The Future of Presort MSMA August 15,2007 Alison HallDennis Shults General ManagerOwner Pitney Bowes PSI Presort Services KC Presort

What is Presort Anyway? Presort – To sort mail according to Zip Codes before delivering to the Post Office.Presort – To sort mail according to Zip Codes before delivering to the Post Office. –The process by which a mailer prepares mail so that it is sorted to the finest extent required by the standards for the rate claimed. Generally, presort is performed sequentially, from the lowest (finest) level to the highest level, to those destinations specified by standard and is completed at each level before the next level is prepared. Not all presort levels are applicable to all mailings. -Business Mailers 101 Presort Mailer – A mailer that presorts or has their mail presorted. They earn a worksharing discount that reflects the reduced cost of processing to the USPS.Presort Mailer – A mailer that presorts or has their mail presorted. They earn a worksharing discount that reflects the reduced cost of processing to the USPS. -National Association of Presort Mailers

Different forms of Presort PresortPresort ManifestManifest Commingling (MLOCR)Commingling (MLOCR)

Automation Presort Reclassification 1996Reclassification 1996 USPS wants partnersUSPS wants partners Mutually BeneficialMutually Beneficial

Presort Today Transformation Plan Transformation Plan Shape Based RatesShape Based Rates Clean Addresses – DPV Cass Cycle LClean Addresses – DPV Cass Cycle L The Postal Accountability and Enhancement Act, Dec 22, 2006The Postal Accountability and Enhancement Act, Dec 22, 2006

Presort in the Future Annual Rate ChangesAnnual Rate Changes FSSFSS Intelligent Mail BarcodeIntelligent Mail Barcode Seamless AcceptanceSeamless Acceptance

FSS – Flats Sequencing System Battle between Delivery Point Packaging and FSS has been decidedBattle between Delivery Point Packaging and FSS has been decided Letters and Flats sorted separatelyLetters and Flats sorted separately –DP sequence sorting for letters continues –Flats to also be sequenced to Delivery Points –Non-automated mail will continue to be hand cased Future rate cases should incentivise Flat sorting to deeper levelsFuture rate cases should incentivise Flat sorting to deeper levels

Intelligent Mail Barcode

Benefits of IM Barcode Combines Postnet, Planet, and special services into a single codeCombines Postnet, Planet, and special services into a single code Leaves more available mailpiece “real estate”Leaves more available mailpiece “real estate” More overall data capacityMore overall data capacity Relates services back to 1 unique customer IDRelates services back to 1 unique customer ID Allows for uniquely identifiable mailpieces.Allows for uniquely identifiable mailpieces.

Letters and Flats - Old World to New World FROM THIS TO THIS

Presort in the Future Annual Rate ChangesAnnual Rate Changes FSSFSS Intelligent Mail BarcodeIntelligent Mail Barcode Seamless AcceptanceSeamless Acceptance

Seamless Acceptance 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 Communication Medium. -USPS

Seamless Acceptance Integrated Approach

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