(DMM
appear to be the critical
be other relevant
would
BRM users.
in BRMAS
the system
hopefully
by the NMS proposal
Reply Mail presumably
describing
The changes
DMM changes
DMM
provisions,
of which
I am not
for
the following:
.
A description
of the Non-Automatable
Bulk BRM Accounting
System (NABBRMAS),
indicating that mailers may obtain a lesser
fee for the return of their business reply mail under NABBRMAS.
0
NABBRMAS
would be described, presumably
as a system devised
and agreed to by the USPS and the mailer, whereby business reply
mail would be received (by the mailer from customers)
in bulk, and
where an incoming manifest system or a weight averaging system
is employed by the Postal Service to calculate postage and fees.
Response
of Dr. John Haldi to USPSINMS-Tl-7
Page 2 of 2
0
All BRM standards would have to be met, mailers would be
required to pay for BRM by a business reply advance deposit
account, and mailers would have to obtain a BRM
authorization/permit.
.
Each BRM piece would have to be properly
appropriate
BRM standards.
0
Each mailer’s non-automatable
bulk BRM would have to meet a
minimum threshold,
such as 2000 pounds per month.
.
There would be a description
of the procedural requirements
for
participation
in NABBRMAS,
including submission
of an
appropriate
request to open a NABBRMAS
account, describing the
mailer’s non-automatable
bulk BRM and whether its estimated
monthly BRM met the monthly minimum weight requirement
for
NABBRMAS
participation.
Presumably,
the request would be
submitted
to the postmaster
or business mail acceptance
manager
at the post office to which the BRM pieces would be returned,
and, if the mailer’s request were approved, the USPS would issue
the mailer an authorization
letter and instructions
on the approved
system for counting,
weighing,
rating, and billing the BRM mail
returnable to the mailer.
prepared
to meet all
Response
of Dr. John Haldi to USPSINMS-Tl-8
Page 1 of 2
USPS/NMS-Tl-8.
Please refer to page 57, lines 4-5. of your testimony.
State the complete
basis for your assertion that “[nlo new procedures need be drawn up and
promulgated,
nor is any employee training or re-training
required.”
Resoonse:
The reference
Nashua.
There,
at p. 57, lines 4-5, of my testimony
on-site
Postal Service
contained
in LR-SSR-148,
postage
due on the sample,
manifest,
and adjust
which
they follow
Postal
Service
take a daily sample
compare
the total
postage
are adequately
publication,
and have worked
Nashua’s
incoming
manifest,
Nashua,
“If it ain’t
With
the implicit
respect
In other words,
broke,
don’t
effectively
assigned
I am not aware
is satisfied
for
respect
procedures
since Postal Service
to USPS/NMS-Tl-5.
facility,
to
at
I have made
that they know
of any evidence
the last two years.
See my response
effectively
up and promulgate
to the Nashua
their duties
’
work
to existing
that they have not been executing
Consequently,
per the
official
for two years with
respect
that the Postal Service
to do.
computed
Since the procedures
no need to draw
with
the
fix it.”
to employees
assumption
they are supposed
I perceive
compute
out in the aforementioned
procedures
at
instructions
of 50 pieces,’
due accordingly.
and since those
manifests
following
that with the postage
spelled
outgoing
any new procedures.
employees,
is to the situation
satisfactorily
which
would
what
indicate
on a daily basis for
employees
performing
Response
this duty at the Nashua
required
employee
of Dr. John Haldi to USPS/NMS-Tl-8
Page 2 of 2
plant are already
under my proposal,
training
performing
all duties
at this point I can conceive
or re-training.
that would
be
of no need for any
Response
of Dr. John Haldi to USPS/NMS-Tl-9
Page 1 of 1
USPSINMS-Tl-9.
Please provide your best estimate, on an annual basis, of the number of
BRM recipients to which the Postal Service currently tenders mail which
would qualify as “non-automation
bulk BRM.”
Resoonse:
To the best of my knowledge,
any reference
question
is that no mail currently
and the number
discussion
to “non-automation
of recipients
of your related
----
neither
the DMCS nor the DMM contains
bulk BRM.”
would
qua/ify
Accordingly,
as “non-automation
of such mail is therefore
question,
the answer
zero.
bulk BRM,”
For further
see USPWNMS-TVIO,
--
to your
Response
of Dr. John Haldi to USPS/NMS-Tl-10
Page 1 of 3
USPSINMS-Tl-10.
Please provide your best estimate, on an annual basis, of the number of
BRM recipients to which the Postal Service would tender “nonautomation
bulk BRM” in the test Year if either of your alternative
classification
and fee proposals were recommended
by the Commission
and implemented
by the Postal Service.
Resoonse:
As discussed
in my testimony
my two classification
established
proposals
bY the Postal Service
It is my expectation
BRM required
number
somewhat
general
automation
require
(in the DMM)
to meet the threshold,
8RM recipients.
or threshold
comprehensive
would
that the way the threshold
of qualifying
definition
at pp. 47-48,
compatible
Moreover,
of the universe
that an eligibility
of either of
threshold
for “non-automation
is defined,
bulk BRM.”
bulk BRM.”
effect
which
of
on the
fails to specify
I have not conducted
of BRM recipients
be
and the volume
have a profound
Your hypothetical
for “non-automation
answer.
survey
could
implementation
any
necessitates
any formal
who receive
a
or
non-
mail.’
’ Although
no formal survey was undertaken,
significant
Yet unsuccessful
attempts were made to identify recipients of bulk non-automatable
mail,
including the following:
(i) calls were made bY a former Postal Service
employee to dozens of persons within the Postal Service to identify types of
businesses using this product; (ii) during the National Postal Forum meeting in
August, 1996 and the MailCom meeting in September,
1996 I personally raised
this issue with many attendees;
(iii) Nashua, Mystic and Seattle all asked their
contacts to help locate such mailers; (iv) the heads of some postal mailer
associations
with whom I spoke knew of no such mailers; and (v) members of
the postal trade media were unaware of other mailers.
Lastly, I note that
although the Postal Rate Commission
published a notice of the expansion of
this docket in the Federal Register, only Seattle FilmWorks,
another throughthe-mail photofinisher,
sought to intervene in the docket.
Lastly, during
Response
TO elaborate,
million
of Dr. John Haldi to USPS/NMS-Tl-10
Page 2 of 3
according
to Postal Service
pieces of BRM tendered
not qualify
WPl-1,
for the BRMAS
row 8).
automatable.
shape,
receive
etc.) which
relatively
short
significant
period,
averaging,
to establish
incoming
with such BRM.
volume
manifest
minimum,
accounts
precluded
or any other
Table
them from being
of non-automatable
cost-reducing
did
had characteristics
that some BRM recipients
may on
BRM, but only over a
and not on a consistent
procedure
“short-cut”
might
(e.g.,
procedure)
deem it not
weightfor dealing
to be the case, then in order for arriving
as “non-automation
a month/y
some 525
deposit
such as this, the Postal Service
If this were found
to qualify
establish
physically
volumes
any special
1995
per piece (see NMS-WPl,
such as one to three weeks,
Under circumstances
worthwhile
with advance
how many of these pieces
It is at least conceivable
occasion
basis.
rate of 2 cents
I do not know
(e.g,., thickness,
to recipients
data, during
bulk BRM”
which
it might
be appropriate
is one of three alternatives
to
discussed
in
my testimony.’
I can also make the following
to the through-the-mail
would
be expected
industry-specific
film processing
to qualify.
industry,
comments.
Nashua,
With
Mystic
To the best of my knowledge,
respect
and Seattle
District
Photo
meetings of the Postal Service working group to study this very issue with
representatives
of Nashua, Mystic and Seattle, no such mailers were ever
identified by name, by line of business, or in any other way.
’ For further discussion
of the thresholds
my response to USPSINMS-Tl-33.
suggested
in my testimony.
see
Response
of Dr. John Haldi to USPWNMS-Tl-10
Page 3 of 3
does not currently
supply
significant
Should
extent.
that it would
its customers
District
also generate
least three other,
and they might
smaller
sufficient
through-the-mail
depending
industry,
laboratories
receive
knowledge,
however,
to qualify
easily.
film processors
to any
it is assumed
In addition,
are known
on the level at which
it is my understanding
non-automatable
at
to exist,’
the threshold
concerning
for
laboratories
that use BRM.
my part would
be entirely
speculative
To sum up, it is my expectation
either of my alternative
tender
“non-automation
classification
and implemented
that the number
by the Postal Service
by the
Any answer
of recipients
bulk BRM” during
and fee proposals
testing
I have no
of such mail tendered
testing
would
basis.
the volume
to medical
the Postal Service
that some medical
BRM on a regular
Postal Service
probably
Reply Envelopes
bulk BRM” is established.
