Improving the Drop Shipment Process MTAC Workgroup 87 Update Washington, D.C. August 2, 2007

MTAC #87 2 Agenda Mailer Rating Pilot National Deployment Next Steps

MTAC #87 3 Mailer Rating Pilot Status Executing the Mailer Rating Pilot (June 22 – August 17) at the following facilities: CEDAR RAPIDS Plant in Cedar Rapids, IA DES MOINES BMC in Des Moines, IA INDUSTRY Plant in Industry, CA QUEENS Plant in Flushing, NY NEW YORK Plant in New York, NY Weekly teleconferences are being held with the mailers, FAST coordinators, and Surface Visibility coordinators at pilot facilities

MTAC #87 4 Top Four Areas of Improvement 1.No Show Appointments in FAST –At the pilot facilities from 6/16 to 7/13, 12.6% of all appointments resulted in a no show –The mailer with the highest number of No Show appointments at a given pilot facility had 11 out of the 89 total No Show appointments for that facility. –Nationally from 6/16 to 7/13, 22.1% of all appointments resulted in a no show 2.Unscheduled Arrivals with valid Scheduler IDs in FAST –At the pilot facilities from 6/16 to 7/13, 6.1% of all arrivals were unscheduled –The mailer with the highest number of Unscheduled Arrivals at a given pilot facility had 12 out of the 112 total Unscheduled Arrivals for that facility. –Nationally from 6/16 to 7/13, 2.9% of all arrivals were unscheduled 3.Cancelled Appointments in FAST –At the pilot facilities from 6/16 to 7/13, 4.7% of all appointments were cancelled –The mailer with the highest number of Canceled appointments at a given pilot facility had 16 out of the 61 total Canceled appointments for that facility. –Nationally from 6/16 to 7/13, 4.6% of all appointments were cancelled 4.Recurring Appointments in FAST –At the pilot facilities from 6/16 to 7/13, 6.2% of all recurring appointments were No Shows –The mailer with the highest number of late arrivals for recurring appointments at a given pilot facility had 23 out of the 48 total late arrivals for recurring appointments for that facility. –Nationally from 6/16 to 7/13 recurring appointments represented 22.1% of all No Shows

MTAC #87 5 Mailer Rating Pilot - Mailer Questions/Issues Questions/Issues raised by mailers have included: Early arrivals and impact on rating Multi-stop appointments and impact on rating when USPS delays occur USPS requirement for appointment IDs on PS Form Drivers will need to contact dispatch/scheduler to obtain an Appointment ID. If an Appointment ID is unobtainable, then the Scheduler ID must be provided Manual entry of appointment number on PS Form 8125 is not considered as altering the PS Form 8125 Acquiring return receipt of signed PS Form If mailers provide 2 copies of PS Form 8125, USPS will return a signed copy to the driver Discrepancy between FAST Closeout Data vs. the signed PS Form 8125  Please contact facility to address the issue within 120 hours of appointment date/time. If no response is returned from the facility within 1 business day, please contact Prat Shah from Operations

MTAC #87 6 Surface Visibility Scan Utilization Average Pilot Facility SV Drop Shipment Utilization

MTAC #87 7 Current Functionality  Four or less slots will be allocated to tiers automatically –1 slot per hour (Tier 4) –2 slots per hour (Tiers 4, 3) –3 slots per hour (Tiers 4, 3, 2) –4 slots per hour (Tier 4, 3, 2, 1)  Five or more slots will be distributed based on tier percentage  Partial Slots are not allocated. Tier 4 receives all slots that are not allocated to a specific tier Tier Percentage and Slot Allocation – Current Functionality

MTAC #87 8 Tier Percentage and Slot Allocation - Proposed Functionality Proposed Functionality  Slot allocation will always award the first slot to tier 4  Remaining slots distributed based on tier percentage and the “trickle down” effect starting with Tier 1  Additionally, if the distribution equals 0.6 of a full slot or greater, a full slot will be allocated to tiers 1, 2 and 3  The remaining slots will be assigned to tier 4 if not utilized in other tiers  Partial Slots will carry over to the next available tier: –If distribution < 0.6 –If a fractional slots remain after allocation (e.g. 0.2 slots will be carried to tier 2 if 1.2 slots are allocated to a tier 1 based on tier percentage)

