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BTS-2004-19241 - Request for Public Comments on Reporting Requriements
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Request for Public Comments on Reporting Requirements October 8, 2004 As part of our data quality review, we have contacted FederalExpress concerning the carrier’s compliance with the Department’s mail reporting requirements. FedEx Express states that due to the structure and operation of itstransportation agreement with theUnited States Postal Service, it is nolonger in a position to comply with themail reporting requirements. BTS is seeking public comments on the meritsof the FedEx Express position and views on whether the Department’s mail reporting requirements should be retained, amended, supplemented, replaced, or removed.
By: Don Bright
December 7, 2004 Re: Response of American Airlines American Airlines, Inc. hereby responds to the request for public comments issued by the Bureau of Transportation Statistics on October 8, 2004 (69 Fed. Reg. 60472) concerning compliance by Federal Express with the mail reporting requirements of 14 CFR Part 241. American urges that the mail reporting requirements should be retained, and that the request for a waiver submitted by FedEx should be denied. In response to the questions posed by BTS, American states as follows. By: American, Mark Gilbert, 817-931-1031, mark.gilbert@aa.com
December 7, 2004 Delta Air Lines, Inc. opposes FedEx's request to be exempt from the reporting requirements of Part 241, and urges that the standard mail data elements be retained in their present form. The BTS mail data provides important marketplace data for the Department and carriers to ascertain performance and market share. The absence of a significant competitor, such as FedEx, from the BTS data would seriously undermine the usefulness of this resource. Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060
December 7, 2004 Comments of Airports Council International- North America ACI‑NA urges DOT's Bureau of Transportation Statistics to continue to require air carriers to file the mail data elements separately from the freight data elements. The separate reporting of mail and freight data is important to U.S. airport operators themselves and also to the airport planners and air service specialists with whom airports work in their efforts regarding airport site planning, facility design, surface access planning, security and market analysis. By: ACI-NA, Diane Peterson, 202-293-8500, dpeterson@aci-na.aero
December 17, 2004 Re: Comments of United Air Lines United is a strong supporter of deregulation. United firmly believes carriers should not be burdened with having to report information, whether on Form 41 or otherwise, the Department does not need to carry out its statutory responsibilities. In the present case, however, United believes Federal Express has failed to show that the mail data it has unilaterally stopped filing are not needed by DOT to meet any of its statutory responsibilities. For example, under Chapter 419 of the Transportation Code, the Department has a continuing obligation to set rates for the carriage of U.S. mail in foreign air transportation, a process in which the Department relies heavily upon mail revenue and traffic data carriers report on Form 41. Counsel: United, Julie Oettinger
January 3, 2005 Re: Federal Express Response to Comments As noted in the Federal Register Notice, the request for comments was occasioned by the meetings and correspondence between BTS and FedEx Express regarding whether FedEx Express should report data under its alliance agreement with the United States Postal Service separately from its other freight data. The alliance between FedEx Express and the USPS is a unique sole source contract structured to fulfill very specific service and quality needs of the USPS. It is completely different in operational requirements, service parameters and pricing from the collective bid mail transportation agreements that USPS has historically entered into with U.S. carriers, including FedEx Express. This distinction is ignored in the comments filed in this docket, and all of the comments are based on the faulty premise that the FedEx/USPS alliance agreement is similar in scope and purpose to these other agreements. All of the comments, therefore, miss the mark. The only apparent need for the data is for competitors to obtain confidential, competitively sensitive information on a separately negotiated seven year contract that is outside the scope of the market on which the BTS obtains data. This is not a legitimate need that the BTS should sanction. The alliance agreement was structured between FedEx and the USPS to fulfill very specific service and quality needs of the USPS. The agreement was structured to meet these needs and certainly not, as Delta implies, "to make the collection of data more difficult". Although both American and Delta and FedEx have all routinely reported this data for many years, this misses the point. The mail flows under the alliance are very different than those under the routine contracts. The problems associated under the alliance agreement with unloading the containers, analyzing, sorting and weighing each group separately is not a matter of "inconvenience"; it is a matter of whether FedEx Express and USPS can meet their objectives negotiated under this confidential agreement for certain performance standards and requirements each with associated penalties for non‑compliance. By: Sarah Prosser