In a different
the Commission
Business
Photo elect to do so, however,
volumes
also qualify,
‘non-automation
with
to which
test year if
were recommended
would
on
by
be rather small,
not more than a dozen..
’ The three other through-the-mail
film processors
Vermont Color Lab (Bennington,
VT), Dale (Hollywood,
(Austin, TX). I do not have any information
concerning
BRM which they receive.
alluded to here are:
FL), and Skrudland
the volume of incoming
Response
of Dr. John Haldi to USPSINMS-Tl-11
Page 1 of 1
USPSINMS-Tl-11.
Please provide your best estimate of the number of postal facilities at
which the Postal Service could be expected to tender “non-automation
bulk BRM” to BRM recipients in the test year, if either of your alternative
classification
and fee proposals were recommended
by the Commission
and implemented
by the Postal Service.
Please see my response
and the expectation
test year would
either
that each recipient
be served
of my alternative
the Commission,
Service,
to USPS/NMS-Tl-10.
approved
the number
post office,
postal
facilities
bulk BRM” during
it is my expectation
and fee proposals
by the Governors,
of affected
not more than a dozen.
of “non-automation
by a different
classification
Based on that response,
were recommended
and implemented
would
that if
be rather
by
by the Postal
small,
probably
Response
of Dr. John Haldi to USPSINMS-T-I
Page 1 of 2
2
USPSINMS-Tl-12.
Please refer to your testimony
at page 10, lines 11-13 and fn. 8, and list
all months during which the incoming manifest system utilized by
Nashua has experienced
postage/fee
errors of 1.5 percent or less, the
level of accuracy required by the USPS publication
referenced at fn. 8.
From inception
no entire
months
experienced
worth
accuracy,
October.
The October,
errors”
to USPS/NMS-TV32
Nashua
accuracy
incurs
as follows
or less.’
by Nashua
has
In this connection
the incoming
(estimated
have been
manifest
postage
it is
has
due on manifest
98.3%
1996 accuracy
standard
rating
selected
for discussion
of its incoming
utilized
there
98.1%
1996
all the costs
system
1996,
98.0%
1996
of its incoming
October,
due for pieces in the sample):
1996
September,
the accuracy
manifest
errors of 1.5 percent
of the postage
August,
“postage/fee
through
that for the past three months
increasing
as a percent
1994)
when the incoming
postage/fee
observing
evidenced
(October,
by the Postal Service.
of the steps taken
manifest
associated
manifest
is only 0.2 percent
system.
system.
When
the
See my response
by Nashua
It is worth
with investigating
below
to increase
observing
that
and improving
Nashua’s
the
BRM manifest
’ See my response to USPS/NMS-Tl-1
for an explanation
as to how an
adjustment
is made each day for Postal Service fees and postage due pursuant
to a daily sample.
Response
consistently
Service
frequent
reduction
Service,
achieves
of Dr. John Haldi to USPS/NMS-T-12
Page 2 of 2
an accuracy
will then have the option
sampling
(in terms
system.
level of 98.5
of shifting
percent
and none of the cost savings
the Postal
to an even less costly,
At that time, a// the benefit
of less time devoted
or better,
to sampling)
will accrue
of further
will accrue
less
cost
to the Postal
to Nashua.’
’ My estimate of Postal Service costs in NMSWP2
more expensive daily sampling now in effect.
is predicated
on the
Response
of Dr. John Haldi to USPS/NMS-Tl-13
Page 1 of 2
USPSINMS-Tl-13.
Please confirm that to the extent that alternative
BRM accounting
procedures expedite the processing of film and the ultimate return of the
finished product to the customers
of Nashua, Mystic, and Seattle
FilmWorks,
these procedures increase the value of the photo processing
service to NMS customers.
Resoonse:
By way of preface,
it should
be patently
business,
value is added - for the both sender
procedure
that expedites
movement
processing
of BRM (which
it is for alternative
BRM accounting
All BRM pays full First-Class
First-Class
service.
for First-Class
standards
do not represent
Moreover,
the Postal Service
especially
for First-Class
day delivery.
BRM piece individually,
Seattle
FilmWorks
Class Mail, perhaps
would
postage
and, as such,
automation
per piece) as
should
be entitled
has for many years published
guarantee
to receive
were to attempt
much of the incoming
by as much as several
these
or commitment.
standards,
two-day
to weigh
BRM at Nashua,
fail to meet the service
to
its service
well knows,
fails to meet its published
Mail that is supposed
probably
to put the
procedures.
any kind of service
If the Postal Service
BRMAS
pays a BRM fee of only 2 cents
Mail but, as the Postal Service
often
- by any
the time required
This is as true when
The Postal Service
standards
that in the delivery
and the addressee
and decreases
piece in the hands of the addressee.
speeds
obvious
and rate each
Mystic
standard
days (as happened
and three-
and
for First-
at Mystic
prior to
Response
of Dr. John Haldi to USPWNMS-Tl-13
Page 2 of 2
institution
of the weight
alternative
BRM accounting
closer to meeting
incoming
averaging
its service
BRM would
system).’
procedures
standards
otherwise
probably
Therefore,
to the extent
enable the Postal Service
for First-Class
Mail, which
miss, my answer
that the
to come
much of the
to your question
is:
Confirmed.
’ The highly inconsistent
service received by First-Class Mail during recent
years may have contributed
materially to the declining market share of throughthe-mail film processors;
see my response to USPS/NMS-Tl-37.
-
-
Response
of Dr. John Haldi to USPSINMS-T-14
Page 1 of 2
USPS/NMS-Tl-14.
Please confirm that, to the extent that alternative
BRM accounting
procedures expedite the processing of film and the return of the finished
product to Nashua, Mystic, and Seattle FilmWorks
customers,
these
procedures
also increase the value of BRM service to Nashua, Mystic,
and Seattle FilmWorks.
Resoonse:
By way of preface,
business,
value
procedure
it should
is added - for both
that expedites
movement
be patently
obvious
the sender
and the addressee
and decreases
piece in the hands of the addressee.
speeds
processing
of BRM (which
it is for alternative
BRM accounting
All BRM pays full First-Class
First-Class
service.
for First-Class
standards
do not represent
Moreover,
the Postal Service
especially
for First-Class
day delivery.
BRM piece individually,
Seattle
FilmWorks
Class Mail, perhaps
would
postage
and, as such,
automation
per piece) as
should
be entitled
has for many years published
guarantee
to receive
were to attempt
much of the incoming
by as much as several
these
or commitment.
standards,
two-day
to weigh
BRM at Nashua,
fail to meet the service
to
its service
well knows,
fails to meet its published
Mail that is supposed
probably
to put the
procedures.
any kind of service
If the Postal Service
BRMAS
pays a BRM fee of only 2 cents
Mail but, as the Postal Service
often
- by any
the time required
This is as true when
The Postal Service
standards
that in the delivery
and rate each
Mystic
standard
days (as happened
and three-
and
for First-
at Mystic
prior to
Response
institution
alternative
of the weight
averaging
BRM accounting
closer to meeting
incoming
of Dr. John Haldi to USPSINMS-T-14
Page 2 of 2
its service
BRM would
system).’
procedures
standards
otherwise
probably
Therefore,
to the extent
enable the Postal Service
for First-Class
Mail, which
miss, my answer
that the
to come
much of the
to your question
is:
Confirmed.
’ The highly inconsistent
service received by First-Class Mail during recent
years may have contributed
materially to the declining market share of throughthe-mail film processors;
see my response to USPS/NMS-Tl-37.
Response
of Dr. John Haldi to USPS/NMS-Tl-15
Page 1 of 1
USPSINMS-Tl-15.
Please refer to your testimony
at page 11, line 17 through page 12, line
2. Is the only basis for your statement
that “the system
has no
consistent
bias one way or the other
.” the response of the Postal
Service to interrogatory
NM/USPS-34?
Explain fully any negative
response.
Resoonse:
No. My response
each day’s
1996.
sample
was also based on examination
at Nashua
during
the months
of the results
of August
from
and September,
Response
of Dr. John Haldi to USPSINMS-Tl-16
Page 1 of 2
USPSINMS-Tl-16.
