PRESORT OPTIMIZATION Issue #11 WORK GROUP LEADERS Joe Lubenow Marc McCrery

1. PRESORT OPTIMIZATION Issue #11 WORK GROUP LEADERS Joe Lubenow Marc McCrery Industry USPS

2. RECENT SIGNIFICANT ACCOMPLISHMENTS • Initiatives to increase pallet and decreased sack utilization • Co-packaging of automation and presorted flats within the same STD or PER package • Options to reduce letter trays • Allow certain Mixed mail on BMC pallets in order to reduce residual mail • Improved prep requirements for “fletters” • Enhanced prep for BPM flats • Formalized prep requirements for flat-sized pieces in letter trays

3. CURRENT STATUS/INITIATIVES 5-Digit Package Scheme for Flats Developed list of ZIPs that can be combined by mailers in “5-digit scheme” packages based on AFSM 100 Incoming Secondary distribution • Had extensive discussions with the industry through MTAC • Postal Bulletin notice published Dec. 26th, effective Jan. 9th. • Will reduce package handlings and costs for the Postal Service

4. CURRENT STATUS/INITIATIVES 5-Digit Package Scheme for Flats Before After 5D 54656 AFSM 100 INC SEC SORT PLAN 5D 54657 5D SCH 54656 5D 54664

5. CURRENT STATUS/INITIATIVES 5-Digit Package Scheme for Flats • Includes approximately 6000 ZIPs in 1756 combinations • Approximately 30% of packages are 5D • Only for AFSM 100 compatible Periodicals, Standard, and BPM flats • Restricted to Auto and co-packaged Auto and Presorted • Optional use, but required with 5% merging option beginning April 30, 2003 • OEL → *******************SCH 5-DIGIT 12345 • Presented through an electronic labeling list • Example benefit: 2M plus piece mailing, 7% decrease in total packages, which equates to over 12K packages

6. CURRENT STATUS/INITIATIVES 3-Digit Containers of Value Restrict the preparation of the 3-digit containers to 3-digit ZIPs for which the contents are actually distributed in 3-digit opposed to SCF operations • Worked to develop consensus within postal HQ and field operations and through MTAC • Postal Bulletin notice published Dec. 26th, effective Jan. 9th. • Will reduce containers and associated costs for the Postal Service

7. 3D 3D 3D SCF CURRENT STATUS/INITIATIVES 3-Digit Containers of Value Never Prepare SCF Wichita KS 670 670 Never Prepare 671 670, 671 672

8. CURRENT STATUS/INITIATIVES 3-Digit Containers of Value • Approximately 160 3D ZIPs w/o value • Required for Periodicals, Standard and BPM pallets beginning April 30, 2003 • Optional for Periodicals and BPM sacks • Presented in L002 using an indicator • Example benefit: 2M plus piece Periodical mailing → 2% decrease in pallets, which equates to 40 pallets

9. FUTURE GOALS • Full merging (CR/5D) of non-AFSM 100 compatible flats for dispatch to delivery units • Explore modifying the standards for “OELs” and presort stickers in preparation of advanced package sorting equipment • Increase the combining of letter mail trays from multiple mailings on pallets • Optional 5-digit prep for STD irregular parcels, but with basic rates for former 5-digit pieces • Explore palletization for First-Class Mail • Jointly pursue flats prep enhancements with Product Redesign and Engineering • Cost-based rates • Alternate flats container

10. WRAP-UP QUESTIONS??????