1 MTAC 138 April 23, 2014 FAST User Group 3 January 21, 2015

2 Agenda  Roll Call + Review Meeting Minutes (~5 minutes)  Updates (~5 minutes) –Mail.XML Version 10.0 No Longer Supported: R41 –Issue Regarding Testing FAST TEM Environment Follow Up Is testing for making an appointment for HUBs working?  eInduction Pilot at Non-SV Sites Update (~5 minutes)  Network Rationalization Presentation (~40 minutes)  Wrap-up: Questions & Action Items (~5 minutes)

3 Roll Call + Review Meeting Minutes  Roll call  Minutes from January 7 th meeting are posted on MITS –Previous Meeting Summary Completed eInduction Warnings & Verifications Presentation Reviewed Issue Around Testing the FAST TEM Environment Discussed Mail Direction File (V3) ⁻ Conclusion: Still a viable file  Questions or concerns?

4 Updates –Mail.XML Version 10.0 No Longer Supported: R41 –Issue Regarding Testing FAST TEM Environment Follow Up Is testing for making an appointment for HUBs working? eInduction Pilot at Non-SV Sites  The USPS is rolling out eInduction to ALL Non-SV sites starting next Monday, January 26 th  The Postal Service asks mailers to contact USPS at the eInduction USPS account about concerns with scans, misshipped containers etc during national employment. This will be communicated up through the national deployment

5 FOOTER (10PT. ARIAL, BOLD, GREY, CAPS) TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE) Subtitle (20pt. Arial, Bold, Title Case) Network Rationalization

6  Business Imperative  Phase II Service Standards & CETs  Concept of Operations & Volume Distribution  Phase II Network  Consolidation Timeline  Commitment to Employees  Commitment to Customers  Communication Plans  Project Management Approach Agenda

7  Financial losses of $26 Billion over last 3 years  Continued decline of First-Class Mail volume & revenue  Increasing wage inflation and operating costs  Increasing debt pressures  Uncertainty regarding legislative reform  Review of postal prices in courts  Needed capital investments to acquire package sorting equipment and replace aging delivery vehicle fleet Business Imperative

8 FUTURE NETWORK  Preserves Approx. 66% of Overnight Delivery Volume  Revised Entry Times  Reduced Equipment  Reduced Footprint PHASE II BENEFITS  Reduce Excess Capacity  More Efficient Transportation Network  Fully Utilized Workforce  Up to $750 Million Cost Reduction Driving Efficiency

9 Volume Decline Source: RPW, FY2007 – FY % decline since AMP packages developed

10 Service Standard Changes – Phase II  First Class Mail –Overnight: First Class Presort mail, properly prepared, containerized, for local plants SCF service area, entered by applicable CET –2-day: Intra-SCF single-piece mail or maximum 6 hour drive time between originating facility and SCF facility –3-5 day: Everything else  Periodicals –End-to-end Periodicals transported with First-Class Mail pieces on surface transportation move to a minimum 3-day service standard (equal to the sum of 1 day plus the FCM service standard) revised-service-standards-for-market-dominant-mail-products

11 Periodicals CET Matrix – Phase II Service Standard Change Type No Bundle Sort Needed 5-Digit / Scheme Container Bundle Sort Needed 3-Digit and Up Container Direct 5 Digit Carrier Route Pallets Non FSS FSS Periodicals CETs – Under Phase II Service Standard Change

12 24:00 06:00 12:00 18:00 08:00 Outgoing Operations (5:00 PM – 12:30 AM) Continuous DPS/Secondary Operations (12:00 PM – 6:00 AM) Incoming Primary Operations (8:00 AM – 12:00 PM) BMEU (8:00 AM – 7:00 PM) Continuous Remittance/ Caller Service Processing Concept of 24-Hour Plant Operations

13 USPS Modeled Processing Network Phase II Plan to consolidate processing at 82 mail processing sites in 2015 Facility TypeTotal Annexes2 Customer Service Facilities16 DDC's1 P&DC/P&DF's63 Total82

14 Decrease in Processing Locations Through 2016 Plant Consolidation 239 At start of FY

15  Realignment of operating windows commensurate with earlier availability of committed volume  Realignment of transportation  Delivery opportunities through the earlier availability of mail volume Optimization Opportunities 82 Consolidation Opportunities Identified Savings with the Operational Window Change 82 Moves Proceeding with January 10, 2015 Employee Move Date Phase II- Significant Savings Opportunities Identified

JANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDEC Jan 5 Jan 5 Operational Window Change effective January 10 Plant Consolidations Mail Moves Begin October 1 Finalize All Consolidation Activities | | | | | | | Timeline Network Rationalization Phase 2 – 2015 Timeline Network Rationalization Phase 2 –

17 Methodical, measured transition Options available for staying with the Postal Service Proven track record of working with Unions and Management Associations; success through attrition OUR COMMITMENT TO EMPLOYEES Employees

18 Changes  Planning for new mail processing footprint and transport pattern  Revised Critical Entry Times Our Approach  Industry-specific solutions, as needed  Ongoing communication and collaborative mitigation of issues Our Customers

19  Early Warning System well established  Mail move plan updated and posted on RIBBS  Continued communication with the mailing industry  Site Intervention based on Early Warning System  Feedback system in place to address customer issues: CustomerFirst! System BSN eService Tools & Processes in place to ensure High Level of Service Performance Flawless Execution Recovery “Tiger Team” Early Warning System High Levels of Service Performance Expected

20 AVAILABLE TOOLS CustomerFirst! System  Business Service Network’s (BSN) repository of mailer customer issues  Issues tracked as Service Requests (SR)  SRs handled as open tickets needing resolution in order to be closed BSN eService  Customer-facing access point for CustomerFirst!  BSN customers can submit electronic inquiries and can learn status of inquiry from web account  Non-BSN customers may contact a local BSN representative by phone or for support EWS Reports  Daily Monitoring of plant inventory levels First Class Periodicals Standard Letters Standard Flats  Weekly Monitoring of: Work in Process (WIP) cycle time Pieces processed after clearance time Mail Conditions Early Warning System (EWS) Seamless Service Performance Tools

21  Enables mailers to plan consolidation implementation progress  File provides targeted mail move consolidation site information, type, and date Mail Move Plan File Mail Move Plan is updated and posted on RIBBS RIBBS Mail Move Plan AREA KeyDe-Activation Plant Mail Activation Plant OriginatingDestinatingDPS O- Letter O-Flat O- Packag e D- Letter D-Flat D- Package DPS- Letter DPS-Flat SA Huntsville P&DF CCCCCC7/25/15N/A Birmingham P&DC WA Tucson P&DC CC7/11/15 N/A Phoenix P&DC PA WAEureka CSMPC 7/11/15 N/A Medford CSMPC PA Industry P&DC N/A 4/18/15N/A 4/18/15N/A Santa Ana P&DC (letters) PA Industry P&DC N/A 9/30/15N/A4/18/159/30/15N/A Anaheim P&DC (flats)

22 Mail Move Plan File Includes:  Consolidation sites scheduled for 2015  Site address, locale key, and the name of the activation (gaining) facility  Mail shape effected (e.g. letters, flats, parcels/bundles)  Process step/entry level ( e.g. originating, destinating, and DPS) Mail Move Plan File Updated January 9th, 2015 Note: A new "Read Me First" tab has been added to this spreadsheet to explain key information in displayed below. Key N/A = Not Applicable C or Completion Date = Previously Completed AREA KeyDe-Activation Plant Mail OriginatingDestinatingDPS O- Letter O-Flat O- Package D- Letter D-Flat D- Package DPS- Letter DPS-Flat SA Huntsville P&DF CCCCCC7/25/15N/A WA Tucson P&DC CC7/11/15 N/A PA WAEureka CSMPC 7/11/15 N/A PA Industry P&DC N/A 4/18/15N/A 4/18/15N/A PA Industry P&DC N/A 9/30/15N/A4/18/159/30/15N/A PA North Bay P&DC CCC7/25/15CC N/A PA Redding CSMPC 4/18/15 N/A WA Colorado Springs P&DC CCN/AC7/11/15 N/A NE Southern Connecticut P&DC 9/7/13 N/A9/7/13 N/A4/18/15N/A NE Southern Connecticut P&DC N/A 4/18/155/1/13N/A NE Stamford P&DC 6/17/13 N/A9/7/131/10/159/7/134/18/151/10/15 SA Gainesville P&DC CCCC7/25/15CN/A SA Manasota P&DC CCC9/30/15 C N/A SA Manasota P&DC CCC9/30/15 C N/A SA Mid-Florida P&DC CCCCCC7/25/15N/A CM Athens GA P&DF CCC4/18/15 N/A SA CMAugusta P&DF 7/25/15 N/A SA Augusta P&DF 9/30/15 N/A WA Pocatello ID CSMPC 4/18/15 N/A GL Fox Valley P&DC CCC9/30/15 N/A9/30/15TBD GL Gary P&DC CCC7/25/15 TBD7/25/15N/A GL Kokomo IN P&DF CCC3/14/15 N/A GL Lafayette IN P&DF CCC4/18/15 N/A GL Muncie P&DF CCC7/18/15 N/A GL South Bend P&DC 2/14/15 6/13/15 N/A WA Salina KS P&DF CCC4/18/15 N/A EA Campton CSMPC6/1/15 7/1/15 N/A AREA KeyDe-Activation Plant Mail Activation Plant OriginatingDestinatingDPS O-LetterO-FlatO-PackageD-LetterD-FlatD-PackageDPS-LetterDPS-Flat SA Huntsville P&DF CCCCCC7/25/15N/A Birmingham P&DC WA Tucson P&DC CC7/11/15 N/A Phoenix P&DC