Please identify each rate category or special service for which the
Domestic Mail Classification
Schedule requires prebarcoding
of each
piece as a condition of rate or fee qualification,
but for which the DMCS
also permits pieces which are not prebarcoded
to qualify for that same
rate or fee.
&soonse:
I am not aware
DMCS requires
qualification,
prebarcoding
but for which
not prebarcoded
textual
of any rate category
portion
Accounting
to qualify
System
Schedule
SS-2, where
before,
the only reason
Nashua’s
return
for that same rate or fee.
I would
also note that the
neither
the Business
requires
in association
with
the mail of Mystic
rate.
BRMAS
mail is not barcoded
that the mail must
The single
is contained
see my testimony
and Seattle
are
Reply Mail
nor implies
for the BRMAS
which
DMCS
in Rate
at pp. 40-41.
is pre-barcoded,
is to offer customers
while
multiple
addresses.
Any possible
the manner
of rate or fee
pieces
the term is not defined;
As I have stated
the
permits
in order to qualify
to pre-barcoding
for which
the DMCS also expressly
(“BRMAS”)
reference
service
of each piece as a condition
of the DMCS that deals with
be pre-barcoded
possible
or special
requirement
in which
the Postal Service.
barcode
to count
Mystic,
no reason
those
that BRMAS
pieces would
be processed,
Since the Postal Service
non-automatable
exists
be barcoded
cannot
bulk BRM received
related
counted,
to facilitating
and billed by
and does not use a
by Nashua,
to apply by rote such an irrelevant
Seattle,
requirement.
-.
and
This
Response
is a perfect
situation
does not apply.
of Dr. John Haldi to USPS/NMS-Tl-16
Page 2 of 2
to apply the legal maxim
so also should
not the rule.”
“where
the reason
for the rule
Response
of Dr. John Haldi to USPS/NMS-Tl-17
Page 1 of 2
USPSINMS-Tl-17.
Please identify each rate category or special service for which the
Domestic Mail Classification
Schedule requires prebarcoding
of each
piece as a condition of rate or fee qualification,
but for which the DMCS
requires the Postal Service to charge a different rate or fee on those
qualified prebarcoded
pieces because of (i) the unavailability
of barcode
readers where these latter pieces are being processed,
or (ii) a failure on
the part of the Postal Service to use available barcode readers, or (iii) the
failure of USPS barcode readers to successfully
read the barcodes on
those pieces.
Resoonse:
As a preliminary
text of the DMCS
prebarcoding
matter,
language
mentioned,
require
No. MC95-1,
Subclass
where
Route condition.
destinating
where
could
The Carrier
at sites where
letters
Subclass
above
forward
is carried
It is also worth
subclasses
qualify
-
rates,
of the DMCS,
creation
in basic,
3-digit,
Route presort
SS-2 is
USPS-T-18,
was not created
as such,
but in
of an Automation
5-digit
rate was “only
manually.”
or Carrier
available
to letters
the mail, or at sites
p. 11, II. 13-15.
I believe
Although
the limitation
in the DMM.
observing
and rate categories
for lower
search
proposed
be entered
does the
nor explained.
the CSBCS is used to sequence
are sequenced
the Automation
mail, nowhere
only in Rate Schedule
defined
a comprehensive
the Postal Service
letters
for BRMAS
prebarcoding;
but it is neither
I have not undertaken
Docket
I note that,
where
that the DMCS
which
require
the minimum
(and the DMM)
a minimum
volumes
volume
have many
in order to
are presumably
predicated
Response
on operating
quantity
efficiency
to qualify
of Dr. John Haldi to USPS/NMS-Tl-17
Page 2 of 2
and handling
for the lower
Note that in my testimony
cost.
BRMAS
rates,
rates even where
a policy
stands
the pieces are handled
Seattle,
where
BRMAS
mail, and yet the Postal Service
in stark contrast
to the handling
their BRM mail is handled
there is no minimum
as discussed
I do not oppose
BRMAS
rate five times
Nevertheless,
allowing
in my testimony.
mailers
manually.
Nevertheless,
of mail for Nashua,
even more efficiently
charges
higher than that for BRMAS
Nashua,
to qualify
-
such
Mystic,
and
than most
Mystic,
mail.
for
and Seattle
a
Response
of Dr. John Haldi to lJSPS/NMS-Tl-18
Page 1 of 2
USPS/NMS-Tl-18.
Please refer to your testimony
at page 19, lines 5-l 2.
la1
Explain how seasonality
postage due calculations
could affect the accuracy
when sampling is used.
of BRM
(bl
Fully describe how the current sampling of 50 pieces of mail
each day at Nashua takes into account the seasonal volume
fluctuations
that you describe at page 19.
(cl
Is the 50.piece sample drawn from all of Nashua’s incoming
non-automatable
BRM, or are certain types of mail pieces
culled out before the sample is taken?
If the latter, please
describe the culling process and describe the basis for it.
m:
At Mystic
(a)
current
varies
rates,
postage
by weight,
Ounces
1
2
3
4
postage
on individual
illustrated
$0.32
0.55
0.78
1 .Ol
$0.11
._
._
-_
in the last column
seasonality
due calculations
occurs
periodically,
not daily.
pieces of non-automatable
At
BRM
as follows:
Non-Std
Surcharae
of the business
perspective,
sampling
FirstClass
Postaae
As shown
weight
and Seattle,
if the “mix”
Total
Rate
Per
Ounce
$0.10
0.10
0.10
0.10
so.53
0.65
0.88
1.11
$0.5300
0.3250
0.2933
0.2775
above,
reply envelope.
conceivably
BRM
Fee
the rate per ounce
From a purely
could affect
of arriving
varies
with
theoretical
accuracy
of BRM
BRM pieces,
by weight,
Response
of Dr. John Haldi to USPS/NMS-Tl-18
Page 2 of 2
were to vary systematically
mix actually
factual
changes
issue.
conducted
change
from one season
in any systematic
Mystic’s
experience,
over more than
throughout
remarkably
the year.
stable
if the periodic
regardless
sampling
any seasonal
Whether
is based on repeated
indicates
of when
should
has been
was taken.
(or more often),
be reduced
sampling
that the mix does not
the sample
quarterly
the
the year is a
That is, the rate per pound
occurs
changes
way throughout
which
10 years,
to the next.
Moreover,
the effect
or eliminated;
of
see my response
to USPS/NMS-Tl-27.
With
Service
samples
operates.
season
respect
could
“seasonality
manifest
system,
no possibility
exists
the Postal
that a sample
be or will be used in some other season.
at Nashua,
could
sampling
affect
I cannot
of BRM postage
in one
Under the
even begin to imagine
the accuracy
taken
how
due calculations
is used.”
(b)
See response
to a.
(cl
The incoming
sample
no pieces
incoming
mail on each and every day of the year that Nashua
Consequently,
circumstances
when
to Nashua’s
are culled
is drawn
from all of Nashua’s
out before the sample
is taken.
incoming
BRM, and
Response
of Dr. John Haldi to USPSINMS-Tl-22
Page 1 of 1
USPS/NMS-Tl-22.
Please refer to your testimony
at page 60, lines l-6, and provide your
best estimate of the annual impact on postal revenues if either of your
alternative
classification
and fee proposals were implemented
by the
Postal Service and the new classification
and fee were utilized by all
“bulk non-automation
BRM” recipients,
not just your three clients.
Resoonse:
Regarding
would
tender
the number
of BRM recipients
“non-automation
bulk BRM”
USPS/NMS-Tl-10.
It is my firm expectation
Mystic,
FilmWorks
and Seattle
nonautomation
Service
BRM.”
revenues
the iimpact shown
more than
would
probably
the Postal Service
in test year, see my response
that during
test year,
be by far the largest
On this basis, I estimate
in NMS-WP2.
1 percent
would
to which
Nashua,
recipients
that the total
to
impact
of “bulk
on Postal
range from two to not more than three times
In other words,
of the additional
revenues
the total
requested
impact
would
not be
by the Postal Service
Response
of Dr. John Haldi to USPS/NMS-Tl-23
Page 1 of 3
USPVNMS-Tl-23.
Please refer to page 60, lines 13-14,
(ii)
lb)
the share of incoming orders for which Mystic
currently uses BRM; and
the share of incoming orders for which Mystic was
using BRM immediately
before it began using the
weight averaging system;
(i)
(ii)
(cl
and indicate:
the share of incoming orders for which Nashua
currently uses BRM; and
the share of incoming orders for which Nashua was
using BRM immediately
before it began using the
incoming manifest system;
(0
(a)
of your testimony
the share of incoming orders for which Seattle
FilmWorks currently uses BRM; and
the share of orders for which Seattle FilmWorks
was
using BRM immediately
before it began using the
weight averaging system.
