Implementing Intelligent MAIL in the U S Postal

Implementing Intelligent MAIL® in the U. S. Postal Service Charles Bravo Senior Vice President Intelligent Mail & Address Quality National Postal Policy Council May 25, 2006 1

What is INTELLIGENT MAIL? The use of one code to uniquely identify and allow end-to-end visibility into the mail stream. n Evolution in postal technology n Helps business customers better manage their resources and reduce costs n Provides real-time access to processing and delivery information 2

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IN THE MOST SIMPLE TERMS 4

WHY CHANGE? THE BENEFITS § Simplifies use of postal services § Frees up real estate on mail piece § Supports accurate collection of postage § Improved management of mailers’ business processes § Increased transparency (mail visibility) § Enhanced security while maintaining privacy § GROW REVENUE! 5

INTELLIGENT MAIL COMPONENTS Induction Transport Electronic Manifest or Pre-Shipment Notification Entry Scan “Starts the Clock” Containe r Scans Planned Induction Date/Time Actual Induction Date/Time Status of Mail Process Delivery Value Information Operations Mail Preparation First Automate d Scan Last Automate d Scan Delivery Scan Mailpiece s in Sorting Mail Availabl e for Delivery Actual Receipt 6

One. Code Vision™ Yesterday’s Mail Piece Address Change Service Codes Special Services Presorted First-Class Mail U. S. POSTAGE PAID Washington, DC 20260 Permit No. 1 6060 PRIMACY PKWY STE 201 MEMPHIS TN 38188 -3333 ADDRESS SERVICE REQUESTED #BWNGKVN #9999 9920 0104 276 IRENE PAYNE 6449 AMBERVIEW CV MEMPHIS TN 38141 -8346 PLANET Code for CONFIRM Service POSTNET Code for Sortation 7

One. Code Vision™ A New Mailpiece for Today Visibility & Special Services Address Quality Services First-Class Mail Postage & Fees Paid USPS Permit No. G-10 COMPUTERIZED FORWARDING SYSTEM UNITED STATES POSTAL SERVIICE 6511 BALTIMORE AVE HYATTSVILLE MD 20782 -9988 CHARLES E. BRAVO SR VP INTELLIGENT MAIL & ADDRESS QUALITY UNITED STATES POSTAL SERVICE 475 LENFANT PLZ SW RM 2100 WASHINGTON DC 20260 -5500 CONFIRM Service Sortation “One code per mail type that points to a suite of services” 8

OVERVIEW/BACKGROUND n Uses 4 -state barcode symbology – Refers to 4 different positions of the bars within the barcode n The code will: – – n Uniquely identify the sender Uniquely identify the mailpiece Provide a destination ZIP Code for sortation & routing Encode Special Service indicators & Address Change Service (ACS) requests Barcode will be acceptable for automation discounts 9

TESTING TO ENSURE SUCCESS All Testing is Going Well • Computer simulation – SUNY, LM & Omniplaner • Encoder testing – 22 mailers • Test deck – stress deck on specifications • Move Validation Mail (MVL) • Over 10 million mail pieces • Read rate comparable to POSTNET • Prudential Mail and American Express • Tested over 1 million mail pieces • Shorter height testing revealed no degradation for letters • Letter height specification updated to between. 134 and. 230 • Flats stress deck testing underway 10

One. Code CONFIRM vs. CONFIRM Barcode Symbology 4 -State PLANET Codes Unique Numbers 1 Billion 1 Million Can Combine Services Yes No Cost Same as CONFIRM Current CONFIRM pricing Available for all letter mail Sept. 2006 11

DEVELOP ENABLING INFRASTRUCTURE Customer Data Centers Firewall USPS National Data Stores USPS Wide Area Network 9 Areas 80 Districts 280 Plants 38, 000 Facilities 300, 000 IMD Scanners National Application Servers Enterprise Data Warehouse USPS Mail Processing Infrastructure District Servers USPS Associate Office Infrastructure IMD 12

INTELLIGENT MAIL DEVICES n Imager for barcodes – Reads 4 -state, POSTNET, and PLANET barcodes n Full alpha-numeric keypad – Captures image of signature n Larger display – Color display – 2” x 3” dimension n Wireless capable – Bluetooth enabled – WLAN (802. 11 b) and WWAN (GPRS) expansion capability 13

