USPS Rescinds Changes to DMM That Would Have Impacted Nonprofit Mailers (DMM 201.8.4)
In early 2024, the Alliance advocated for nonprofit mailers, outside the confines of a formal PRC docket, on an issue relating to the maximum size requirements for USPS Marketing Mail parcels that many nonprofits use. The Alliance’s efforts were supported by the valuable assistance and institutional knowledge of Scott Hochberg, CEO of Postage Saver Software.
By way of background, since 2012 USPS Marketing Mail parcels have been subdivided into categories: (1) Marketing Mail Marketing Parcels were typically used for small, lightweight, and thin mailable items such as flyers and catalogs, with maximum dimensions of 12 inches in length, 9 inches in height, and only 2 inches in thickness. These were available to both commercial and nonprofit mailers, with nonprofit rates being set at a discount; and (2) Marketing Mail Nonprofit Machinable Parcels and Nonprofit Irregular Parcels were utilized by nonprofit mailers for larger items, as the dimensions for both sub-products could be up to 108 inches in combined length and girth.
As part of the Postal Service price changes that became effective on July 9, 2023, the USPS revised the requirement for machinable parcels’ maximum dimensions. In the July 27, 2023, Postal Bulletin, the Postal Service “clarif[ied] that the revised requirement for maximum machinable parcel dimensions does not affect USPS Marketing Mail parcels” and that “USPS Marketing Mail parcel categories must not exceed 12 inches long, 9 inches wide, and 2 inches thick.”
Though couched as a “clarification,” this announcement effected numerous substantive changes. It applied the 12” x 9” x 2” maximum size requirement for Marketing Parcels to Nonprofit Machinable and Irregular Parcels (which had previously been subject to much larger maximum size requirements). It eliminated existing, discounted pricing for Nonprofit Machinable and Irregular Parcels as well. In practical terms, the Postal Service effectively eliminated from the market-dominant price list and the Mail Classification Schedule all Nonprofit Machinable and Irregular Parcels that are larger than 12” x 9” x 2” but are no larger than 108” in combined length and girth.
This revision uniquely impacted nonprofit mailers, and Scott Hochberg provided an illustrative example of the changes’ repercussions: a nonprofit organization using the Postal Service for merchandise fulfillment would typically purchase Marketing Mail Nonprofit Machinable Parcels to mail an item that cannot fit in a 2-inch thick box, such as a coffee mug. Under the Postal Service’s new DMM rules, that nonprofit organization would be forced to mail the same item by purchasing a competitive product such as Ground Advantage, whose corresponding rate is substantially higher.
The revised requirements technically became effective on July 27, 2023. However, the Postal Service did not publish them in the DMM until November 6, 2023, and it did not announce that it would start charging mailers who failed to conform to the new nonprofit size requirements until the January 21, 2024 price changes.
Post-USPS enforcement, the Alliance assessed the legality of the Postal Service’s actions. In a March 2024 letter to the Postal Service’s Chief Pricing Counsel , we argued that the USPS unilaterally changed the market-dominant price list, changed product descriptions in the MCS, and updated size requirements of market-dominant mail matter in violation of several Commission regulations. These types of changes could not be effectuated by the Postal Service alone (let alone buried as a “clarification” in a Postal Bulletin issue), but instead should have been done via a formal request to the PRC and as part of a notice-and-comment proceeding. The Alliance also argued that the elimination of discounted Nonprofit Machinable and Irregular Parcel pricing effectively imposed a rate increase on nonprofit mailers, in contravention of Congress’ broad mandate to treat nonprofit mail as a preferred subclass of mail entitled to preferential rates. The Alliance threatened to file a complaint with the PRC if the Postal Service did not voluntarily rescind the DMM changes.
During a March 27, 2024 conference, USPS pricing counsel told the Alliance’s counsel that it found the Alliance’s letter and arguments to be persuasive and well-presented. USPS counsel conceded that the Postal Service acted in error, and stated that USPS preferred to resolve this matter without the Alliance having to resort to litigation before the PRC.
On April 2, 2024, USPS counsel informed the Alliance’s counsel that the Postal Service intends to rescind the changes and revert the DMM standards for Nonprofit Machinable and Irregular Parcels to their original requirements pre-“clarification,” expressly noting that the 108” length-plus-girth size requirements apply. The Postal Service fixed its error in the April 18, 2024 issue of the Postal Bulletin (see pp. 36-37). It stated:
Currently, the criteria in section 201.8.4.2 provide required dimensions and characteristics for USPS Marketing Mail parcels. The criteria does not clearly address the required dimensions and characteristics each for specific types of USPS Marketing Mail parcels, including Marketing parcels (regular and nonprofit), Nonprofit machinable parcels, and Nonprofit irregular parcels. The Postal Service is revising the criteria in section 201.8.4.2 to clearly list the required dimensions and characteristics each for Marketing parcels, Nonprofit machinable parcels, and Nonprofit irregular parcels.
Although the Postal Service has characterized this as “revising the criteria in section 201.8.4.2” in the DMM, it is more accurate to say that the Postal Service was clarifying that the maximum size requirements for Nonprofit Machinable or Irregular Parcels never changed in the first place.