(4
(ii)
Resoonse:
(a)
As indicated
incoming
manifest
share of incoming
in my testimony,
system
orders
be a small percentage.
Business
a result,
Envelopes
in October,
Subsequently,
for the 12 months
my testimony,
about
Nashua
from October
distributed
ending
began using its
p. 9; also see my response
the
but it is believed
1994
and received
to
onward,
an ever-increasing
September
70 percent
does not know
that date,
have constituted
reply envelopes
represented
1994.
using BRM before
Reply Envelopes
of all customer
p. 8, Nashua
percentage
by Nashua.
1996,
Business
of Nashua’s
incoming
to USPSINMS-Tl-21).
As
Reply
mail (see
Response
of Dr. John Haldi to USPSINMS-Tl-23
Page 2 of 3
Please see my testimony,
(b)
providing
its customers
with
Business
has done so since its founding.
received
some prepaid
customers,
for reasons
Mystic.’
Aside
Mystic’s
incoming
incoming
orders
using the weight
FilmWorks
exclusively,
FilmWorks
are currently
system
is providing
BRM.
p. 16.
received
those
than to Seattle
customers
of prepaid
are currently
envelopes,
BRM.
all of Seattle
Likewise,
there,
virtually
all of
virtually
all
began
Seattle
Reply Envelopes
Nevertheless,
some prepaid
FilmWorks.
envelopes,
BRM.
Business
for reasons
than to
the Postal Service
As stated
with
of its
customers
Likewise,
before
and
has always
of prepaid
and has done so since its founding.
also has always
is
exclusively,
to those
for Mystic’s
its customers
of its customers,
orders
known
were BRM immediately
averaging
Mystic
Mystic
from a very small percentage
from that small percentage
orders
there,
Reply Envelopes
that are better
small percentage
percentage
As stated
Nevertheless,
envelopes
Please see my testimony,
(cl
p. 13.
envelopes
from a
that are better
Aside
Seattle
known
to
from that small
FilmWorks’
all incoming
incoming
orders
were
’ These occasional
customer prepaid envelopes are included in Mystic’s
sacks of BRM. Consequently,
they are included in the net weight of mail
received and Mystic pays postage on the envelopes even though the customer
has unnecessarily
put stamps on the piece. For this small percentage
of
envelopes, the Postal Service is thus paid twice.
Response
of Dr. John Haldi to USPS/NMS-Tl-23
Page 3 of 3
BRM immediately
before
averaging
for Seattle
system
the Postal Service
FilmWorks’
began using the weight
BRM.
Response
of Dr. John Haldi to USPS/NMS-Tl-24
Page 1 of 1
USPVNMS-Tl-24.
Please refer to
testimony
and
week, month,
volume mailer”
page 60, line 19, and to page 61, line 14, of your
specifically
indicate what volume of BRM received by day,
or some other period should be used to distinguish
a “high
from other BRM recipients.
Based on this question,
my ,testimony
to have referred
“high volume
mailer.”
My testimony,
threshold
it would
perhaps
have been more accurate
to a “high volume
BRM recipient”
at p. 48, lines 1-4, has three suggestions
for “non-automation
bulk BRM.”
to this interrogatory.
For additional
these thresholds,
see my responses
to USPSNMS-Tl-10
In my opinion,
whose
incoming
be described
to establish
automatable
Recipients
to e!stablish
volume
a weight
averaging
volume
such volume
an incoming
to describe
as a “high volume
acting
manifest
system.
concerning
any BRM recipient
minimum
thresholds
my suggested
would
of non-
minimum
BRM might
to
That is, it would
in its own self-interest,
for any recipient
of non-automatable
the basis
and 35.
BRM recipient.”
system
exceeded
provide
discussion
my suggested
that the Postal Service,
BRM whose
with
be appropriate
was at or above
appropriately
be my expectation
want
it would
rather than to
for a specific
These thresholds
for my response
for
threshold.
or might
not want
Response
of Dr. John Haldi to USPWNMS-Tl-25
Page 1 of 1
USPWNMS-Tl-25.
Please refer to your testimony
at page 20, line 13, and explain the basis
for your assertion that BRM sampling should take a postal clerk no more
than one hour per day.
Resoonse:
Nashua
is required
(by LR-SSR-148,
control
program.
Nashua
quality
verification
sample
methods
of 50 pieces.
complete
reason
has elected
The average
why Postal Service
1.
For additional
to use the Postal
in Part 2 of LR-SSR-148)
time required
that task is 50 to 60 minutes.
same task.
footnote
(described
Part 1, p. 37) to maintain
employees
discussion,
its own
Service
and take its own daily
by Nashua
employees
to
I have been unable to perceive
should
require
of any
more time to complete
see my response
to USPSNMS-Tl-33,
the
Response
of Dr. John Haldi to USPS/NMS-Tl-26
Page 1 of 2
USPS/NMS-Tl-26.
Please refer to your testimony
at page 12, lines 12-20, where you
describe Nashua’s cost to develop and operate its incoming manifest
system.
(a)
Is it your testimony
that the incoming manifest
initially developed for the purpose of calculating
due? If not, please explain.
system was
postage
(b)
Provide an estimate of all developmental
and operational
costs uniquely attributable
to the postage due calculation
function and explain the basis for that estimate.
Resoonse:
(al
With
respect
the question
lb1
to the incoming
manifest
is, unequivocally,
yes.
The incoming
system
manifest
that Nashua
incoming
system
already
orders through
an in-house
database
in my testimony,
operating
costs
of about
and the additional
each incoming
keying
[Business
had in place for entering
Nashua’s
when
to computing
own order entry
Nashua’s
operators
the answer
to
and tracking
the plant and out the door (as well as building
for marketing
purposes).
p. 12, lines 15-l 7, “Nashua
$45,000
must do when
Reply Mail] order.”
employees
postage
system.
As
incurs
for the daily verification
that operators
relate to the time that Nashua
attributable
at Nashua,
built on and drew on the computer
of customers
explained
system
annual
requirement
they process
These operating
costs
must spend on efforts
due; i.e., to efforts
To elaborate,
must make additional
not required
(i) costs
keystrokes
uniquely
by
are incurred
on each order
Response
because
creation
for Nashua’s
of Dr. John Haldi to USPWNMS-Tl-26
Page 2 of 2
of the incoming
own
film was returned
rolls of film),
use (that particular
in the plastic
and verification,
contained
The one-time
estimate
This cost,
BRMAS
’
costs
software,
indicates
customarily
required
solely
Donald
Mallonee
For additional
discussion,
with
of Nashua’s
new
own
by the manifest
represents
were described
(USPS-RT-8,
see my response
to produce
by Nashua,
that the Postal Service
USPS witness
a roll of
an
of the time and cost for in-house
is incurred
and which
whether
supplied
on account
is required
not needed
Part 1, p. 37.’
programming
which
a datum
cost of $10,000
MIS manager
of computer
the programming
which
in LR-SSR-148,
by Nashua’s
development
manifest.
canister
developmental
requires
datum
and (ii) costs are incurred
daily sampling
procedures
manifest
incurs
in Docket
the incoming
is analogous
with
respect
No. R94-1
not admitted
to
to its
by
into evidence).
to USPSINMS-Tl-25.
Response
of Dr. John Haldi to USPS/NMS-Tl-27
Page 1 of 2
USPWNMS-Tl-27.
Please refer to page 15, lines 3-4, of your testimony,
where you indicate
that the price-per-pound
for Mystic sacks is calculated through “periodic
sampling.”
(a)
Define
bl
On page 19, lines 5-7, of your testimony,
you state, “It is
no secret that the film-developing
business is somewhat
seasonal
. .” In your opinion, does the frequency
of
sampling used for Mystic adequately
account for this
seasonalitv?
“periodic.”
How often
is the sample
drawn?
Resoonse:
(a)
Please see my response
dated
to USPSNMS-Tl-4,
9/l 2/95 to Dave MacDonald
“Periodic,”
as defined
more often
as either
(item no. 4, USPS letter
containing
by the Postal Service
confidential
in that letter,
information).
is quarterly
or
party feels warranted:
As we agreed upon today, the sampling will be done
once an A/P (quarter) and a new postage factor will
be developed at that time. If, at any time, the Postal
Service or Mystic Color Lab determines
that sampling
once an A/P is not providing a wide enough variety of
mail, the sampling will be increased.