January 14, 2005 Re: Supplemental Comments of Delta Air Lines There is no dispute that the FedEx services at issue involve the transportation of U.S. mail. Under Part 241, all carriers are clearly and expressly required to report certain standard data elements to BTS. Yet, FedEx has unilaterally ceased reporting this data under its USPS contract. Mail is mail. Part 241 makes no distinction as to the length of contract term, or any other characteristic, that would justify a unique rule for FedEx. Delta agrees with United that Part 241 should be uniformly applied; or, in the alternative, Part 241 should be repealed to relieve all carriers of this requirement. Many mail contracts could be said to be "unique," but that has no bearing on the BTS requirement. FedEx claims that because its contract with USPS is for a seven-year term, it lacks competitive significance to other carriers. Delta and other carriers, however, also provide competitively bid services to the USPS under long-term contracts. The volume of mail carried by FedEx has a direct negative effect on the amount of mail tendered to carriers under the CAIR contract. Contrary to FedEx's assertions, the data gathered pursuant to Part 241 is used by the Department, by carriers, and by airports for a variety of planning purposes. The absence of FedEx' s substantial mail transportation activities under its USPS contract would seriously undermine the completeness and usefulness of the data set. Mail transported by FedEx is not so "completely different" from mail transported by every other carrier as to justify a lone exemption to the rule. Either Part 241 should apply to all carriers, or to none. Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8060, sascha.vanderbellen@shawpittman.com
January 14, 2005 Re: Comments of Southwest Airlines FedEx transports over half of all domestic U.S. mail for the USPS, and an accurate picture of this market is simply not possible without detailed information on FedEx's mail transport activities. As noted earlier, passenger carriers are not prohibited from transporting mail weighing 16 ounces or more if adequate screening measures are in place. Not surprisingly, passenger carriers are actively working with the Transportation Security Administration to develop screening techniques that will allow them to transport some of this heavier mail beyond the volume that is currently under contract with FedEx. Yet without information from FedEx, passenger carriers cannot determine the true size of the market, where mail volumes are growing and declining, and what price per pound to bid on potential new business. This lack of information inhibits airline investment in mail transportation and stifles competition in the marketplace, especially considering that the volume of mail weighing 16 ounces or more has been steadily increasing over the last few years. This comes at a high cost to consumers, who will inevitably pay more for domestic mail transportation as a result of diminished competition. Importantly, passenger carriers are the "low cost" mail transportation alternative for the Postal Service. While the exact rates that FedEx charges the Postal Service can only be estimated, Southwest conservatively believes that it could provide comparable service and performance at a substantially lower price. Counsel: Leslie Carr, 202-263-6285, leslie.carr@wnco.com
January 25, 2005 Re: Comments of Federal Express Southwest argues that it needs complete information on the postal market in order to determine "what price per pound to bid on new business." This hardly seems like a legitimate reason for the government to collect data and cannot serve the purpose advocated by Southwest of providing "valuable competition" in the market. Delta asserts that "either Part 241 should apply to all carriers or to none." FedEx has no problem at all with BTS relieving all carriers of the obligation to report mail data. The only two uses of the data identified from the comments so far are one, those related to the private commercial interests of the carriers, which should not be a legitimate justification for the government collection of data, and two, the airport planning process when postal shipments are handled differently from freight movements. As we stated in prior comments, the latter does not apply to the movement of mail through the FedEx system under its alliance agreement with USPS. If this is also the case with mail shipments carried by the other carriers, FedEx takes the position that they should also be relieved of the need to report the mail data. By: Sarah Prosser
