6. EXPERIMENTAL PERIODICALS CO-PALLETIZATION DROP SHIP DISCOUNTS CASE: DOCKET NO. MC2002-3
On September 26, 2002, the Postal Service filed a request with the PRC for rate incentives to move more Periodicals mail from sacks to pallets. The focus is on smaller publications (and less dense portions of other publications), which are still prepared in sacks because they lack the density needed to form pallets as an individual publication.

The proposed incentives encourage different publications to combine volumes so that there is enough volume to form “co-pallets.” The proposed discounts would be available only for drop shipped mail. Once pallets are formed, drop shipping is easier to justify, as mail to particular destinations would already be combined. Since the preparation of co-pallets is typically more onerous than the preparation of single-publication pallets, an additional rate incentive is believed to be needed to encourage mailer participation. Two discount levels are proposed, distinguished by the depth of drop shipping. The experiment is intended to test how much co-palletization and drop shipping the proposed discounts will produce.

The Postal Service communicated with a wide variety of Periodicals mail customers to develop this proposal, and it is hoped that this case can be settled and implemented within a short time frame.