Prior to 9/l 2/95,
documents
confidential
(bl
As indicated
sampling
was apparently
nos. 1, 2 and 3 listed in USPSNMS-Tl-4
done semi-annually;
see
(containing
information)
in my response
which
is based on repeated
years,
indicates
to USPS/NMS-Tl-18,
sampling
that throughout
conducted
Mystic’s
experience,
over more than
the year the mix of incoming
10
BRM does
Response
not change
in any predictable
the rate per pound
deviation,
affected
of Dr. John Haldi to USPSINMS-Tl-27
Page 2 of 2
regardless
way or to any noticeable
has been generally
stable,
of when the sample
by any seasonal
change
in volume
subject
was taken,
extent.
That is,
to normal
statistical
and has not been
Response
of Dr. John Haldi to USPS/NMS-Tl-28
Page 1 of 1
USPSINMS-Tl-28.
Explain the basis for your estimates on page 21 of your testimony
that it
takes a postal clerk 1.4 to 2.0 hours per day to weigh and rate Mystic’s
BRM, and 1.5 to 2.25 hours a day to weigh and rate Seattle FilmWorks
BRM.
Resoonsg:
As indicated
FilmWorks
planning
which
annual
in my response
each weighs
their respective
their employees
volume
to complete
daily workloads.
require
facilities
FilmWorks
to weigh
and record
each firm receives.
My estimate
that process
(in Seattle).
Mystic
mail daily,
My estimate
why Postal Service
the same task.
Postal Service
Seattle
every sack of incoming
of BRM which
perc:eive of any reason
to USPSINMS-Tl-29,
and Seattle
for purposes
of
is based on the time
each sack,
as well as the
I have been unable to
employees
should
require
is also based on personal
the mail for Mystic
more time
visits
(in New London)
to the
and
Response
of Dr. John Haldi to USPS/NMS-Tl-29
Page 1 of 4
USPS/NMS-Tl-29.
In your opinion, will the weight averaging approach to calculating
BRM
postage due, as used by Mystic and Seattle Filmworks,
yield as accurate
an estimate as the incoming manifest approach used by Nashua?
Please
explain your answer.
Resvonse:
The situation
quite different
The methods
used to calculate
in Business
used by other
Reply Envelopes,
virtually
because
reply envelopes
developed
mailers
envelopes
commingling,
result
FilmWorks,
One consequence
originally
postage.
FilmWorks
to explain
below,
is
in my testimony.
due for BRM have evolved
that either firm has ever distributed.
customer.
envelopes,
as I endeavored
and, as explained
and Seattle
for many years distributed
prepaid
and Seattle
in response
each in its own way is
and accurate.
envelopes
Service
to BRM at Mystic
postage
circumstances
At Mystic
received
respect
from that at Nashua,
to the different
appropriate
with
as well)
arrive
along with the gradually
precluded
At Nashua,
use of a weight
necessity
has been the incoming
orders
on the other
prepayment
Mail Reship Program
with
Nashua
may now
and customer
commingled.
mix of the two types
This
of
to calculate
BRM
was indeed the mother
of invention,
and the
system,
has
that the Postal
system
manifest
averaging
hand,
by the
(and which
Reply Envelopes
WV, completely
changing
are
are the only type of reply
Nashua,
is that Business
in Parkersburg,
those
that require
of the Priority
in conjunction
all incoming
Response
The weight
averaging
by the New London
Seattle
does yield,
from
Postal Service,
FilmWorks
a highly
for Mystic
reliable
undergo
little or no change
weigh
to allow
the Postal
has done for Brooklyn
sample,
reliability
and/or
Union
and Seattle
would
canister
of the weight
FilmWorks,
of postage
due.’
taken
by the
and Seattle
mix of products
of time (e.g.,
in which
incoming
Courtesy
the Postal Service
more often,
likely be de minimis.
both the
new rolls of
as they did 10, 15 and 20
averaging
to eliminate
Gas in the Prepaid
it could take samples
and accuracy
over long periods
the same today
Service
Courtesy
and in my
mail at Mystic
stable
for
and (iv) the fact ,that the products
film and the plastic
essentially
Prepaid
or more pieces)
all incoming
film predominate),
for a roll of 35mm
At Mystic
(a thousand
due, as used
Post Office
of yielding,
estimate
of BRM, (iii) the comparatively
years ago). lt may be that accuracy
sufficient
and by the Seattle
and accurate
(ii) the fact that virtually
film are supplied
BRM postage
Union Gas - is capable
(i) the large samples
(rolls of 35mm
themselves
container
Brooklyn
consists
received
to calculating
- and as also used in the Postal Service’s
Reply Mail test with
This results
approach
Post Office
FilmWorks
opinion
of Dr. John Haldi to USPS/NMS-Tl-29
Page 2 of 4
system
is
fees altogether,
as it
Reply Mail test.
could take a larger
but any further
increase
in
I say this based on the fact
’ As stated in the memorandum
from Richard E. Kunz (discussed in my
response to USPSINMS-Tl-3):
Over the three-month
period for use of sample data, ,fhe postage
charged should come very close to the actual postage which
would be charged if each piece were counted and weighed. [at 3.1
[Emphasis added.1
Response
that for years Mystic
and Seattle
mail daily, for purposes
company
weight
has found
of planning
to segregate
incoming
orders
be appropriate
system
discussed
in my response
averaging
of lowest
manifest
Comparing
incoming
manifest
and my response
of Business
Post office
is a very low-cost
the viewpoint
endorsed),
correlation
and each
between
the gross
Were
relieve
Reply Envelopes,
to implement
Nashua
all of
it
a weight
of the recurring
costs
to USPSINMS-Tl-26.
of non-automatable
the incoming
daily workloads,
BRM, or if some day essentially
This would
for recipients
previously
Nashua’s
were to consist
at Nashua.
all its incoming
of rolls of film to be processed.
for the Parkersburg
averaging
Weight
each has weighed
its respective
mail and the number
the Postal Service
might
FilmWorks
a very high and consistent
of incoming
Nashua’s
of Dr. John Haldi to USPS/NMS-Tl-29
Page 3 of 4
bulk BRM there
combined
the weight
system.’
accuracy
system
system
cosf (which
averaging
for the Postal
and
is no cost whatsoever.’
principle
system
Service,
From
the Postal Service
is undoubtedly
better
has
than
It may even be “optimal.”
of the weight
is difficult
to USPS/NMS-Tl-32,
averaging
because,
accuracy
system
with
as discussed
of Nashua’s
’ Weight averaging is thus similar to BRMAS, which
Postal Service and involves no cost to the recipient.
Nashua’s
in my testimony
incoming
is also low-cost
to the
* All recipients of non-automatable
bulk BRM have an exact count of
orders received, since each order is entered into the computer
system.
The
weight averaging system would be extremely accurate and reliable if the Postal
Service were to adopt a piece-pound
rate design for First-Class bulk mail, rather
than base rates for First-Class bulk mail on a structure designed for single-piece
rates.
-
Response
manifest
over time.
system
has undergone
With additional
even more accurate.
that would
increase
cost somewhat
described
of Dr. John Haldi to USPSINMS-Tl-29
Page 4 of 4
a “learning
investment
Nashua
more to implement
in my response
and effort,
is presently
the accuracy
curve”
further.
effect
it can be expected
contemplating
Those
additional
refinements,
than the ones already
to USPS/NMS-Tl-32.
and has improved
to become
refinements
however,
implemented,
would
as
Response
of Dr. John Haldi to USPS/NMS-Tl-30
Page 1 of 1
USPS/NMS-Tl-30.
Assume that the weight averaging systems used by Nashua [sic] and
Seattle Filmworks
cost at least twice as much per piece (to calculate the
postage due) as the Nashua incoming manifest system costs.
How
would your proposal, as set forth in your Appendix II, change?
Resoonse:
I assume
that you intended
used by the Post Offices
that serve Mystic
The Postal Service’s
manifest
system
you posit,
On the assumption
averaging
Seattle
FilmWorks’
postulated
system
postage
--..-
co-exist
from Nashua’s
assumption
that the cost resulting
uses for Mystic’s
which
not change,
from the
and
as much per piece as at Nashua
below
using these two different
within
Filmworks.
incoming
II need not and would
the Postal Service
BRM were twice
systems
and Seattle
Based on-the
still be quite comfortably
why BRM recipients
due cannot
in Appendix
here - namely,
which
incoming
- the unit cost would
exists
unit cost that results
set forth
averaging
(not Nashua)
is quite low (see NMS-WP2).
my proposal
weight
to refer to the weight
the proposed
2 cents.
approaches
fee sub-category.