February 8, 2005 Re: Comments of The United States Postal Service This is in response to the October 8, 2004 Bureau of Transportation Statistics (BTS) request for public comment concerning FedEx's request to be exempted from the mail volume reporting requirements contained in 14 CFR 241. Specifically, FedEx is objecting to the requirement that it segregate cargo it carries under its mail transportation contract with the Postal Service into mail and freight as opposed to its current practice of characterizing all cargo, to include mail, as freight. If the provisions of FedEx data to BTS would, in fact, allow FedEx's competitors to determine FedEx's pricing arrangements with the Postal Service, the Postal Service's negotiating position with respect to any future negotiations for mail transportation by air could be adversely impacted. Accordingly, in an effort to avoid any such adverse impact, the Postal Service supports FedEx's request that it be exempted from the mail volume reporting requirements at 14 CFR 241. By: Paul Vogel
January 25, 2005 Re: TrafficWorld's Request for Access to Letters from FedEx This letter is in response to your January 25, 2005 Freedom of Information Act request submitted to the Bureau of Transportation Statistics. In your FOIA request, you asked for: "copies of the letter FedEx sent to Bureau of Transportation Statistics on April 23, 2004." Please be aware that FedEx has claimed that the letter reveals "operational details" and therefore should be considered "confidential business information" under 49 CFR Part 7. I have reviewed the letter and I am enclosing a redacted version. By: Angela Greiling Keane
February 14, 2005 Re: Delta's Response to a Letter Submitted by the United States Postal Office The position taken by the USPS is curious to say the least. USPS apparently does not want Delta or other competitors for mail business to be able to "determine FedEx's pricing arrangements under its contract with the Postal Service USPS alleges that access to this competitive market data could adversely affect "future negotiations for mail transportation." It is difficult to see how USPS could possibly be "harmed" by allowing other mail carrying competitors access to data and information that might enable them to "undercut FedEx's pricing." If Delta is willing to provide mail service at cheaper rates than FedEx, how is this detrimental to the USPS? Shielding the FedEx‑USPS arrangement from the uniform mail reporting requirements of Part 241 creates a lack of transparency that is antithetical to government contracts policy, as well as the Department's own policies regarding the disclosure of competitive data Counsel: Shaw Pittman, Alexander Van der Bellen, 202-663-8382, sascha.vanderbellen@shawpittman.com
February 18, 2005 Re: United Air Lines' Response to a Letter Submitted by the United States Postal Office The USPS letter appears to respond to a letter Federal Express sent the BTS nearly ten months ago in April 2004. In that letter, Federal Express, in an effort to persuade the BTS that it should not be required to file domestic mail data in its Form 41 reports, claimed, among other things, that the public release of detailed information relating to its sole source contract with the USPS for the carriage of domestic mail would enable competitors to undercut its pricing in future negotiations with the USPS. This letter only recently became available in the docket when it was made public in response to a Freedom of Information Act request. Interestingly, in the public pleadings it filed in this docket, Federal Express has never claimed that reporting the volume of domestic mail it transports under its contract with USPS could undercut its competitive position in future USPS procurements. This may be because the claim is spurious: The limited mail data Federal Express is required by law to file with DOT pursuant to Part 241 would hardly enable competitors to "gain access to the research [Federal Express] did in creating, developing, determining and negotiating the pricing. under ... [the] agreement" or to determine the price the USPS is paying Federal Express, as Federal Express claimed in its previously non-public April 2004 letter. Curiously, while Federal Express was attempting to justify its failure to file required mail data with BTS on the ground that such data would enable competitors to undercut its pricing in future USPS procurements, the USPS argues in its February 8 letter that if the data Federal Express has refused to file with DOT would disclose its pricing arrangements with USPS, such disclosure could adversely impact the USPS's position in future rate negotiations with third parties. Thus, Federal Express wants to he relieved of the burden of filing domestic mail data with DOT because it fears such filing will lead to lower prices under future contracts with the USPS, while USPS favors granting Federal Express an exemption because it fears disclosure of the data would lead to higher prices. Counsel: United, Julie Oettinger