ENCHANCE ADDRESS QUALITY Mailers expect the Postal Service to deliver their mail to the right destination and the right person the first time. Supporting Facts: Approximately 45 million change of addresses are filed each year Each year approximately 2 million addresses are added to the system. In 2005, the Postal Service processed 212 billion mail pieces. 14

USPS FOCUS Overall improvement in Address Quality: n Reducing UAA n Increasing DPS percentage 15

MOVE-RELATED UAA New York New Jersey Pennsylvania 16

PHYSICAL ADDRESS UAA Common Address Quality Problems ACME PRODUCTS 4759 WESTERN ST NEW YORK NY 10022 -5279 CARL BROWN CARL SHULER PO BOX 1414 LAKE ST APT 3 A 1914 LARK ST APT 3 A LAKE ST CHICAGO IL 60614 -1910 CHICAGO IL 60614 -1905 CHICAGO IL 60614 -1910 Missing Apt or Ste Number Incorrect Recipient Missing Number Missing RR or Box Number Incorrect Street Name 17

ENHANCE ADDRESS QUALITY Services to keep up with movers: Existing: – NCOA Link™ – The most secure method to keep customer address information current. – Over 270 Licensees New: – One. Code ACS – Provides mailers with electronic address correction services without need of costly manual processing. 18

One. Code ACS is available for First Class letter mail Sept. 1, 2006 ABC Company 123 Main St Memphis TN 38101 - 1234 Address Service Requested INTELLIGENT MAIL & ADDRESS QUALITY USPS Forward 6060 PRIMACY PKWY STE 201 INTELLIGENT MEMPHIS TN 38188 - 0001 One. Code. MAIL & ADDRESS QUALITY 2020 PKWY MEMPHIS TN 38188 - • MVL testing for over a year • Testing with multiple mailers • PARS will allow standard mail to be offered late in 2007 19

One. Code ACS vs. ACS Barcode Symbology 4 -State None Percent Electronic High 90’s 80 -85% plus hardcopy Can Combine Services Yes No Response Time Hours Days Cost 21¢ per record 21¢ per electronic record/75¢ per hard copy 20

ENHANCE ADDRESS QUALITY Services to improve address quality: Just Launched: – Address Element Correction II (AEC II) – Allows mailers to submit bad addresses to USPS for correction. – Uses Delivery Force Knowledge™ – ANKLink – Provides mailers with information on addresses not known after the forwarding period concludes. – Over 20 Licenses have been issued. 21

ENHANCE ADDRESS QUALITY Quality address information from movers: – Internet Change of Address – see www. usps. com – Telephone Change of Address – call 1 -800 ASK - USPS – Movers Guide™ – Visit your Post Office 22

INTERNET CHANGE OF ADDRESS 23

INTERNET CHANGE OF ADDRESS 11. 9 Million ICOA’s Processed Electronically January 2002 – April 2006 24

ICOA PUBLICITY Last year, this story was featured in over 484 newspapers across the country reaching 39 million readers. 25

THE LATEST MOVING INNOVATION Catalogers lose contact with customers during the move n Consumers hyper-spend immediately following their move n Catalogers miss the hyper-spending window n Movers are interested in trying new catalogs n Catalog Request Card 26

INCREASING DPS PERCENTAGE n Increasing the use of ICOA n Promoting more DPV by mailers n Encouraging mailers to use AEC I and II n Using internal tools n Launching Suite. Link ™ 27

WHAT YOU CAN DO? n Learn more about the 4 -State Barcode – Rapid Information Bulletin Board System (RIBBS) web site (https: //ribbs. usps. gov/onecodesolution/) n Encourage your customers to use ICOA at usps. com n Learn more about our Address Quality tools – NCOA Link™, One. Code ACS, ANKLink, AEC II n Obtain a copy of the “Address Quality Methodologies. Best Practices. ” It can be downloaded at: – https: //ribbs. usps. gov/mtac. htm 28

THE BIG PICTURE MTE License Plate Identity: Unique ID across assets, containing or linked to customer IDs Truck/Trailers Pallet / MTE Placard 24 -Digit Distribution Labels Airplanes Unique Mailpiece ID (4 -State, UCC EAN 128) D&R Tag Scans 29