® Service Standards and Performance Measurement MTAC Workgroup 114 Status Report

Workgroup Objective For Market Dominant Products, Provide Industry Input/Recommendations for USPS Regarding Service Standards Service Performance Measurement By September 20, 2007 July 2007 for Service Standards Sept 2007 for Service Measurement

Main Workgroup (177 participants including PRC and GAO) 4 Subgroups: First-Class Mail (includes FCM parcels) Periodicals Standard Mail (letters and flats, BPM flats) Packages (Single piece Parcel Post, BPM, Library, Media, and Standard Mail parcels) Workgroup (Formed in February)

Subgroup Progress to Date First-Class Mail Tentative agreement that existing standards meet business needs Recommendation will include Two service performance indicators “% On Time” “Tail of the mail” Need for review / update of service standards between continental US and non-continental US locations Reviewing some specific groups within FCM: Remittance Mail Forwarded Mail Smaller FCM Mailers Surveyed by USPS

Subgroup Progress to Date Periodicals Tentative agreement that existing standards meet business needs Recommendation will include Concerns regarding how changes in CETs could affect service (now and FSS) Need for realistic service standards between continental US and non-continental US locations Discussion of measurement started, evaluating Red Tag as interim service performance indicator until Intelligent Mail measurement is viable for Periodicals

Subgroup Progress to Date Standard Mail Tentative agreement that includes: A matrix for destination-entered Mail (est. 75% of volume) with a range of delivery days based upon entry facility type (DBMC, DSCF, DDU) and presort (carrier route vs. non-carrier route) A range of days for origin-entered (est. 25% of volume) based upon existing standards Seasonality (additional delivery day Sept through December) Recommendation will also include Agreement that service standards between continental US and non-continental US locations should be extended, unsure what is appropriate That this service standard should also apply to BPM flats

Subgroup Progress to Date Package Services Mail Tentative agreement that includes: One standard for destination-entered Commercial Packages (Parcel Post, BPM packages, Library and Media Mail and Standard Packages) A destination-entry matrix of 2 to 4 days based upon entry point (DBMC, DSCF, DDU) and Current origin-entry standards based upon zones Two service performance indicators “% On Time” “Tail of the mail” Workgroup is proposing A different service standard for destination- entered Standard packages vs. Standard letters/flats Retail Parcel Post – USPS surveyed retail customers

Other Service Standards Tasks Workgroup will recommend an ongoing service standard review/update process that is driven by business rules, demonstrated performance, and includes industry input Enhancements to USPS communication of service standards and accessibility of the information to mailers Subgroups will recommend service standards and measurement for some Special Services Workgroup Progress to Date

Service Performance Measurement The Measurement work in process… Workgroup supports an Intelligent Mail performance measurement system Examining ‘Start the Clock’ and ‘Stop the Clock’ procedures Analyzing mail types and mailflows for measurement gaps and alternatives Industry recognizes that mail with quality issues should not be included in Performance Measurement scores but wants all data captured and used for service and system improvement Reporting needs: Want comparative data to be able to evaluate mailing processes Want data that adds value to mail strategies and enhances use of mail Measurement & Reporting work will need continuing coordination

Workgroup Progress to Date Open Issue: Service Standards Review USPS service standards review effort was recommended by the workgroup Business rules documented and verified as appropriate Transportation analysis using more sophisticated tools & technology Mail flows and distribution process validated with PLANET Codes Will not be complete until the end of August Review process may be the recommended approach for on-going reviews of service standards

Integration with Internal USPS Preparations Five Project Teams Established Senior Officer Sponsorship for each Service Standards Special Services Measurement Requirements Intelligent Mail Outreach Ongoing Review by Steering Committee

Ongoing Monthly Meetings Requirements of New Law USPS Program Plan Consultation Process Current Service Standards Service Standard Review Measurement Process Reporting USPS - PRC Meetings

Next Steps September 2007 – USPS/PRC Consultation October 2007 – Publish Proposed Rule on Service Standards in Federal Register for comments (30 days) December 2007 – Publish a Final Rule on Service Standards in Federal Register Service Standard and Measurement Timeline