Manager, Small Business Development & Mail Acceptance Dallas PCC January 2017 Price Change Felicia Carter Manager, Small Business Development & Mail Acceptance

January Release Overview 41 Market Dominant & Competitive Structural, Price & Classification Changes Impacting 5 Postage Statements: 3600, 3602, 3605, 3541, 3700 Implementation Dates PostalOne!: January 8, 2017 Price Change: January 22, 2017

Agenda At-A-Glance Changes Affecting Multiple Classes Flats Sequencing System (FSS) Automated Area Distribution Center Single price for letters weighing up to 3.5oz First-Class Mail Price Change Alternate Postage renamed to Share Mail Commercial Letters Standard Mail Renamed to USPS Marketing Mail Standard Mail Flats Standard Mail Parcels Other Price Changes Periodicals and Package Services Extra Services Informed Delivery Promotions & Incentives Permit Fee Changes Shipping Products Permit Full Service Fee Waiver Changes

January Release “At-A-Glance” LOWER Single-Piece Metered Mail Some First-Class Mail Rename Standard Mail to USPS Marketing Mail Eliminate Flats Sequencing System (FSS) pricing MAJOR CHANGES HIGHER Some Standard Mail Letters, Flats & Parcels Package Services Some Special Services $0.49 First-Class Mail Forever Stamp

Flats Sequencing System Eliminate FSS Pricing Eliminate FSS pricing for the following mail classes: Standard Mail Periodicals Bound Printed Matter Eliminate all FSS specific pricing rates for: DFSS entry FSS Scheme Pallet/Container FSS Other Pallet/Container Mailers will pay appropriate presort category prices FSS mail preparation requirements will remain the same

Flats Sequencing System Create and incentivize more Carrier Route (CRRT) pallets in Non-FSS Zones Before Merged 5-Digit Scheme Pallets 5-Digit Scheme CRRT Pallets After 5-Digit Scheme CRRT Pallets Merged 5-Digit Scheme Pallets Before Merged 5-Digit Pallets 5-Digit CRRT Pallets After 5-Digit CRRT Pallets Merged 5-Digit Pallets

Automated Area Distribution Center Combine 3-Digit & AADC Commercial Letters AADC (L801) 3-Digit (L003) AADC (L801) Applies to: First-Class Mail Automation Letters and Postcards Standard Mail Automation Letters Drop Ship product file and Mail Direction files will be made available at the FAST application under the Resources link c

First-Class & Standard Mail Letters Increase max weight from 3.3oz to 3.5oz Increase First Class Machinable Presorted Letters max weight from “3.3 oz. or less” to “3.5 oz. or less” Increase Standard Mail Letters max weight from “3.3 oz. or less” to “3.5 oz. or less”

First-Class Mail Price Changes First-Class Mail One Ounce Letter Product Price Current New Single Piece First-Class Stamp $0.47 $0.49 Metered Mail $0.465 $0.46 Automation Presort Mixed AADC $0.419 $0.423 AADC $0.399 $0.403 5-Digit $0.376 $0.373 * AADC to 5-digit discount expanded from $02.3 to $0.03 is now an 84% pass through

Rename Alternate Postage to Share Mail Easy and convenient way to share promotions from businesses through the mail without affixing a stamp Postage is paid using IMb scans Follow Single-Piece First-Class Mail standards for processing, handling and delivery

Alternate Postage Simplify price structure Customers will pay one price for letters and one price for postcards: Letters: $0.57 Postcards: $0.42 Eliminate the option to use Picture Permit Imprint for this service Participation requires registration through the Business Customer Gateway (BCG)

Alternate Postage Identifying markers: Facing Identification Mark E (FIM E) Intelligent Mail barcode® (IMb) Indicia with the following text: First-Class Mail U.S. Postage Paid <Company Name> IMb-POSTAGE FIRST-CLASS MAIL US POSTAGE PAID COMPANY NAME IMB POSTAGE JOHN DOE 123 MAIN ST CITSY STATE ZIP+4 CODE 1 3 2

