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Shaping a More Efficient Future Price Change Proposal

Shaping a More Efficient Future Price Change Proposal. Mailers’ Technical Advisory Committee. Stephen M. Kearney Vice President Pricing & Classification May 17, 2006. High-Level Goals. Growth Efficiency Cost coverage Addressing Positioning for the future. High-Level Initiatives.

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Shaping a More Efficient Future Price Change Proposal

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  1. Shaping a More Efficient Future Price Change Proposal Mailers’ Technical Advisory Committee Stephen M. Kearney Vice President Pricing & Classification May 17, 2006

  2. High-Level Goals Growth Efficiency Cost coverage Addressing Positioning for the future

  3. High-Level Initiatives • Shape-based pricing • Less emphasis on weight • Incentives • Containers • Drop shipping • Sorting • Packaging • More choices • Forever Stamp • Low-cost Address Change Service

  4. Agenda • Review full product line • Strategy • Significant changes • Specific examples • Timeline to 2007 • Questions

  5. First-Class Mail Strategy • Shape-based pricing schedules • Letters • Flats • Parcels • De-emphasize weight

  6. First-Class Mail Significant Changes • Forever Stamp • Single-piece 39¢►42¢ • Postcards 24¢ ►27¢ • Additional ounce 24¢ ►20¢ • Letters over 1 ounce go down • Flats over 6 ounces go down • Similar pattern for workshare • New Business Parcel category

  7. First-Class Mail Examples Letters Parcels Flats

  8. First-Class Mail Examples + 41¢ + 3¢ + 19¢ - 1¢

  9. Priority Mail Strategy • Cover costs • Especially large lightweight items • De-emphasize weight for heavier items • Continue to improve convenience

  10. Priority Mail Significant Changes Dimensional weight pricing for Zones 5-8 Lower prices for heavier items Permanent Flat Rate Box

  11. Priority Mail Examples

  12. Priority Mail Examples + $8.50 + $4.60

  13. Express Mail Strategy Low-cost alternative for shipping documents Significant Change New 1-pound price

  14. Express Mail Examples

  15. Standard Mail Strategy • Align pricing with operations • Encourage growth of efficient, effective mail • Expand shape-based pricing

  16. Standard Mail Significant Changes Increase drop ship incentives Add more presort options Create distinct prices for parcels Add “Not Flat-Machinable” category Discontinue destination delivery unit rate for letters Differentiate prices for detached address labels

  17. Standard Mail Examples

  18. Standard Mail Examples +47.7¢ +27.7¢ +8.6¢ - 4.2¢ +18.7¢ +1.6¢

  19. Periodicals Strategy • Encourage efficiency • Containers • Drop ship • Simplify co-palletization rules

  20. Periodicals Significant Changes • New 85¢ container charge • Enhanced drop ship incentives • Particularly for high-editorial content

  21. Periodicals Examples

  22. Periodicals Examples + 4.7¢ + 2.7¢ - 2.2¢

  23. Package Services Strategy More efficiency Streamline product offering

  24. Package Services Significant Changes Discontinue retail Bound Printed Matter Lower increase for DDU and DSCF entry Require barcodes on all Parcel Select items

  25. Package Services Examples

  26. Special Services Strategy Improve address quality Modernize services Significant Changes New low-cost One Code Address Change Service for letters Redesign Insurance Reduce electronic Return Receipt fee

  27. Special Services Examples

  28. Special Services Examples

  29. Special Services Examples

  30. Timeline 2006 2007 May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 10 Months 1 Year Filing Date (May 3, 2006) PRC Recommendation (Early March) Litigation (May through March 2007) Governors Decision (March/April) Implementation (May/June)

  31. Thank You Questions?

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