February 23, 2004

Dear BSA Member:
On Friday, January 23rd, Bill MacFarlane of MacFarlane Pheasant Farms (Wisconsin); Janet Crouch, Ideal Poultry (Texas); myself, McMurray Hatcheries (Iowa); and BSA consultant, Stephen S. Boynton; met with Mark Reisinger, Legislative Assistant to Senator Grassley (R-Iowa); Erica Pagel, Legislative Assistant to Senator Finegold (D-WI); Paul E. Vogel, Vice President, Network Operations, United States Postal Service (USPS); John Bonafilia, Manager, Commercial Operation, USPS; and Shelia T. Meyers, Manager, Government Relations USPS; to discuss the surcharge to be imposed by Northwest Airlines for the air mail shipment of poultry and other issues.
First of all, the meeting was very cordial, informative and productive and will be very useful for future contacts with the USPS on issues important to the industry. I believe we all felt that the USPS is interested in solving problems and not just “stone walling” problems. The obvious bipartisan interest of Members of Congress was certainly not lost on the representatives of the USPS – especially actually meeting in Senator Grassley’s office. The results of the meeting were as follows:
1. Surcharge – As you will recall, the reason stated by Northwest Airlines (NW) for its decision not to continue carry domestic mail is that under a new contract system of biding mail contracts, as opposed to the previous procedure of negotiating contracts, NW’s share went from 12% of the market to 2%. Although NW does continue to carry international mail, it made the business decision not to continue to carry domestic mail. Responding to BSA concerns, the USPS entered into discussions with NW to obtain a special concession to carry “lives” by mail; at the Minneapolis-St. Paul hub. After considerable discussions, NW proposed a “non-negotiable” $1.00 surcharge in addition to the postage for such service. Initially, it was suggested by the USPS that the other airlines would be afforded the opportunity to a similar surcharge.
After our discussions, it was determined that no additional surcharge would be permitted to be charged by other air carriers. The $1.00 surcharge would only be charged to customers using Northwest Airline flights originating in Minneapolis-St.Paul. (If you use any other airline you will not be charged the $1.00 surcharge and if you take your birds to Minneapolis/St. Paul AMF, and they fly by Northwest, you will be charged the $1.00/pound.)
Northwest Airline will only handle birds at the Minneapolis/St. Paul AMF facility. If you do not go to Minneapolis/St Paul to ship your birds you must use airlines other than Northwest to carry your birds. If you have questions regarding this, please contact your transportation specialist at the AMF you ship from. THIS GOES INTO EFFECT SATURDAY, FEBRUARY 28TH.
In subsequent discussions with Mr. Reisinger and Ms. Pagel, Congressional efforts will be explored to “equalize” the difference between the surcharge of NW (of $1.00) and the surcharge of other airlines (of $.20) by some sort of tax credit scheme where no additional cost would result to shippers. We will follow through with this effort.
2. Bid Contract-Negotiated Contracts
Unfortunately, because of the considerable savings to the users and the USPS under the bid contact system, the previous negotiated contract procedure will not be used again. Consequently, NW will probably not ever carry domestic mail again.
3. Temperature Issue
One of the continuing problems is that most air carriers impose an 85 degree F cut off where they will not ship “lives” if the temperature reaches that level on the tarmac. This standard is found in the regulations under the Animal Welfare Act (AWA) and has no application to day-old chicks (even though the AWA standard calls for such temperature levels for four hours). BSA has obtained a letter from the U.S. Department of Agriculture that supports the position that such a standard is unnecessary for avian. However, the USPS says it does not have the authority to force the air lines to abide by any particular rule on temperature in the shipments of “lives.” We (legally) disagreed with this position as to their authority.
As a compromise, we are to supply the USPS with documentation over an above what we have already supplied and they have agreed to send it to all air lines as an “unofficial- official” guideline of the USPS in shipping birds.
4. Federal Express
As you recall, Federal Express has taken the legal position that it is not covered by the amendment we obtained that states that all air carriers of mail must take poultry as air mail if it does not regularly and commonly refuse to carry live animals as cargo. Federal Express states that it does not commonly or regularly ship “lives.” In fact, Federal Express does take such shipments for the pet industry, zoos and aquariums, medical research and, we are informed in some cases, birds. The USPS would like Federal Express to take shipments of poultry.
The USPS says that if we can document that fact that such shipments are taken by Federal Express, they will confront Federal Express the position that it is covered by the amendment. This position will be the same issue with UPS in possible forthcoming negotiations with the USPS and USPS will bring up the issue of coverage.
5. Transfer of Shipments
The USPS is required to take shipments of day-old chicks even though there may be a transfer of the shipment along the route to another airplane of the original shipment airline or even if it is transferred to air carrier. [If any postal employee informs a shipper differently, the USPS will call that individual and explain the procedure].
In sum, I believe we all were encouraged by the response of USPS. We have some “homework” to do and will keep you informed. Any suggestions or comments are welcomed.
Sincerely,
Murray McMurray
Chairman

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