One price for commercial letters up-to 3.5oz SINGLE PRICE $$ $$ 2.0oz 3.5oz

Standard Mail Price Changes Price Increase Product CPI Percent Change Letters 2.0% Flats 2.5% Carrier Route Letters, Flats, and Parcels -3.0% High Density/Saturation Letters 2.2% High Density/Saturation Flats and Parcels -2.0% Parcels 1.6% EDDM-Retail 0.6%

Rename “Standard Mail” to “USPS Marketing Mail” The new indicia and/or postage markings should not be used for letter or flat mail until January 2018 at the earliest Tray label and pallet markings will be deferred until mid-2017 at the earliest NEW

Reduce from 6 volume tiers to 2 volume tiers: Standard Mail Parcels Simplify pricing structure of Saturation and Carrier Route Parcels (Simple Samples) Reduce from 6 volume tiers to 2 volume tiers: Volumes up to and equal to 200,000 pieces Volumes greater than 200,000 pieces OLD 6 tiers reduced to 2 tiers

Periodicals and Package Services Price Change CPI Percent Change Outside County 0.8% Inside County 1.0% Package Services CPI Percent Change Media Mail/Library Mail 1.1% Alaska Bypass Bound Printed Matter: Flats 0.8% Parcels 1.0%

Provides images of daily mail before it is delivered to mailbox Informed Delivery Provides images of daily mail before it is delivered to mailbox http://www.informeddelivery.com/learnmore/

2017 Promotions and Incentives

2017 Promotions and Incentives First-Class Mail Promotions: Earned Value Enclose BRM or CRM envelopes in outgoing mail Will include Share Mail 2017 Color Transpromo Use print technology in messaging to create consumer connection

2017 Promotions and Incentives Standard Mail and First-Class Mail Promotion: Emerging & Advanced Technology Incorporate interactive technology to drive interest in mail as a marketing channel 3 new categories: Links Paper Interactive Technologies Augmented Reality NFC

2017 Promotions and Incentives Standard Mail Promotions: Tactile, Sensory & Interactive Mailpiece Engagement Innovative use of specialty elements that the recipient can interact with and manipulate on the mailpiece Samples must be approved prior to mailing to qualify for this promotion Direct Mail Starter Incentive First-time mailers incorporate qualifying print-mobile Standard Mail (letters or flats) Regular/Non-Profit Discount may apply up to 10,000 pieces during promotion period Offers 5% discount at the time of mailing

2017 Promotions and Incentives NEW Standard Mail Promotion: Mobile Shopping Examples of acceptable color branded barcodes Color Banded Mobile barcode can be used – must be functional and incorporate one of the following: 2 or more colors Trademark or graphic that includes color(s) QR Code Evolution:

Elimination of Permit Fees Eliminate the following permit fees: Permit Type Fee Return Services Return Services Annual Permit Return Services Account Maintenance Business Reply Mail Annual Permit Fee* Permit Imprint Parcel Select Presorted Library Mail Presorted Media Mail *Parcels only or QBRM (see next slide for more details)

High-Volume Parcel Invoicing Business Reply Mail January 2017 new fee requirement rules are in effect BRM Basic Parcel Invoicing High-Volume Parcel Invoicing QBRM Letters & Flats High-Volume QBRM Letters & Flats Master Annual Permit Fee Payment Sub-account’s Annual Maintenance Fee NA Sub-account’s QBRM Quarterly Fee BRM Sub-Accounts can now pay their Annual Account Maintenance Fee or QBRM Quarterly Fees without having their associated Master’s Annual Permit Fee paid first.