23 RIBBS FAQ’s Frequently asked questions posted to RIBBS

24 We will continue:  Industry Alerts  Industry, PCC webinars and presentations PCC and Managed Account messaging from:  PCC program office  HQ Business Customer Support & Service  From Area and District BSNs BME messaging to affected customers Weekly posting of planned operational moves on RIBBS Structured release cycle for labeling list / mail directional file changes Industry and Customer Communications

25 Project Management

26 Project Plans Established for:  Consolidated Site  Gaining Site  All Sites – Operating Window Changes Project Plans

Complement Advantages of a Transformed Infrastructure Phase ll Benefits Advantages of a Transformed Infrastructure Phase ll Benefits  Reduce Excess Capacity  More Efficient Transportation Network  Fully Utilized Workforce  Up to $750 Million Cost Reduction  Reduced Equipment  Reduced Footprint  Revised Entry Times Phase ll Benefits: 27

28  100% commitment to success of Network Rationalization  Commitment to minimal impacts to customers and our employees  Achievement of the savings projections Our Commitment

29 We are doing our utmost to maintain the long-term affordability of mail and high level of service Long-term Affordability and High Levels of Service We are working to make this transition as seamless as possible for our business customers as well as our 150 million residential addresses Seamless Transition We value the mail and our employees and will provide responsible solutions throughout the transition Responsible Solutions Concluding Thoughts

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31 Action Items Item # Open ItemsOwner 1Follow up on multi stop appointments and whether appointments must be linked and if a mailer has to have Accept_Misship = “Y” 2Further discussion into the appeals process regarding multi stop loads 3Find a special case regarding how the Postal Service finds the discount level (potentially at a collocated site) and pull a drop site locale key reference 4Follow up regarding the discussion around small mailers 5Future Agenda Topic: Update on eInduction Reports for FCM logical mailers do not work 6Table Zone Discount Verification (E13P) slide 23 for the next meeting. Pull this specific discussion for Zone Discount Verification and to organize for the next discussion 7Double check EPD (slides 19-21) and Zone Discount Verification (slides 22-24) to make sure this wasn’t a copy

32 Action Items Item # Open ItemsOwner 8Double check in this release if changes were made so that Zone Table would be off induction time versus calculation time and postage time. The changes were separate from the eInduction focus. 9Send files to the group regarding the MDF/Labeling List Effective Dates. Try to include effective dates in April release 10Update on Entry Point Discount Mismatch Warning (E7). This is still going on in CAT. Update if it falls out and if there are clarifications 11Industry Request: Expecting this UG to handle all eInduction things, such as going through these reports to make sure they meet the needs of everyone (ie: make sure there are reports. They want to see the language and the errors and then go through the reports) 12Industry to provide an answer as to if the testing for making an appointment for HUB is working 13At one time we talked about getting facility name back into PostalOne!. It is difficult to look up because of locale keys. What is the status of this? Action: Double check this and bring this up in the presentation

33 MTAC 138 April 23, 2014 Questions?