The US Postal Service claims the Postal Regulatory Commission overstepped its authority in September when it issued an “Order Adopting Analytical Principles Regarding Workshare Discount Methodology“, which it intended to use as a framework for assessing the validity of proposed worksharing discounts. The USPS appealed the PRC’s action to the DC Appeals Court, and has filed its initial brief: Read the rest of this entry »

Washington, DC – The Postal Regulatory Commission today issued Order No. 536 in Docket RM2009-3 finding that First-Class Single-Piece and Presort mail have a worksharing relationship and therefore a linkage when setting price discounts. Worksharing refers to activities such as sorting and transportation that are performed by the mailer instead of the Postal Service in exchange for price discounts.

Under section 3622(e) of the Postal Accountability and Enhancement Act of 2006 (PAEA), workshare discounts for market-dominant products are limited to the costs avoided by worksharing. The last time the Postal Service adjusted its rates, it contended that under the PAEA, this limitation only applies below the level of individual products. The Commission established Docket RM2009-3 to solicit public input and develop a full record on issues concerning the proper interpretation, scope, and application of section 3622(e).

Today, the Commission has reaffirmed that the section 3622(e) limitation on the size of workshare discounts applies to discounts between different products, such as Single-Piece and presort First-Class Mail, which serves the same market as a comparable product such as single-piece mail that is not workshared. The Commission concluded that:

• There is a large subset of Single-Piece First-Class mail that serves essentially the same market as presort First-Class Mail, and that a worksharing relationship exists between the two groups;

• The benchmark currently used to measure avoided costs for presort First-Class Mail is obsolete; and
• Because Standard High Density and Standard Saturation Mail serve separate markets, the section 3622(e) limitations on workshare discounts do not apply to the rate relationship between those two categories.

The Commission has also established guidelines to help determine the scope of worksharing activities. The Commission is initiating Docket RM2010-13 to consider proposals to identify appropriate benchmarks to use to measure the costs avoided by worksharing and establish discounts in the future.

STAMFORD, Conn., August 26, 2010 – Pitney Bowes Inc. (NYSE:PBI) today announced it is opening a new domestic mail presorting facility in Jacksonville, Florida. The new site is Pitney Bowes’s first mail services facility in the Florida market and will expand its services and capabilities in the South. The Florida facility, which will open its doors in November, will offer mailers the opportunity to benefit from postage discounts, increased mailing efficiencies and delivery optimization via Pitney Bowes’s nationwide presort network.

Located at 8551 Industrial Drive, Jacksonville, the facility will have the annual capacity to presort more than 40 million pieces of First-Class™ letter mail and Standard-Mail® in its first year of operation. The 40,000-square-foot center will employ approximately 30 people by the end of 2010.

“Our new facility in Jacksonville will serve as an important gateway for Pitney Bowes to offer Florida customers convenient, one-stop presorting of their mail to help optimize deliverability and reduce postage costs,” said Jay Oxton, president, Presort Services, Pitney Bowes. “We are thrilled to join the Jacksonville business community and look forward to working with area customers to meet their mail presorting needs.”

As the nation’s leading mail presorter, Pitney Bowes enables customers to receive significant postage discounts on First-Class™ letters and flats, and Standard Mail®. Pitney Bowes currently handles 14 billion pieces of mail per year through its 37 facilities across the United States.

via New Pitney Bowes Mail Presort Facility to Open in Jacksonville, Florida | Pitney Bowes Newsroom.

Say- maybe Bill Burrus is right- maybe the big bad mailers are getting away with murder. But here’s a suggestion- instead of eliminating those unfair discounts, let’s offer them to everyone! Why shouldn’t Aunt Minnie get the same discount as Capital One? Why not let her mail her birthday cards for 19 cents a piece or whatever? Read the rest of this entry »

Chris Lien suggests a metaphor for the contentious discussion on postal worksharing:

“Do we purchase the bicycle fully assembled and ready to ride off the show floor, or do we accept a discount on the price of the bicycle and assemble it ourselves?”

Some Assembly Optional