Shipping Products Permit New Shipping Products Permit PI/OI Outbound and return parcels only No permit fees Manage 1 permit

Shipping Products Permit Eligible Parcels Not Eligible Priority Mail Express Priority Mail Parcel Select and Parcel Select Lightweight First-Class Package Services Bound Printed Matter (parcels only) Media Mail Library Mail Standard Mail Periodicals Cards, Letters, or Flats of any mail class

Shipping Products Permit Current Shipping Permits New Shipping Products Permit Mailer Mailer pays: Outbound Fee (Permit A) Returns Fee (Permit B) Annual Mailing/Maintenance Fees (A & B) Return Parcels Outbound Parcels Mailer Mailer pays: No Fees Return Parcels Outbound Parcels Permit B Permit A Permit A Permit A

Shipping Products Permit Mailers using the Shipping Products Permit can accept returns using: Parcel Return Service (PRS) via electronic Verification System (eVS) USPS Returns via Scan Based Payment (SBP) Spring 2017 the Shipping Products Permit will be available to mailers using: Business Reply Mail for parcels Merchandise Return Service labels

Shipping Products Permit Requesting a Shipping Products Permit: New Mailers via Business Customer Gateway Existing Mailers: PostalOne! via acceptance employees New Mailers Existing Mailers

Full-Service Cumulative Percent Display Background on Cumulative Percentage and Fee Waiver Mailers claiming presorted rates pay an annual fee for each permit Annual fee is waived if: Full-Service mailing Cumulative % is consistently maintained at 90% or greater Cumulative % is calculated using the following formula: As of Nov 2013 fee waiver changed from per-mailing to cumulative Full-Service % Fee waiver period Cumulative period Fee Anniversary Date End Date Note: Fee waiver period and cumulative period are concurrent

Full-Service Cumulative Percent Display Background - Fee Waiver Period Ends - Scenario 1: Fee Anniversary date arrives triggering a reset

Full-Service Cumulative Percent Display Background - Fee Waiver Period Ends - Scenario 2: Cumulative Full-Service % falls below 90 Annual fee is due and paid

Full-Service Fee Wavier PostalOne! will review daily postage statement cumulative to determine Full-Service percentage Includes submitted and reversed postage statements Change mitigates postage statements being finalized in manner that may negatively impact mailer Once a fee is paid, PostalOne! does not look at the Full-Service percentage until the next anniversary date: The date the fee is paid will become the new anniversary date Each anniversary renewal date resets the Full-Service percentage to 0% Fee Waived 90% cumulative Full-Service volume Fee Paid

Priority Mail Express Price Increases Service Before Jan 22 After Jan 22 Flat Rate Envelope $22.95 $23.75 Legal Flat Rate Envelope $23.95 Padded Flat Rate Envelope $24.45

Domestic Extra Services Price Increases Service Before Jan 22 After Jan 22 Adult Signature Basic Service $5.70 $5.90 Person Specific Service $5.95 $6.15 Pickup On Demand $20.00 $22.00 Package Intercept Service $12.55 $12.95 Premium Forwarding Service (PFS) Commercial, Priority Mail Express or Priority Mail shipments can be dispatched in bulk at a flat rate for full and half trays

Priority Mail Price Increases Service Before Jan 22 After Jan 22 Flat Rate Envelope $6.45 $6.65 Legal Flat Rate Envelope $6.95 Padded Flat Rate Envelope $6.80 $7.20 Small Flat Rate Box $7.15 Medium Flat Rate Box $13.45 $13.60 Large Flat Rate Box $18.75 $18.85 Large APO/FPO/DPO Flat Rate Box $16.75 $17.35

Other Services Price Increases Service Price Increase % International Surface Air Lift 3.8% ISAL M-Bags 3.9% International Priority Airmail IPA M-Bags Airmail M-Bags 4.9% First-Class Package International Service No change International Ancillary Services & Special Services 10.6% International Money Orders 73.7% Outbound International Registered Mail 7.2%

Extra Services Price Change CPI Percent Change PO Boxes™ 6.7% Certified Mail® 1.5% Return Receipt 2.9% Registered Mail™ 0.0% Insurance 0.5% COD 2.5% All Other

Price Change 2017: Resources Postal Explorer: pe.usps.com Current and new prices: including downloadable price files in Excel and CSV formats Federal Register Notices Domestic Mail Manual & International Mail Manual BMA page: http://blue.usps.gov/bma/ PostalPro: http://beta.postalpro.usps.com/