1. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 1 FLAT MAIL PREPARATION OPTIMIZATION Issue #81 MTAC February 24, 2005

2. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 2 Recently Completed Initiatives n Full merging of UFSM 1000 flats n CR and 5D combined on all 5D and L001 pallets according to new standards in M045 n Reallocation of Firm bundles n 5D FIRM bundles no longer contribute to 5% limit for merging n Three-digit bundle scheme for flats (L008) n Non-sacked Periodicals now eligible to be entered at DDUs

3. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 3 Recently Completed Initiatives n New Labeling List L009 n Consolidates origin processing of MXD/residual flat volumes from approximately 100 ADCs down to 32 processing locations n No preparation changes other than the labeling for Mixed ADC bundles (modified OEL destinations) and Mixed ADC sacks n Effective early February, required use by May 15, 2005

4. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 4 Major Initiative - APPS – Address Visibility / Readability n Federal Register Notice n Label on top piece must be visible n Banding – if cannot be positioned away from address block, clear strapping must be used n Shrinkwrap – haze recommendation (70%), with no seams or other obstructions over the address block n Position – address cannot be on the smallest side of the bundle n Optional bundle label can be used n Gathering input from the industry in order to shape the ultimate requirements

5. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 5 Near-Term Initiatives n Reductions in Sacks n Eliminate shrink-wrap requirement for bundles on BMC pallets n Allow non-Sacked STD ECR to be entered at DDUs n Mixed/residual bundles placed on ADC and SCF pallets prepared for one of the 32 locations

6. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 6 Near-Term Initiatives n Reductions in Sacks n ADC pallet protection n Lower required and optional minimum weights for last pallet level, for example, required at 250 lbs, optional at 100 lbs if dropshipped.

7. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 7 Longer Term Sack Reduction Initiative n Allow flats to be entered at destinating plants outside of sacks n Bedloaded bundles n Tubs n Reintroduction of the Mixed/Residual Pallet n Would significantly reduce sacks n Pallets would be labeled to the 32 mixed processing locations, most equipped with APPS

8. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 8 Future Initiative – Combined Preparation of Mixed Classes n Options → Co-Palletization and Co-Mailing n Working with interested parties within the industry to model the impacts of co-mailing n The industry interest is primarily with the co- mail option based on the potential workshare incentives n The results of the modeling, anticipated by the next MTAC, will be used to gauge interest in a test with live mail.

9. FLAT MAIL PREPARATION OPTIMIZATION February 24, 2005 9 Questions??