No reason
to calculating
Response
of Dr. John Haldi to USPS/NMS-Tl-31
Page 1 of 1
USPS/NMS-Tl-31.
In your testimony
at page 41, lines 3-4, you state that the requirement
of pre-barcoding
is actually met by both Mystic and Seattle FilmWorks.
What information
is contained in these barcodes?
Is it your contention
that these barcodes meet the BRMAS ZIP+4 requirements?
Resoonse:
The barcodes
by their customers
address,
assigned
barcode.
- e.g., the ZIP+4
Obviously,
and Seattle
to mail rolls of film contain
and a corresponding
appearance
mail.
on the Mystic
however,
under the BRMAS
BRMAS
Authorization.
BRMAS
ZIP + 4 requirements,
address
neither
program
FilmWorks
a PO Box number,
In all respects
and barcode
the box number
because
BRM envelopes
a ZIP + 4
concerning
outward
- they resemble
nor the barcode
BRMAS
has been
there has been no application
Based on this technicality,
nor is it my contention
they do not meet the
that they do.
used
for
Response
of Dr. John Haldi to USPWNMS-Tl-32
Page 1 of 2
USPSINMS-Tl-32.
Please refer to your testimony
at page 11, lines 15-l 6, and describe
refinements
implemented
by Nashua to make its incoming manifest
system more accurate.
the
Resoonse:
To date, three
easy to explain.
operators,
plastic
particular
pertaining
emphasis
to whether
a training
program
on the necessity
The first two are
for all of its
to enter accurate
the film was returned
with
or without
that is customarily
supplied
with each new roll of film.
refined
the pre-determined
weights
of individual
customer
iterns contained
the
Second,
in the
envelopes.
The third
of eliminating
refinement
old, unused
is more complex.
from its database
for more than two years.
customer
account
(ii) the customer
the outside
numbers
with
Nashua
account
ceased
numbers
its former
that went
practice
of automatically
creates
the following
an old (eliminated)
also includes
of the envelope,
the Postal Service’s
customer
The previous
time to time (i) a customer
number
instituted
have been made.
canister
Nashua
order,
refinements
First, Nashua
with
information
important
his/her
(now defunct)
number
account
and (iii) that order also happens
sample.
The Postal Service
and the old account
number. ’ However,
employee
unused
eliminating
problem.
account
practice
From
sends in an
number
to be selected
records
the Nashua
on
in
the tracking
employee,
upon
’ The Postal Service employee does not bother to record the customer’s
name and address when an account number is available on the outside of the
Response
opening
the envelope
(eliminated)
account
assign the customer
new account
Service
number
to enter the order cannot
in the computer.
number,
The problem
cannot
with the new account
as measured
and attempting
a new account
number.
employee
of Dr. John Haldi to USPS/NMS-T’l-32
Page 2 of 2
which
Nashua’s
use the old account
number
by the sample
standard
and process
this creates
fails to coincide
practice
is to
the order under that
is that the Postal
number
in the incoming
find the old
to locate
manifest,
the envelope
and the postage
with the postage
due
due as recorded
in the manifest.’
When
the manifest
“sample”
column
postage
shows
“zero,”
enable the piece to be located
actually
particular
included
in the manifest
discrepancy
Postal Service,
due is compared
because
in the manifest.
its revenues
“manifest”
the available
Thus,
(under a different
is thus handled
and leaves
with
postage
information
even though
account
due,
does not
the piece is
number),
in a way that is most favorable
this
to the
fully protected.
envelope (see my response to USPS/NMS-Tl-38
for additional discussion
on
this point).
This is an important
reason why the sampling can be completed
in
no more than 60 minutes (see my response to USPSINMS-Tl-25).
’ Although Nashua has ceased eliminating
old account numbers, this
problem continues to recur. Over time, however,
it will gradually disappear
Response
USPS/NM-T1
of Dr. John Haldi to USPS/NMS-Tl-33
Page 1 of 2
-33.
Please explain the basis for your proposal to define bulk BRM as “100
pounds per day. or 500 pounds per week, or 2000 pounds per month,”
as described at page 48, lines l-4, of your testimony.
Resoonse:
Please see my testimony.
and rate individual
to weigh
average
131.
in Docket
As indicated
qualifying
threshold
unit costs
qualifying
threshold
mail with
respect
my minimum
volumes
received
by Nashua,
smaller
perhaps
Mystic
the cost to
cost of processing
Appendix
I, p. l-2, line
at my suggested
reduce
the cost per
and, for volumes
above
the minimum
to be lower
The minimum
to assure
yet.
(i) homogeneity
of qualifying
and (ii) a low unit cost.
At the same
is intentionally
or Seattle
(nevertheless,
all, of the smaller
in my response
lower
threshold
were
should
be expected
suggested
some,
to USPS/NM-T1
set far below
FilmWorks,
so as to enable
still large) volumes
through-the-mail
-10) to qualify
the
of BRM
film processors
for the lower
rate that
unit cost.
For reasons
minimum
of that amount
system
expect
average
to USPS/NM-Tl-35,
to cost characteristics,
(including
I would
(see my testimony,
is thus high enough
of relatively
reflects
No. R94-1
would
recipients
mentioned
manually
the weight-averaging
threshold,
If the Postal Service
per piece, the estimated
in my response
piece to a small fraction
time,
BRM pieces
at least 10 cents
BRM manually
p. 47, lines 14-21.
threshold
explained
be stated
in my testimony
in terms
at p. 47, it is suggested
of pounds.
In terms
that the
of the expected
Response
number
of pieces,
minimum
required
average
weight
for suggesting
weight
of Dr. John Haldi to USPS/NMS-TV33
Page 2 of 2
on average
it is perhaps
for originating
First-Class
of non-automatable
a higher
averaging
minimum
system
desirability
certain
of setting
is in recognition
for an individual
circumstances.
to interrogatory
monthly,
bulk mail (assuming
bulk BRM exceeds
BRM may cost more than accepting
In my response
a little larger than the 500.piece
recipient
an originating
one ounce).
The reason
of the fact that instituting
of non-automatable
a
bulk
bulk mailing.
USPSINMS-Tl-10,
as opposed
that the
I discuss
to daily or weekly,
the possible
minimums
under
Response
of Dr. John Haldi to USPS/NMS-TV34
Page 1 of 1
USPS/NM-Tl-34.
On page 12, lines 5-8 of your testimony,
the estimated postage on the
Nashua manifest is shown as a percentage of the postage for the pieces
in the sample for four different months.
Please confirm that for all four
months shown, the Nashua manifest underestimates
the actual postage
due.
Resoons:
Confirmed;
percent.
Of course,
compensated
responses
--
in October,
--
as stated
for postage
to USPSNMS-Tl-1
1996 that number
elsewhere,
has now climbed
the Postal Service
due based on its daily 50-piece
and 12 for more detailed
to 98.3
is fully
sampling;
information
see my
Response
of Dr. John Haldi to USPS/NMS-Tl-35
Page 1 of 3
USPS/NM-Tl-35.
Please refer to your testimony
at page 21, lines 5-10. What would the
per-piece costs be for a mailer whose volume is exactly the minimum
definition of bulk (100 pounds per day) you propose at page 48, lines l2, assuming all pieces average exactly two ounces (page 48, fn. 67).
Resoonse:
‘four
question
unspecified.
obviously
Let me preface
example,
it would
averaging
system
weighed,
or (ii) whether
manifest
presents
depend
the answer
facts
that “it depends.”
For
of sacks that woulcl
the BRM recipient
25 pounds/sack)
an average
sack (which
(the “mailer”)
used a weight-averaging
is generous),
daily to complete
productive
quantities),
left
used a weighthave to be
used an incoming
system
and IF an average
had to be weighed,
of 3 minutes
to ascertain
factor
for a manual
operation,
for Mystic
and Seattle),
weighing
required
and for 800 pieces the unit cost would
cost per
(the figure
cost would
amount
minimum
15
and IF the appropriate
is 1.53322
then the daily Postal Service
of each
an additional
and IF the average
operation
note that this unit cost is for my suggested
would
of four sacks
and record the weight
and IF the Postal Service
the billing
(which
and IF the Postal Service
hour for a mail clerk is $23.952,
piggyback
$16.53,
important
system
(averaging
effective
with
the Postal Service
and, if so, the number
seem most likely for minimum
minutes
by stating
on (i) whether
IF the Postal Service
required
a hypothetical
amount
to $0.021.
volume,
used
to
Please
and it is far less
Response
than the 10.19
manually
per piece for BRMAS
(see my testimony,
assumptions
minutes
cents
of Dr. John Haldi to USPS/NMS-Tl-35
Page 2 of 3
and hypothetical
weighing
higher volumes,
increase,
Appendix
conditions
the 4 sacks,
the number
be expected
Alternatively,
seems highly
for the billing
of sacks and the time spent
case”
for minimum
assumption),’
operation.
weighing
12
With
sacks would
not change,
used an incoming
volumes),
hence unit
piggyback
employee
factor
manifest
and IF the sample
(at $23.952
is 1.717276
then for 800 pieces the daily Postal Service
system
and IF the Postal Service
and IF the daily sampling
by the Postal Service
IF the appropriate
spends
to decline.
