Contents Executive Summary. 1 1 Introduction . 5 Mandate for Report . 5 Data Quality. 5 Efficiencies and Pricing Incentives . 5 Description of Periodicals Class. 6 Issues Related to Periodicals Mail’s Shape and Characteristics . 7 2 Classification and Pricing . 11 History. 11 Periodicals Under the Postal Reorganization Act . 11 Review Team 1997–1999 . 16 Periodicals Complaint Case . 18 Docket No. R2006-1 . 19 Pricing and the Postal Accountability and Enhancement Act . 20 Mail Volume and Cost Coverage 1972–2010 . 21 Publications Database Analysis . 23 3 Operational Context. 31 Introduction. 31 Network, Facilities and Logistics . 31 Network . 31 Postal Processing Facilities (Plants) . 33 Logistics . 34 Flat-Shaped Mail Volume . 35 Packaging and Presort . 36 Flats Processing Equipment. 37 Bundle Sortation . 37 Automation Piece Sortation . 39 Manual Sortation . 42 Mail Entry . 42 Mail Entry. 42 Origin Entry . 43 Destination Entry . 43 Facility Access and Shipment Tracking . 43 September 2011 i Contents Mail Flow. 46 Mail Flow and Mailing Requirements . 48 Importance of Defining Requirements . 48 Changes in Requirements Promote Mail Efficiencies . 50 4 Service Performance Standards. 51 Introduction. 51 Background . 51 FY 2008. 52 Interim Reporting Approach . 53 5 Costs, Trends, and Data Quality. 57 Introduction. 57 Cost Revenue Analysis Methodology. 57 Data Quality Study and Methodology Changes . 61 Testing Data Quality and Ongoing Work . 62 Data for Within County Periodicals. 63 Analysis of FY 2010 Outside County Periodicals Costs. 64 FY 2010 Outside County Periodicals Attributable Costs . 64 Mail Processing. 65 Delivery Costs . 67 Periodicals Outside County Unit Cost Trends Over the Past Decade . 69 Comparison of Periodicals Flats Cost Estimates to Standard Mail Flats Cost Estimates . 71 Manual Sortation Costs . 76 Machinability Requirements . 76 Failure to Meet Critical Entry Time . 76 Hot-2C Procedures . 77 AFSM 100 Capacity . 77 Small Parcel and Bundle Sorter and Automated Parcel and Bundle Sorter Efficiency/Capacity . 78 Mail Transport Equipment Shortages . 78 Postal Regulatory Commission Comments . 78 United States Postal Service Comments . 79 6 Operations Strategies for Increasing Efficiency of Periodicals Mail. 81 Introduction. 81 Full Deployment and Development of the Flats Sequencing System . 81 Ensure Packaging.