February 23, 2005 Re: Response of Federal Express to Comments of Delta Air Lines and United Air Lines As United points out in its comments, the first issue that BTS should focus on in this docket is whether this information is needed at all. As United states: "No carrier should be burdened with an obligation to report information to the Department, whether on Form 41 or otherwise, that the Department does not need to carry out its statutory responsibilities. If DOT does not need the mail data, then no carrier should be required to file the data and the BTS should grant all carriers (not just Federal Express) an exemption from Part 241, relieving them of the filing obligation." Delta states that "[e]ither Part 241 should apply to all carriers transporting U.S. mail, or to none." Although FedEx continues to maintain its position that the DOT's reporting requirements do not govern the USPS alliance and therefore no waiver is necessary, we also continue to take the position that we know of no reason that any carrier should be required to submit this data. In its Federal Register notice, BTS stated that it "will consider a future rulemaking to amend, supplement, replace or remove the relevant regulations." Given the stated willingness of at least 3 carriers to forego this data and the harm cited by both FedEx Express and the USPS, FedEx Express urges BTS to issue a Notice of Proposed Rulemaking that will remove this superfluous requirement. Counsel: Federal Express, Sarah Prosser, 901-434-8579
March 8, 2005 Re: Response of Southwest Airlines to Letter Submitted by Federal Express In its most recent letter, FedEx again argues that it should not be required to report standard Part 241 data on mail that it transports for USPS. To be clear, the information that FedEx is refusing to report is the same information that every other air carrier transporting U.S. mail is required to provide to the Department of Transportation. No additional or unique burden would be placed on FedEx. Ironically, FedEx's primary argument actually supports the release of its Part 241 data. In a tortured effort to justify its noncompliance with Part 241, FedEx asserts that the public release of this information would facilitate price competition between air carriers and lower prices for USPS: "The harm cited by both USPS and FedEx Express is the harm that parties on either side of a transaction can suffer whenever one bidder knows another's bid. Having the ability to slightly undercut a competitor's price harms the competitor that loses the bid and harms the contractor which could possibly have gotten a lower price." This statement may well be true insofar as competitive bidding would "harm" FedEx by constraining the prices it could offer for its services. However, it is certainly not true that price competition will harm the contractor, in this case USPS (and U.S. taxpayers), by providing them with lower prices. Counsel: Leslie Carr, 202-263-6285, leslie.carr@wnco.com
November 6, 2006 After evaluating the public comments, the Research and Innovative Technology Administration's Bureau of Transportation Statistics has determined that Federal Express Corporation should not be granted a waiver to combine its freight and mail statistics for Form 41 reporting. Separate mail and freight statistics are required for international mail rate-making, airport planning and investment, air carrier planning and investment, and maintaining uniformity within the airline industry. FedEx must report its freight and mail separately beginning with August 2006 data. By: Office of Airline Information, Donald Bright
BTS-2004-19241 - Request for Public Comments on Mail Reporting Requirements November 16, 2006 Request of Federal Express for an Extension of Time FedEx Express hereby requests an extension of time, until November 22, 2006, in the above-captioned matter to file a petition for review pursuant to 14 C.F.R. Part 385. Under 14 C.F.R. section 385.31(a), the petition for review would otherwise be due today, November 16, 2006. FedEx Express' request for an extension of time is justified by good cause. Although the decision in this matter is dated November 6, 2006, FedEx Express did not receive its copy until November 14, 2006, over one week from the date of issuance and only two days before the date that the petition is otherwise due. Given the complexity and number of issues involved in this matter, FedEx Express requires sufficient time to address each one appropriately. In view of the urgency of this request, FedEx Express requests that the Department rule on this matter immediately. Counsel: FedEx, Mark Hansen, 901-434-8583, jmhansen@fedex.com