IF the recipient
unlikely
should
handles
Note that under the
here, the Postal Service
and 15 minutes
30 pieces each time it took a sample,’
minutes
I, p. l-2, line 13).
but the time for the billing operation
cost would
“worst
that the Postal Service
were taken
required
cost would
’ See LR-SSR-148,
p, 103; this is the indicated
the range of your hypothetical.
daily (a
36
hour),3 and
used for Nashua),
amount
sample
sampled
approximately
per productive
(the figure
(which
to $24.68,
size for volumes
and
in
’ Continued daily sampling is required only when the discrepancy
between
the postage due on the sample and the manifest is not less than 1.5 percent
for five consecutive
days; i.e., if the discrepancy
is less than 1.5 percent for
five consecutive
days, the frequency
of the sampling can be reduced.
’
This time is three-fifths
of the maximum one hour assumed for Nashua,
of 50 minutes per
where the sample size is 50 pieces per day. At three-fifths
day (the lower bound assumed for Nashua), or 30 minutes per day, the unit
cost would be $0.026.
Response
the unit cost would
of Dr. John Haldi to USPS/NMS-TI-35
Page 3 of 3
amount
to $0.031,
based on stated
conservative
assumptions.
As the largest
bulk BRM, Nashua,
based on average
other
lower-volume
and therefore
Mystic
costs
lowest
and Seattle
where
FilmWorks
their costs
- but nevertheless
cost recipients
have no problem
are below
low-cost
of non-automatable
average,
with
benefitting
- BRM recipients.
rates
these
Response
of Dr. John Haldi to USPWNMS-Tl-36
Page 1 of 2
USPS/NM-Tl-36.
Please refer to page 14, fn. 12, of your testimony.
Is it your assertion
that the automation
equipment
used to process BRMAS has been
purchased and deployed solely or primarily for the processing of BRMAS
mail? Please provide your best estimate of the total “high capital outlay”
attributable
to automated
equipment and the percentage
of this outlay
which should be attributed to BRMAS.
Nowhere
equipment
appears
do I assert that the Postal Service
solely or primarily
to totally
elaborate
decided
miss the point
on my original
to procure
multi-purpose
instantly
and accurately
Having
equipment,
discounts
wants
through
equipment.
straightforward,
Prepaid Courtesy
weigh
of an ounce,
many millions
might
Your question
Let me therefore
that the Postal Service
greater
and (ii) that cost
of dollars
usage,
it would
plants
up to 500 pounds
in this new,
then feel motivated
In other words,
an
virtually
$2.5
million
more efficient
to provide
as it has done with
rate
its
appear that the Postal Service
unit costs only when they have been achieved
of large sums of money,
cost-effective
mail.
to make.
hypothetically,
automation
to each of its major mail processing
encourage
to pass along lower
the investment
Suppose,
to l/1000
the Postal Service
of BRMAS
I was endeavoring
scale (i) that could
invested
that would
automation
point.
and deploy
electronic
per scale.
for the processing
has purchased
approach
Reply Mail test)
but not when
is used (excepting,
a simple,
of course,
in the
Response
of Dr. John Haldi to USPS/NMS-Tl-36
Page 2 of 2
The Postal Service
purchase
of automation
equipment
Report to Congressional
Longer
and Producing
Taking
volume
of non-BRMAS
should
witness
Mallonee
incurred
To sum up, when
has spent a substantial
everything
equipment
is taken
into account,
New London
and, more recently,
manifest
system
-
at Nashua.
BRMAS
and by USPS
programming
current
over the
the Postal Service
to get the unit cost of BRMAS
by the weight
Post Offices
only,
was initiated.
the level that long has been achieved
and Seattle
outlay
equipment
No. R90-1
programs
and the
(see
and (ii) all of the recurring
program
sum of money
(Feb. 22,
into the nationwide
to keep the BRMAS
last 10 years or so since the BRMAS
is Taking
of this capital
Pham in Docket
No. R94-1,
Automation
is for capital
on the
See GAO Briefing
mail (see NMS-WPl)
on automation
that went
$5 billion
GAOIGGD-95-89BR
This estimate
by USPS witness
by all facilities
Service
some small percentage
to BRMAS.
in Docket
1982-1997.
of BRMAS
mail processed
(i) all time and effort
described
“Postal
of the volume
certainly
program
costs
in the years
Committees,
account
be attributed
and excludes
that it will have spent over
Less than Expected,”
1995).
USPSlNMS-Tl-48).
estimated
averaging
system
down
at the
by the incoming
to
Response
of Dr. John Haldi to USPSINMS-Tl-37
Page 1 of 1
USPS/NM-Tl-37.
Please refer to your testimony
at page 5, lines 10-l 1, where you state
that “through-the-mail
film processors account for approximately
6
percent of the domestic film processing
market.
Please identify the
sourcels) for the 6 percent figure and provide the underlying
calculation
for this number.
Resoonse:
The 6 percent
Photo Processing
Copies
figure
industry
of the pertinent
The International
production
shares,
14 percent
increased
postage
The market
number
from two sources:
(1 I the 7995 international
Report,
and (2) the Eighth
Annual
page from each report
Photo Processing
by value.
that the share of market
from
comes
You might
held by “Mail
in 1986 to 6 percent
of rolls processed.
shown
Report.
are attached.
Industry
Report
is based on
note that the 1986-1994
Order Macrolabs”
in 1994.
rates may have contributed
shares
Robinson
in the Robinson
data indicate
has declined
Inconsistent
steadily
mail service
to this decline.
Report
are based on the
and
A"'31/96
.m
16:21 FM 13044281457
NASEUAPEOTO
covering worldwide
amateur/professional
phQt0 processing
sensitized photographic
materials markets
Published by:
Photofinishing
neuslnc,
10915 Bonita Beach Road, Suite 1091
Bonita Springs, FL USA 33923
Tel: 941-992-4421 Fax: 941-992-6328
1SSN1084-2233
-
lo/al/o6
m
16:21
FM 13044281457
NASHUAPHOTO
@JO06
Photo ProGeuing Ma*:
ClJ
fi+J
PN
Mortha8outhAnwioa
Apparently, interest in photography is reviving, since the number Of households having al IefiSt one photographer
jumped 2.9% h 1994.
Table 2-19
. . Households With At Least Qtte Adult PhotoaraDhec
Millions of Households
haI
21.0
1988
20.4
1989
19.2
1990
18.6
1991
18.2
1992
17.6
1993
18.1
1994
Source:
Narimal Drmogmphicr
&
Lfaylcs
(NDLJ
baure 2-2
Ll
Mail Order
Macrolabs
lzl
Captive
Macrolabs
cl
MinllablOnSide Systems
Wholeeale
Macrolabs
1986 1987 1988 1989 1990 1991 1992 1993 1994
Source: Phorofinishing
News. Inc.
Table 2-11
U. S_Phot of mishi na Production Shares fbv Volume)
g@1987~l@g$!kjQ~199;11993l$J
14%
Mail Order Macrolabs
17%
Captive Macrolabs
MinilablOn-Site Systems 25%
Wholesale Central Labs 45%
12%
9%
8%
8%
7%
7%
6%
6%
18%
19%
20%
21%
22%
27%
43%
30%
42%
32%
40%
34%
37%
36%
35%
21%
36%
20%
37%
19%
35%
36%
37%
Source: Photofinishing
@ 19% Photofinishing News. Inc.. Bonira Springs, FL U.S.A. 33923
--~.~
40%
News. Inc.
2-7
10/31/96
TElJ 16:20 FM 13044261457
NASHUAPHOTO
The Eighth Annual Robinson Report:
The U.S. Consumer Imaging Business in 1995
with Forecasts for 2000
..
