February 17, 2015

2 USPS Leadership Forum for Stakeholders

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4 Quarter 1, FY October 1,2014 through December 31, Target % On-Time

Target Quarter 1, FY % On-Time October 1,2014 through December 31, 2014

Target Quarter 1, FY % On-Time October 1,2014 through December 31, 2014

Target Quarter 1, FY % On-Time October 1,2014 through December 31, 2014

Quarter 1, FY % On-Time Target October 1,2014 through December 31, 2014

Quarter 1, FY % On-Time Target October 1,2014 through December 31, 2014

10 Continuous Improvement Focus  Stabilizing Operating Window Change  Lean Mail Processing Certification in all Plants  Reducing Processing Cycle Times  3-5 Day Improvement Focus  Air and Surface Capacities  Continual Monitoring of Surface Routes to Ensure Service Compliance and Service Responsiveness  Deep Dive Reviews with Each Area Service Performance

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PEAK Season  Supplemental Staffing  Mail Processing Equipment and Space  We positioned ourselves for success by making investments in: investments in:  Transportation  Scanning Technology  Vehicles  Expanded Sunday Processing  Retail Technology  Expanded Delivery Window  Very Successful 2014 Peak Season

13 Peak Season 2014  463M Pieces of Mail Delivered in December  Cancellations down 4.4% to SPLY  524M Packages Delivered in December  18% Increase over SPLY  20M Packages Delivered on 5 Sundays

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15 Phase II Network Rationalization OPERATING WINDOW CHANGE ENABLES:  Consistency in consumer receiving experience  Repurposing of facility space  Response to shift in marketplace demands  Positioning us for future – package growth  Expanded Remittance Mail and Caller Service processing window  Capturing of greater efficiency

JANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDEC Jan 5 Jan 5 Operational Window Change April 18 Q3 Employee Move Date January 10 Plant Consolidations Begin & Q2 Employee Move Date July 25 Q4 Employee Move Date October 1 Finalize All 82 Consolidation Activities October 31 Q1 Employee Move Date | | | | | | | Timeline Network Rationalization Phase 2 – MAIL MOVES BY MONTH 6 16  82 Consolidations  406 Mail Moves

 Enables mailers to plan consolidation implementation progress  File provides 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) 17

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 Weekly Note: A new "Read Me First" tab has been added to this spreadsheet to explain key information displayed. 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 18

Frequently asked questions posted to RIBBS RIBBS Important Updates & FAQ’s 19 Added Important Network Rationalization Information

Available Tools Panorama (BSN eService) 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 Panorama (BSN eService) system  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 Mail Letters Standard Mail Flats  Weekly Monitoring of: Work in Process (WIP) cycle time Pieces processed after clearance time STD on-hand 20 Early Warning System (EWS)

 USPS remains committed to continued information sharing  Mailers continue planning based on Mail Move plan schedule  Mail Move plan published weekly on the USPS Rapid Information Bulletin Board (RIBBS) at:  Report issues/concerns through available tools Industry Engagement is Imperative Industry Engagement 21

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USPS Innovation Opportunities 23 Physical Network First Mile Last Mile DigitalDigital  Leverage market- leading physical assets  Incorporate evolving logistics solutions  Develop a structure that fosters agility and innovation  Boost the demand for mail and packages  Expand and simplify induction points  Integrate emerging digital, big data, and consumer trends to grow  Expand delivery solutions  Capitalize on the expansion of E- commerce and technology  Optimize route flexibility and productivity  Leverage USPS’s brand, trust and reputation to drive profit

Next Generation Mailbox Pilots Suburban Box Pilot:  Four pilot routes in CA, CO and ND  First Box installed on  298 Customers have registered for the Next Gen Mailbox – 201 boxes installed  Next phase will target routes and addresses with the most delivered scans that were not scanned delivered in/at box or a parcel locker  Customer feedback: “This is amazing. I don’t have to go to the PO anymore.”“This is amazing. I don’t have to go to the PO anymore.” “I’ve been making more online purchases because the mailbox is so convenient.”“I’ve been making more online purchases because the mailbox is so convenient.” Urban Box Pilot:  Four pilot sites (Boston, Brooklyn, Pittsburgh & Wash DC)  Four boxes installed as of 2/11  28 customers have registered for the Next Gen Mailbox  Weather has delayed some installations 24

Customized Delivery 25 Leverage Last Mile Testing Grocery Delivery  Current Market San Francisco, CA - 41 ZIPs  Expansion Markets (In-Progress) San Diego, CA - 49 ZIPs Los Angeles, CA - 20 ZIPs Santa Ana, CA - 95 ZIPs  Future Expansion Markets Bronx, NY Manhattan, NY Stamford, CT Bridgeford, CT Use last-mile advantage to win ship-from-store trend Seattle, WA Tacoma, WA Portland, OR

Extensive Delivery Network 26 7-Day Delivery  Leveraging Sunday Delivery to Grow Overall Package Business  7,508 ZIP Codes have Sunday Delivery  31,000 Additional ZIP Codes Mapped for Sunday Hubs  Onboarding New Customers Same Day Delivery:  Early Bird  Onboarding New Customers

Metro Post 27 METRO POST  Same Day – Afternoon/Evening Package Delivery  Current Metro Post Locations: New YorkNew York PhoenixPhoenix  Expansion Opportunity: 11 Additional Cities11 Additional Cities 1,897 ZIPs1,897 ZIPs  Possible Expansion to Begin Spring 2015 AtlantaNorthern VA BaltimorePhiladelphia BostonPhoenix DallasSan Francisco IndianapolisSeattle Los AngelesWashington DC New York

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Industry Collaboration  MTAC 159 Hub Workgroup  MTEOR User Group 7  FAST User Group 3  Presort Reference Data User Group 9  Mail Prep and Entry Steering Committee  CS Agreement Process Improvement Team  Joint Bundle Breakage Reduction Effort  MTAC 168 Multi-scheme FSS Pallets Workgroup  MTAC 169 Refining Package Machinability Standards 29

30 NPF Anaheim, CA May Area Mailing Industry Focus Groups – Calendar by Area Council  Committed to Collaboration/Communication  Exchange Ideas & Resolve Issues  Drive Innovation and Adopt Technology  MTAC  Association Meetings  NPF  Trade shows and other events Success Requires Collective Effort

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