December 1, 2006 Delta hereby opposes the Petition of Federal Express Corporation for Review of a decision by the Staff of the Bureau of Transportation Statistics denying FedEx's waiver request with respect to certain freight and mail statistics as part of FedEx's Form 41 reporting. FedEx has failed to provide any new arguments or identified any errors warranting the Director's reconsideration, much less reversal, of the BTS Staffs waiver denial. Counsel: Hogan & Hartson, Robert Cohn, 202-637-4999
December 4, 2006 United shares FX's strong support of deregulation. It also shares FX's support for Under Secretary Shane's admonition that the Department should implement rules only if they "add value." For that reason, United has stressed throughout this proceeding that the real issue here is not whether it would be a burden for FX to report the data at issue -- it is a burden on all carriers to report the various data required by Part 241 -- but whether the data are needed by the Department. No carrier should be burdened with an obligation to report information to the Department, whether on Form 41 or otherwise, that the Department does not need to carry out its statutory responsibilities. If DOT does not need the mail data at issue here, then no carrier should be required to report the data, and OAI should grant all carriers (not just FX) an exemption from Part 241 relieving them of the filing obligation. On the other hand, if the Department continues to need such data to carry out one or more of its statutory responsibilities -- and the Assistant Director's decision denying FX a waiver concludes that it does -- then there is no public interest justification for granting FX (or any other carrier) an exemption, regardless of the administrative burden that is imposed in reporting the mail data required by Part 241. So long as the Department concludes that it has an ongoing regulatory need for the domestic mail data FX has stopped reporting, FX's petition should be denied. On the other hand, if the Department no longer has a need for the data, as FX maintains, then all carriers, not just FX, should be relieved of the obligation to report the data. Counsel: Wilmer Cutler, Bruce Rabinovitz, 202-663-6960, bruce.rabinovitz@wilmerhale.com
March 16, 2007 Motion for Leave to File and Consolidated Comments of Federal Express - Bookmarked Our position throughout these proceedings has been that shipments we carry for the United States Postal Service under our alliance agreement are properly reported as freight, just as we have been doing. FedEx Express does not handle the USPS shipments as mail. Instead, we handle USPS shipments under the alliance agreement just as we handle any non-USPS shipment. We do not use mail tender facilities at airports and we have no special mail-related handling requirements at airports. The alliance is a natural outgrowth of the macroeconomic changes taking place within the cargo transportation industry. The purpose of the alliance is to streamline the handling of mail, eliminate unnecessary handling rules and costs, and to transport it and any other USPS shipments on the same basis as our own express and freight products. The alliance creates for USPS the same kinds of efficiencies that have benefited other shippers over the past few decades. These efficiencies are good for USPS, good for taxpayers, and - most importantly - for USPS customers. To date, no one - not the Bureau of Transportation Statistics staff nor the parties to this case - has pointed to any rule that requires us to assume the burden of attempting to distinguish between USPS shipments that are wholly mail, partly freight and partly mail, or all freight. They certainly have not pointed to any rule that requires us to make arbitrary allocations of the revenues we earn under the alliance agreement to reflect the proportion earned in carrying priority mail and that earned by carrying nonpriority mail. Moreover, no one has pointed to any need for the data - certainly no need that would justify putting FedEx Express and USPS to the expense and burden of creating a system that would enable us to meet the staff's demands. The only comment that even suggested a potentially legitimate need for the data was by Airports Council International-North America. Its members include some of our most important airport partners, and we would not lightly deprive them of data necessary for planning future capacity. However, ACT-NA made only an unsupported assertion of need. Its comments do not explain why an airport needs to see how the traffic FedEx Express carries under the alliance breaks down between freight and mail. Airport planning certainly does not require FedEx Express to segregate alliance revenues into priority and nonprionty mail transport. Against this background, should the Director disagree with us and find that the rules apply, it should waive those rules to the extent necessary to allow U.S. mail customers to continue to benefit from the efficiencies gained under the USPS/FedEx Express alliance. Counsel: FedEx, Mark Hansen, 901-434-8583, jmhansen@fedex.com
March 21, 2007 Ex-Parte Letters to: By: Roberta Gabel |
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