1. ® Krista Finazzo Mgr, Operations Integration & Support May 26, 2011 FOLDED SELF-MAILERS MTAC UPDATE

2. 2  Emerging designs in marketplace  Letter-size booklets and folded self-mailers ●Estimated at 20-30% of total letters, and growing Shift from Letter Envelopes Mail Mix is Changing… Challenging for Customers & Postal Service  Creativity outpaced DMM automation letter standards ●Standards don’t account for emerging elements / designs ●Acceptance sites unsure how to rule or classify pieces ●Appeals escalated, process is time-consuming  PCSC exceptions are not the answer ●Unlevel playing field ●Can create unfair competitive advantage

3. 3 Operational Implication  Folded self-mailers do not behave like enveloped pieces ●Tend to jam in equipment ●Can become significantly damaged ●Lower processing thruput Letters automate at a rate of 10 pieces per second

4. 4 Operational Implication  Divert pieces to flat-sorter or manual operations ●Pro – reduced jam and damage rates ●Con – increased processing and delivery costs; and can lead to service impacts and loss of visibility Operations reaction to machinability problems

5. 5  Reduce confusion, discrepancy and delay of local rulings  Reduce time / cost both parties spend on the appeal process  Enable smoother transition for getting new formats into mail  Reduce diversion to manual or flat operation  Contain costs by increasing efficiency Mutual Benefit to New Standards Booklets rules were updated Sept 2009 Now what needs to happen? Revise and update the current DMM standards for Folded Self-Mailers What Do We Do? Striving for Balance! Innovation & Machinability

6. 6 Study Participants  13 mailing associations participated in study ●8 associations submitted samples for testing  Several independently submitted through BSN and PCC  Received over 200 different samples sets ●What is, or what is desired to be produced ●Sample sets included 500+ pieces ●Nearly 250k pieces tested  Mailers given opportunity to observe the tests ●50% of tests were observed by mail owner and/or preparer Industry Supplied Mailpieces

7. 7 Analysis Phase  Primary characteristics analyzed ●Dimensions ●Paper basis weight of cover ●Thickness, total weight, number of layers/panels ●Fold style / orientation ●Closure method; tabs, glue tack, glue line  Additional attributes examined ●Loose inserts secured in pocket ●Attachments - interior ●Die-cut window ●Flap type closure and orientation ●Perforations

8. 8 Length and Paper Basis Weight  Correlation of low paper basis weight with more length ●Lead edge curling, tears, jams

9. 9 Paper Cover Basis Weight  Jams, damage, poor stack quality, stacker-curl

10. 10 Flap Orientation / Style  Address side bottom; short flap on oblong ●Damage, inter-wedging and jams in stacker ●Impossible to spray barcode in clear zone

11. 11 Analysis Phase Creative Design Elements  Die-cuts & perforations are problematic without standards

12. 12 Perforated Flap – Tear Off Strip  Perforated extended cover at top ●Severe damage, jams, loss of closure integrity ●Camera/photocell blockage from loose torn pieces ●Potential loss of mailpiece contents

13. 13  Developed framework of optimal standards ●based on test data  Presented 10 category model to industry participants  Learned potential for streamlining, reducing complexity ●without limiting flexibility of options ●match terminology with industry language ●and still meet machinability needs  Reviewed items needing further clarification  Revised proposed standards model  Reviewed new model again with industry participants Development of Standards

14. 14 Where are we now?

15. 15 A folded self-mailer is formed of panels created when a single or multiple unbound sheets of paper are folded together and sealed to form a letter-size mailpiece. Folded Self-Mailer Definition

16. 16 *PROPOSED*

17. 17 Summary Proposed basic elements  Dimension ●Height: 6” max ●Length: 10.5” max  Weight: up to 3oz max (closure method based on mailpiece weight)  Paper Basis Weight: Minimum 70lb and higher ●varies based on design and total piece weight ●newsprint min 55lb; only allowed with quarter-fold design  Closure method options - varies based on design/weight ●Continuous glue line or elongated glue lines, glue spots ●Tabs: 2 or 3 non-perforated tabs

18. 18 Summary Proposed basic elements  Fold style / orientation ●Horizontal or vertical  Flap is final fold used in closure of mailpiece ●External flap final fold down from top on non-address side or from lead to trail edge ●Die-cut shape allowed with sufficient seal to panel  Panel is formed when sheet(s) of paper are folded ●Panel is final fold, bottom up to top on non-address side ●Number of host piece panels determined by design

19. 19 Summary Proposed optional creative elements  Interior attachments / loose enclosures ●Attachments secured to panel ●Enclosures in pocket or other containment method  Die-cutout window (no through holes allowed) ●Placement, size, shape and amount defined  Perforation elements: cut-to-tie vary by design ●Pull-open strip, pop-out or pop-open panels  Exterior attachments based on current DMM standards  Recommendations only, not required ●Friction, static, coating

20. 20  Top picture shows what pieces look like using current Reqts – 60lb paper with one tab at top center  Bottom shows what pieces using new Reqts look like - 70lb paper with two tabs at top edges Will Revised Standards Make a Difference? Old vs. New Standards Applied

21. 21 Next Steps Tentative Timeline :  Publish Federal Register proposal – Summer 2011  Publish Federal Register Final rule – Fall 2011 ● Implement sometime in 2012 – will be based on scheduled release cycle – possibly effective with publication of Federal Register Final rule but not required until 2012, which allows for early adoption  Conduct internal training  Issue extensive communications  DMM standards required – per 2012 scheduled release

22. 22 Questions