“How the Postal Service Moves the Nations Mail”

1. “How the Postal Service Moves the Nations Mail” NATIONAL PCC DAY SEPTEMBER 19, 2007 Tony Pajunas Vice President, Network Operations

2. Agenda • Mail Flow • Mail Processing Equipment • Transportation Networks • Technology in the Postal Service

3. Vision • Match processing capacity with workload • Reduce transportation capacity and dispatch complexity • Create a network that produces the lowest combined cost for USPS & Customers

4. Mail Induction Collection Post Office Bulk Mail Entry Unit (BMEU) • 263,000 Collection Boxes • Carrier Pick-up Window Mail • 37,000 Retail Points

5. Mail Preparation Processing & Distribution Center (P&DC) Post Office • 269 P&DCs Mail Processing Platform Operations Advance Facer Canceller System (AFCS) Letters Delivery Bar Code Sorter (DBCS) Mail Prep DBCS Input/Output Subsystem (DIOSS) Automated Flat Sorting Machine (AFSM 100) Flats Flat Sequencing System (FSS) Small Parcel / Roll (SPRS) Small Parcel & Bundle Sorter (SPBS) BMEU Packages Automated Package Processing System (APPS)

6. Letter Flow – Origin Mail Processing Processing & Distribution Center (P&DC) Mail Processing Mail Prep • Stamped Mail Advance Facer Canceller System (AFCS) Letters • Non-Barcoded Mail • Metered DBCS Input/Output Subsystem (DIOSS) • Barcoded Mail Delivery Bar Code Sorter (DBCS) • Non-Machinable Mail Manual Letter Case

7. Orientates the Mail So That a Cancellation Mark Can Be Applied Optical Character Recognition (OCR) Capabilities Image Lift Capability 1,086 Systems ~ 36,000 pcs./hr. Letter Flow - AFCS • Overnight Mail • 2/3 Day Mail • FIM Mail • Mail with Facing Identification Mark • Indicia / Mechanical Reject Mail OUTPUT

8. DIOSS (217 Machines) Image Lift & OCR Capability (ISS mode) Resolves Image & Sprays Barcode (OSS mode) Sorts on Barcode or ID Tag DBCS (9,612 Machines) @ ~ 40,000 pcs./hr DBCS  Sorts on Barcode DBCS-OSS  Resolves Image & Sprays Barcode DBCS-OSS  Sorts on Barcode or ID Tag Distribution based on volume and service to each destination Letter Flow – DIOSS / DBCS Outgoing Primary • 5 digit turnaround • Sectional Center Facilities (SCF) • Automated Area Distribution Centers (AADC) • Downflow to Outgoing Secondary OUTPUT Outgoing Secondary • Automated Area Distribution Centers (AADC)

9. Letter Flow – Address Redirection Postal Automated Redirection System (PARS) • 233 Plants & 75 Delivery Units • Undeliverable as Addressed (UAA) Redirection Processing – Forwarding of Mail • UAA Endorsement Application – Return to Sender (RTS) • Address Change Notification

10. Letter Flow – Dispatch Operations Processing & Distribution Center (P&DC) Mail Processing Dispatch Operations Platform Operations Network Surface Transportation Integrated Dispatch Surface Visibility DBCS Input/Output Subsystem (DIOSS) Delivery Bar Code Sorter (DBCS) • Robotic Container System (RCS) • Low Cost Tray Sorter (LCTS) • Automated Airline Assignment (AAA) • Semi-Automatic Scan-Where-You-Band (SWYB) • Auto Tray Sleever (ATS) • Auto Tub Lidder (AFTL) • Auto Banders • Links: • Handling Units to Containers • Containers to Trucks Direct Surface Transportation Manual Letter Case Air Transportation

11. Letter Flow – Surface Network • Local • Postal & Contractor • Overnight & 2 day Mail • First-Class, Priority Mail, Express Mail, Some Periodicals • Up to approx. 600 miles • Long-haul • Contractor • Standard Mail, Package Services, some Periodicals • Leverage Surface Transfer Centers (STC) for less than truck loads

12. Letter Flow - Air Network P&DC FedEx • Products • First-Class • Priority Mail • Express Mail • THS Sorts to Cargo Carrier • Commercial Freight House sorts to Flight Terminal Handling Supplier (THS) UPS Commercial Carrier Freight House Commercial Carriers • Continental • US Airways • American Airlines • Midwest Express • Sun Country • Jet Blue • ATA • United

13. Letter Flow – Destinating Processing Automated Area Distribution Center (AADC) • 107 AADCs Network Surface Transportation Mail Processing Platform Operations Direct Surface Transportation Integrated Receipt Delivery Bar Code Sorter (DBCS) Incoming Primary • Auto Tray Unsleever (ATU) • Auto Flat Tub Unlidder (AFTU) • Tag Blaster Air Transportation • 5 digit • SCF MAILER Dropshipment BMEU

14. Letter Flow – Destinating Processing Post Office/ Station/Branch Processing & Distribution Center Mail Processing Delivery Bar Code Sorter (DBCS) Incoming Secondary Delivery Point Sequence Local Surface • Postal • Contractor • Carrier Route • Walk Sequence

15. Letter Flow - Delivery • Types • City Carrier • Rural Carrier • Contract Delivery Service • Modes • Door • Curbline • Centralized • Vehicles • 216,000

16. Product Visibility

17. Letter Flow – Identification Code Tag • Florescent Barcode on Back of All Envelopes That Are Cancelled. • A Unique License Plate For Each Mailpiece ID TAG – On 25% of Mail Pieces Machine # Date Time Sequence Number S T A R T E N D

18. 6060 PRIMACY PKWY STE 201 Memphis TN 38188-0001 - Certified Mail IRENEPAYNE 8449 Amberview Circle Memphis TN 38141-3848 POSTNET Code Letter Flow – POSTNET BARCODES

19. Letter Flow – Next Generation BARCODE Intelligent Mail® barcode 6060 PRIMACY PKWY STE 201 MEMPHIS TN 38188-0001 IRENE PAYNE 6449 AMBERVIEW CV MEMPHIS TN 38141-8346

20. Letter Flow - Network Visibility • Pieces • Intelligent Mail Barcode • A single code that contains all data to sort, track and special services. • Containers • Intelligent Mail Container Barcode • Permanent ‘license plate’ bar codes for all mail transport equipment • New bar coded placard for mail containers encode destination and routing information • Handling Units • Intelligent Mail Tray Label • Unique 24-Digit bar code • Trailers • Permanent ‘license plate’ bar codes for all postal owned and leased trailers/cargo vans

21. Letter Flow - Surface Visibility

22. QUESTIONS