1 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved

2 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Overview On May 14, 2007, the United States Postal Service intends to implement a rate change and introduce a dramatic new way of determining the correct postage rate, called Shape-Based Pricing.

3 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Not A Normal Rate Change Currently based on: –Weight Will be based on: –Length –Height –Weight –Thickness The USPS is not just changing the rates, but changing the classification structure as well!

4 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved 2-ounce letter 63¢ 2-ounce flat 63¢ 2-ounce parcel 63¢ ►58¢ ►97¢► $ % +54.0% % Postage will no longer be based solely on weight! SBP Pricing Example

5 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Shape Based Mail Formats Letter Flat (Large Letter) Parcel First Class

6 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Each Add. Oz... 24¢ Each Add. Oz..17¢ * Oversize surcharge of.13¢ for flats weighing 1 oz. or less, or letters that have non-machinable characteristics * Oversize surcharge eliminated. Current RatesMay 14, 2007 Rates 1st Class Rates at a Glance

7 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Mail Processing Flowchart (First Class Example)

8 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Pay Attention To Shape Review designs of all current and planned mailings to ensure that they are cost effective using SBP requirements. For example: –A 1 oz. 6” by 6” envelope’s aspect ratio (length divided by height, must be between 1:3 and 2:5) is 1.0, and is subject to the non-machinable surcharge of $0.17 (41 cents vs. 58 cents, a 41% increase).

9 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Fold and Save Unfolded pages inserted into flats will typically cost more. –Reduce large envelopes when possible –Consider 6 X 9 envelopes or #10s. –Possible savings up to.56 per piece –Difference of.6 oz. between #10/Flat –Folding saves postage.

10 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Fold and Save Flatten and Save too! Consider flats when smaller envelopes exceed ¾” Possible savings up to.33 per piece ¾”+ Less than ¾” 2oz.= $1.30 3oz. = $1.47 2oz.=$0.97 3oz. = $1.14

11 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Minimize Costly Flats 6 x 9.5” + = $ Pages Folded in ½ + = $0.41 9” x 12” Flat2 Pages 49% Savings! Thin Flat Reconfiguration Example:

12 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Think Thin 6” x 9.5” + = $ Flat Rate 9 Pages ½ Folded + = $ Letter Rate 6 Pages 40% Savings! Thin Flat Reconfiguration Example: #10 Envelope 6 Pages 9 Pages Of 20lb. – Over ¼” 6 Pages 9 Pages

13 Proprietary Information. Copyright  2007 Hasler, Inc. All Rights Reserved Top 10 Strategies to Survive Shape Based Pricing Summary Size Matters!!! Convert flats to 6 X 9s or #10s Be aware of and change/convert thick items when possible Guessing only leads to over/under posting, both of which mean wasted $