Ian & Doug Robinson
Photographic ConsultantsLtd.
6 Walden Street
Concord, MA U.S.A. 01742
fax: 508-287-5135
phone: 508-287-5130
Table 4-l. Consumer Color Negative Rolls Processed, 1892 to 1995, by Business
Segment: Wholesale, Vertically Integraled, Mail Order and On-Site [Millions
of Rolls, lncludlng Single-use)
1992
1993
Wholesale
1994
i
Fractlon
1995
260
275
0:;460
100
Vertical
0.464
107
0.177
Fraction
42
Mail Order
0.160
38
0.074
Fracllon
0.064
.
Central Lab
Sublotal...
402
420
0.712
Fraction
163
On-slte
0.706
173
0.286
Fraction
0.292
Total Consumer
CN Rolls Processed
5252f
550’
585
593
Total Consumer
CN Rolls Sold
551
602
801
637
Source: Photographic Consullanls Ltd.
Response
USPS/NM-T1
of Dr. John Haldi to USPS/NMS-Tl-38
Page 1 of 3
-38.
In your testimony,
describe Nashua’s
at page 9 (lines S-15) and page 10 (lines l-71,
current incoming manifest system.
you
(a)
As a general principle, would you agree that the if the
Postal Service is drawing a sample of incoming BRM pieces
to verify whether the mailer later calculates the correct
postage due, that the identity of the pieces in the sample
should be unknown to the mailer?
fb)
If the Postal Service is unable to draw a sample that is
unknown or unidentifiable
to the mailer, how can the Postal
Service be sure that the mailer will not focus on the sample
and be less careful about the accuracy of the postage due
calculation
on the large remainder of the mail?
(c)
Under Nashua’s current incoming manifest system,
Postal Service draw a sample that is unknown or
unidentifiable
to Nashua?
does the
m:
(a)
I agree that the identity
to employees
entries
(b)
of the BRM recipienf
that create
As preface
of the pieces
the incoming
to responding
in the sample
(Nashua)
conditions
interrogatory
to the situation
accurately
because
Second,
all information
those
Nashua
employees
and data which
data are critical
for data
manifest.
to this part of the interrogatory,
are not applicable
be unknown
who are responsible
state first that the hypothetical
part c, supra.
should
to Nashua’s
which
I would
you posit in this
at Nashua;
please see
have been trained
they
like to
record
internal
to enter
for each order
processing
and data
Response
collection
system,
whether
of Dr. John Haldi to USPS/NMS-Tl-38
Page 2 of 3
with the exception
the film was mailed
are customarily
you posit,
supplied.
I believe
the BRM recipient
accuracy
in plastic
of only one entry,
which
canister
new rolls of film
Even under the hypothetical
that the Postal Service
will not focus
of the postage
in which
due calculation
conditions
can be reasonably
on the sample
is
which
sure that
and be less careful
on the large remainder
about
of the
mail.
Id
When the daily sample
is taken
number
at Nashua,
records
the tracking
address
of the customer
if an account
outside
of the envelope,
and then reinserts
and the account
mail.
Unless the Postal Service
which
should
he/she
subsequently
manifest
opens the envelope
in the sample
that the sampling
to “rigging.”
on the
into the arriving
marks the envelope,
no need exists
employee
(and which
who
the data for the incoming
that a particular
envelope
has
that day.
innuendo
at Nashua
is not available)
explicitly
and records
employee
(or the name and
the envelope
does not do), the Nashua
The inescapable
designed
employee
will have no way of knowing
been included
number
number
not be done and for which
presumably
the Postal Service
accompanying
may somehow
this interrogatory
be “rigged”
At the same time,
a number
of other
to stress that Nashua’s
incoming
manifest
here is
- or be subject
interrogatories
system
were
may have a
Response
tendency
(or “bias”)
2, 12 and 34).
Nashua’s
evidence
random,
system
offers
to underestimate
to the Postal Service)
of the third
postage
due (see USPSINMS-Tl-l ,
be noted for the record
that the sampling
Recurrence
Tl-32
to underestimate
It should
manifest
extra payments
of Dr. John Haldi to USPSINMS-Tl-38
Page 3 of 3
procedure
problem
yet further
and not “rigged.”
evidence
that any tendency
postage
inescapably
constitutes
is not “rigged”
discussed
due (which
taken
requires
strong
in any way.
in my response
that samples
for
to USPWNMS-
at Nashua
are
Response
of Dr. John Haldi to USPVNMS-Tl-39
Page 1 of 3
USPS/NM-Tl-39.
Please confirm that the Postal Service has recently experienced
a
(a)
problem with Seattle FilmWorks applying the wrong ZIP + 4 Code
and/or barcode in the return address of some of its BRM pieces.
lb)
Please describe in full when and how the problem
all steps that have been taken to correct it.
(cl
Please indicate how many outgoing envelopes with the wrong
ZIP+4 Code and/or barcode were printed and distributed
to the
mailing public and how many have been mailed in to Seattle
FilmWorks.
(d)
Please provide
involved.
(e)
Please provide copies of (i) all correspondence
between the Postal
Service and Seattle FilmWorks which addresses this problem and
(ii) copies of all Seattle FilmWorks internal correspondence
and
other documents
which pertain to this problem.
sample
copies
of the Seattle
developed
FilmWorks
and
BRM pieces
Resoonse:
(a)
Seattle
return
FilmWorks
address
post card.
did apply a wrong
of a promotional
ZIP+4
mailing
Code and barcode
that contained
Please note that the post card obviously
in the
an attached
could
not be and
was not used to send in rolls of film for development.
The problem
which
Seattle
this interrogatory
reply envelopes
non-automatable
were processed
not included
weight
which,
refers had nothing
when
bulk BRM discussed
separately
(perhaps
in any sack where
averaging.
returned
to do with
in large numbers,
in my testimony.
on automation
postage
to
Filmworks’
constitute
the
The post cards
equipment)
due is computed
BRM
and were
by means of
Response
(b)
Seattle
FilmWorks
three PO Boxes.
receives
In addition,
authorizations
are for cards only,
only.
Number
department
year,
when the promotional
corrected
Seattle
mailings.
BRMAS
printed
in the
BRM cards with
the PO Box
occurred
sometime
mailing
in late July/early
was sent out.
have been double-checked
prior to dissemination
August
of this
Subsequent
and cleared
to the public,
for letters
with the
and the error has been
and not repeated.
FilmWorks
envelopes
has not printed
with the wrong
ZIP+4
or distributed
Code and/or
to preceding
part a. It did print and distribute
Box Number
and ZIP+4
the response
confidential
Code.
Responses
rate to promotional
information.
that type of mailing,
percent
Two
ZIP + 4 Code that was authorized
The problem
to
also has four BRMAS
arose was that someone
inadvertently
only.
Postal Service
pre-addressed
and the other two are for one-ounce
which
and corresponding
mailings
FilmWorks
it uses for promotional
The problem
promotional
in BRM envelopes
Seattle
which
marketing
-
orders
authorizations
letters
(cl
of Dr. John Haldi to USPS/NMS-Tl-39
Page 2 of 3
mailings
Based on general
the response
to the public
barcode;
see my response
cards with
the wrong
are still being received,
is considered
industry-wide
rate can range from
to as high as 4 or 5 percent.
any
and
proprietary
and
experience
less than
PO
1
with
Response
fd)
Submitted
(e)
The problem
as Library
attention
of Seattle
Postmaster
Reference
to which
representative.
Then,
of Dr. John Haldi to USPS/NMS-Tl-39
Page 3 of 3
this interrogatory
FilmWorks
Subsequently,
Lee Salazar,
on September
Mr. Richard
Earl (copies
of these two letters
in the possession
pursuant
refers was brought
to the
by a Postal Service
on August
Postmaster,
6th, in what
letter,
desired,
verbally
Seattle
Metselaar’s
already
LR-NMS-2.
19th John
concerning
Metselaar
wrote
to
the problem.
was more or less a reply to Mr.
E. Kunz of the USPS wrote
containing
confidential
of the Postal Service,
to a non-disclosure
agreement).
to Ms. Mich
information
and would
are
be offered,
if
DECLARATION
I, John Haldi,
declare
under penalty
the foregoing
answers
are true
and correct
knowledge,
information
and belief.
of perjury
that
to the best of
Dated:
-
my
CERTIFICATE
OF SERVICE
I hereby certify that I have this day served this document
upon all participants
of record in this proceeding
in accordance
with Section 12 of the Rules of Practice.
November
7, 1996
-