Postal proposal makes room for 'business class.'

Folio: The Magazine for Magazine Management, May 1, 1991 by Paul Miller

BALHARBOUR, FLA. -Following a rate case that turned out differently than planned, the United States Postal Service (USPS) has decided to do some soul-searching. it is working on what could be a major realignment of mail classifications, wherein first and third class would be redefined in subclasses of a new "business class."

In an unrelated development, the USPS Board of Governors has approved the hiring of a consulting firm to study the USPS since the 1971 Postal Reorganization Act, with the objective of suggesting changes in the rate making process.

The reclassification project--headed by Charles McBride, director of USPS strategic services integration-is being drawn up for a series of rate filings with the Postal Rate Commission beginning later this year.

The proposed categories are designed primarily with three types of mailers in mind: firms that mail bills, which must go out first class; direct mailers that are willing to pay a little more for better service; and parcel shippers looking for a simpler system that would do away with the one-pound limit between the existing third and fourth classes.

Among the changes being proposed by McBride's group are the following:

* The creation of "Class A Preferred Service." Included in it would be subclass Al, which is similar to the current first class rate category for single piece, pre-sort and prebarcoding. Another subclass, A2, would apply to expanded automation and bulk entry requirements.

* The creation of "Class B Standard Service." Within this category would be a subclass B1 that is similar to current bulk third and bulk fourth classes, and rate categories for presort, prebarcoding, shape and drop-shipping. A subclass B2 is similar to the current single piece third and fourth classes,

* The creation of a "Bulk Third Small Parcel Service" class. In addition to its "Business Class" filing, the USPS will file another special rate case with the PRC this August for the creation of a "Bulk Third Small Parcel Service" class. This category would extend the third class weight limit, accept packages that are prebarcoded, and offer favorable bulk entry costs designed to allow more competitive rates than are currently available in Parcel Post.

Calling the current rate-making system and the 10-month-long postal rate cases "cumbersome," USPS Governor Ira Hall says he is eager to see an outside consultant review the Postal Reorganization Act.

We're just saying to the consultant, Here's a blank piece of paper, this is the Postal Reorganization Act, and these are our objectives. What can you recommend?' "

At press time, the Postal Service was taking bids primarily from nonprofit firms and universities that currently have no postal-related projects on their plates.

Mailers have criticized the Postal Service in the past for conducting blatantly biased studies on other matters, such as deliverability. "This one is going to be an absolutely objective study-that, I guarantee," says David Harris, executive secretary to the USPS Board of Governors. "That's why we're only taking bids from outside firms. Otherwise, it would look like we dictated the results. "