MTAC #87 9 ANY FACILITY (ABC) Example - Slot Allocation Conversion Percentage of Total Appointments Scheduled for Each Tier Number of Pallet Slots per Hour Current Functionality - 4 Slots At 8 PM (See Below) Proposed Functionality – 4 Slots At 8 PM (See Below) TIER 130%1 slot TIER 215%1 slot0 slot TIER 315%1 slot TIER 440%1 slot2 slots  Current functionality with 4 Pallet Appointments at 8 PM  Four or less tiers are distributed without regard to tier percentages  Tier 1: 1 slot allocated  Tier 2: 1 slot allocated  Tier 3: 1 slot allocated  Tier 4: 1 slot allocated  Proposed functionality with 4 Pallet Appointments at 8 PM  First Slot awarded to Tier 4 with 3 Slots Calculated by Tier Percentage  Tier 1: 3 X.30 =.90 (1 slot rounded up)  Tier 2: 3 X.15 =.45 (0 slot rounded down)  Tier 3: (3 X.15)+.45 =.90 (1 slot rounded up)  Tier 4: (3 X.40) = 1.20 (1 slot awarded + 1 slot remaining = 2 slots)

MTAC #87 10 ANY FACILITY (ABC) Example - Slot Allocation Conversion Percentage of Total Appointments Scheduled for Each Tier Number of Pallet Slots per Hour Current Functionality - 6 Slots At 8 PM (See Below) Proposed Functionality – 6 Slots At 8 PM (See Below) TIER 130%1 slot TIER 215%0 slot1 slot TIER 315%0 slot1 slot TIER 440%5 slots3 slots  Current functionality with 6 Pallet Appointments at 8 PM  Tier 1: 6 X.30 = 1.8 (1 slot rounded down)  Tier 2: 6 X.15 = 0.9 (0 slot rounded down)  Tier 3: 6 X.15 = 0.9 (0 slot rounded down)  Tier 4: 6 X.40 = 2.4 (5 slots remaining)  Proposed functionality with 6 Pallet Appointments at 8 PM  First Slot awarded to Tier 4 with 5 Slots Calculated by Tier Percentage  Tier 1: 5 X.30 = 1.5 (1 slot rounded down)  Tier 2: (5 X.15)+.50 = 1.25 (1 slot rounded down)  Tier 3: (5 X.15)+.25 = 1.00 (1 slot rounded down)  Tier 4: (5 X.40) = 2.00 (1 slot awarded + 2 slots remaining = 3 slots)

MTAC #87 11 National Deployment Mailer Rating National Deployment will be based on a phased approach by area  Deployment will include FAST SV enabled sites with 80% SV drop ship compliance or better  Deployment Approach based on mailer/facility performance by area  Deployment will span 3 months beginning August 18 (immediately following pilot) Mailer Rating National Deployment will continue communicating to mailers and facilities Deployment team will continue teleconferences with mailers and facilities to help familiarize rating rules and review weekly metrics Mailers should look at FAST rating reports to determine if operational changes need to be made to improve their rating score for each drop shipment facility Mailer Rating National Deployment Plan  Phase I: 1 Area; Western  Phase II: 3 Areas; Great Lakes, Southwest, Eastern  Phase III: 5 Areas; NY Metro, Capital Metro, Pacific, Northeast, Southeast

MTAC #87 12 National Deployment- Fall Mailing Season Mailers expressed concern about national deployment during fall mailing season Mailers agreed based on:  Review of pilot data for accuracy  SV sites at 80% compliance or higher only  Willingness to closely monitor facilities  Ability to "turn-off" a facility if problematic  Agreement to "take action" if impacting the fall mailing season

MTAC #87 13 Mailer Rating Timeline Mailer Rating Pilot JulyOctAugSeptJuneMay Nov Communication Preparation Execution 6/22/2007 National Deployment* Phase I - Western Phase II - Great Lakes, Southwest, Eastern Phase III - NY Metro, Capital Metro, Pacific, Northeast, Southeast Dec 08/18/200709/15/200710/20/2007

MTAC #87 14 Next Steps Complete Mailer Rating Pilot Continue communicating National Deployment schedule to mailers and facilities Begin National Deployment Phase I Review National Deployment status at next MTAC 87 meeting