Intelligent Mail February 2007

2 Vision Provide end-to-end visibility and a seamless process for mail acceptance and delivery, using standardized intelligent barcodes, continuous mail tracking, and mail quality feedback in real-time, to position Letters and Flats as a Key Communications Medium

3 Where Mail Enters the USPS Retail  Consumer & Small Business  Deposit Single-Piece Mail Business Mail Acceptance  Small, Medium & Large Business  Present Workshare Mail » Barcode » Presort » Dropship Retail ~ 26% Retail Revenue ~ 26% Commercial Revenue ~ 74%

4 Old World Transportation Barcoding & Addressing Barcoding & Addressing U. S. Postal Service 6060 PRIMACY PKWY STE 201 Memphis TN John Smith 123 Main Street Memphis TN Mail Processing & Delivery Mail Processing & Delivery Acceptance

5 Barcoding Old World Barcoding & Addressing U. S. Postal Service 6060 PRIMACY PKWY STE 201 Memphis TN John Smith 123 Main Street Memphis TN  POSTNET (1991) limited to delivery information  Any services requested requires additional barcodes & Addressing

6 Old World Barcoding & Addressing U. S. Postal Service 6060 PRIMACY PKWY STE 201 Memphis TN John Smith 123 Main Street Memphis TN  Limited checking of mailer’s address list quality Barcoding & Addressing

7 Sorting from: Post Office Level Carrier Delivery Sequence Good Address 2 Automation Handlings Bad Address Old World Cost of Poor $5/1000 pieces = 1 $5/1000 pieces 14.7 Cents REJECTED 1 Automation $71/1000 pieces 2 Manual Handlings = }

8 Old World Acceptance Acceptance  Verification based on sampling  Primarily manual record keeping, payment & verification  Limited information on mail arrival, quality, and whereabouts

9 Old World Transportation Transportation  Staffing and equipment planning not linked to mail arrival » Primarily based on historical information

10 Old World Processing & Delivery Mail Processing & Delivery  Limited service performance (EXFC)  Limited tracking (CONFIRM)

11 New World Integrated Approach Transportation Barcoding & Addressing Barcoding & Addressing U. S. Postal Service 6060 PRIMACY PKWY STE 201 Memphis TN John Smith 123 Main Street Memphis TN Acceptance Mail Processing & Delivery Mail Processing & Delivery

12 Standardized Intelligent Barcodes  Uniquely identify the sender  Uniquely identify the mail piece  Identify any service mailer requests  Provide a destination ZIP Code for sortation & routing Company X Intelligent Mail Barcode Intelligent Mail Barcode Intelligent Tray Barcode Intelligent Tray Barcode Intelligent Container Barcode 6060 PRIMACY PKWY STE 201 MEMPHIS TN Address Change Service John Doe 6449 AMBERVIEW CV MEMPHIS TN

13  Converting largest customer mailings » Move confirmation letters (MVL / CNL) – Jan ‘07 » Dialog campaign – June ’07 USPS Converting to Intelligent Mail Barcode John Doe 6449 AMBERVIEW CV MEMPHIS TN Dialog Campaign Move Validation Letter Customer Notification Letter  Converting largest employee mailings » Payroll – Spring ‘07 » Area Updates – TBD

PRIMACY PKWY STE 201 MEMPHIS TN Address Change Service John Doe 6449 AMBERVIEW CV MEMPHIS TN  Mailer preparation » Mail prepared with unique barcodes Mail Preparation Unique Container Barcode Unique Mailpiece Barcode Unique Tray Barcode

15  Mailer interacts electronically » Manifests with mailing details (barcodes) » Centralized payment » Advance notification Electronic Mailing Information PostalOne! Payment FAST Appointment Web Message Mail.Dat Web Services Postage Statement Wizard 6060 PRIMACY PKWY STE 201 MEMPHIS TN Address Change Service John Doe 6449 AMBERVIEW CV MEMPHIS TN

16  Resource and transportation optimization » Advance notification & USPS transportation systems – Enables better staffing and equipment management – Enables transportation planning Transportation Web Message USPS Systems FAST Appointment

17  Verify while mail is being processed  Scanning » Induction scan » Processing scans » Last scan predicts delivery  Reconcile scan data against manifests  Quality Feedback Seamless Acceptance Automated Reconciliation Processing Scans Induction Scans

18  Passive scanning of mail pieces  Scans provide data to measure address quality  Every mailing measured  Incentives or disincentives based on measured quality Seamless Acceptance: Addressing Automated Reconciliation Processing Scans

19  Comprehensive service performance » By plant » By class » By customer » By pre-sort level  Point-to-Point diagnostics Service Performance Barcoding & Addressing 6060 PRIMACY PKWY STE 201 MEMPHIS TN Address Change Service John Doe 6449 AMBERVIEW CV MEMPHIS TN Transportation Integrated Approach Mail Processing & Delivery Mail Processing & Delivery Acceptance

20 Continuous Mail Tracking and Quality Feedback Electronic Collaboration Automated Payment Advance Notification Automated Reconciliation

21 Customer Feedback – Manifest & Payment » Postage Estimates » Balance Information » Fee Schedule » Postage Transactions » Payment Receipts  Mailer receives payment feedback Automated Payment Electronic Collaboration

22 Customer Feedback – Advance Notification » Processing Confirmation » Appointment Number » Date/Time/Location  Mailer receives advance notification feedback Advance Notification Electronic Collaboration

23 Customer Feedback – Induction » Arrival Date/Time » Arrival Content Profile  Mailer receives induction feedback Electronic Collaboration

24 Customer Feedback – Visibility & Performance Track » Containers/Pallets » Trays/Sacks » Mailpieces Service Performance  Mailer receives visibility & performance feedback Electronic Collaboration

25 Customer Feedback – Address Quality  Mailer receives address quality feedback » Undeliverable-as-Addressed » Updated Address » Incorrect Address » Correct Address Electronic Collaboration 98765** NATIONAL POSTAL FORUM MOUNT VERNON PLACE NW WASHINGTON DC N LYNN ST ARLINGTON VA

26 Customer Feedback – Quality  Mailer receives mail quality feedback » Piece Count Quality » Presort Quality » Barcode Quality » Address Quality Electronic Collaboration

27 Customer Feedback – Reconciliation  Mailer receives reconciliation feedback Adjustments » Piece Count Quality » Presort Quality » Barcode Quality » Address Quality Automated Reconciliation Electronic Collaboration

28 Mail as a Key Communications Medium  Decision Support  Finance  Marketing  Operations  Supplier Management Supplier Selection Finance Operations Marketing Messaging Technology Smarter Decisions with Intelligent Mail

29 New World Intelligent Mail celebrated as a Key Communications Medium John Doe 6449 AMBERVIEW CV MEMPHIS TN  Traceable Mail  Identifiable Mail  Efficient Mail  Quality Mail  Responsive Mail  Predictable Mail  Reliable Mail  Accountable Mail 6060 PRIMACY PKWY STE 201 MEMPHIS TN Address Change Service

30 Vision Provide end-to-end visibility and a seamless process for mail acceptance and delivery, using standardized intelligent barcodes, continuous mail tracking, and mail quality feedback in real-time, to position Letters and Flats as a Key Communications Medium