1. MTAC WG 114 MTAC Workgroup 114 Establish Service Standards and Measurement Update – May 16, 2007

2. MTAC WG 114 Main Workgroup 4 Subgroups: –First-Class Mail (includes FCM parcels) –Periodicals –Standard Mail (letters and flats, BPM flats) –Packages (Single piece Parcel Post, Bound Printed Matter parcels, Library Mail, Media Mail, Standard Mail parcels) Workgroup Structure

3. MTAC WG 114 Workgroup formed Feb 2007 Meetings held to date – 14 total –Full workgroup = 2 –FCM subgroup = 2 –Periodicals subgroup = 3 –Standard Mail subgroup = 3 –Packages subgroup = 4 Overview

4. MTAC WG 114 Main Workgroup –Jeffery Lewis, USPS Manager Pricing & Policy (202-268-4757, jeffery.w.lewis@usps.gov) –Kathy Siviter, President, PCSi (PostCom) (703-237-1740, kathys@postalconsulting.com) Workgroup Co-Chairs

5. MTAC WG 114 First-Class Mail (includes FCM parcels) –Chris Oronzio, Manager, Processing Center Operations, USPS (phone, chris.r.oronzio@usps.gov) –Jody Berenblatt, Senior VP, Postal Strategy, Bank of America (646-366-4425, jody.berenblatt@ bankofamerica.com) Periodicals –Jo Ann Miller, Mgr., Integration & Support, Global Business, USPS (202-268-3869, joann.m.miller@ usps.gov) –Dennis Farley, Senior Manager Distribution, ESPN The Magazine (212-515-1240, Dennis.Farley@espn3.com) Subgroup Co-Chairs

6. MTAC WG 114 Standard Mail (letters and flats, BPM flats) –Tom Foti, Manager, Integration and Planning, Product Development, USPS (202-268-7707, thomas.j.foti@usps.gov) –Kimberly Ryan, Director of Marketing Services, L. L. Bean (207-552-2512, kryan@llbean.com) –Wanda Senne, National Director of Postal Development, World Marketing (770-431-2591, wsenne@worldmarkinc.com) Subgroup Co-Chairs

7. MTAC WG 114 Packages (Single piece Parcel Post, Bound Printed Matter parcels, Library Mail, Media Mail, Standard Mail parcels) –John Gullo, Manager, Product Development, Package Service, USPS (202-268-8057, john.f.gullo@usps.gov) –Pete Grottini, Director, Postal Affairs, Bookspan/YES Solutions (717-795-1216, peter.grottini@ YESSolutions.com) Subgroup Co-Chairs

8. MTAC WG 114 Full workgroup participants = 177 –First-Class Mail subgroup = 41 (11 USPS, 5 PRC, 1 GAO, 24 industry) –Periodicals subgroup = 42 (10 USPS, 5 PRC, 1 GAO, 26 industry) –Standard Mail subgroup = 74 (17 USPS, 6 PRC, 1 GAO, 50 industry) –Packages subgroup = 26 (6 USPS, 5 PRC, 1 GAO, 14 industry) PRC very active participants (16 representatives) USPS and Industry commitment/support = HIGH Overview

9. MTAC WG 114 First-Class Mail –Tentative agreement that existing standards, if achieved by USPS at acceptable level, will meet business needs –Concerns about “tail of the mail” targets and measurement –Reviewing some specific groups within the FCM product: –Remittance Mail –International Mail –Forwarded Mail Subgroup Progress to Date

10. MTAC WG 114 Periodicals –Tentative agreement that existing standards, if achieved by USPS at acceptable level, will meet business needs –Subgroup has begun discussions on measurement; evaluating Red Tag as interim service performance measurement system Subgroup Progress to Date

11. MTAC WG 114 Standard Mail –Origin-Entered Mail (est. 25% of Standard Mail volume): Tentative agreement to recommend a range of delivery days based upon existing standards (850,000+ 3-digit O/D pairs), if achieved by USPS at acceptable level, will meet business needs –Drop-Ship Entered Mail (est. 75% of Standard Mail volume): Proposed matrix with a range of days, which recognizes drop ship entry facility type (DBMC, DSCF, DDU) and presort (carrier route vs. non-carrier route) –Open Issues around service standards –Seasonality (additional time during heavy fall mailing season?) Subgroup Progress to Date

12. MTAC WG 114 Packages Mail –Commercial Packages (Parcel Post, Library Mail, Media Mail): Tentative agreement that existing standards, if achieved by USPS at acceptable level, will meet businesses needs –Standard Mail Packages (parcels): Industry evaluating Packages standards vs. Standard Mail (letters/flats) standards –Retail Packages (retail Parcel Post): May be outside purview of MTAC workgroup (Consumer Advocate venue) –Return Services (Merchandise Return Service/Bulk Parcel Return Service): being assessed as special services Subgroup Progress to Date

13. MTAC WG 114 Open Issues on Service Standards (all subgroups) –ZIPs outside the contiguous United States (the existing standards may not be achievable under current USPS logistics/network environment) –Critical Entry Times (CETs) – Significant changes to CETs effectively change service standards –Forwarded Mail – Subgroups analyzing process, USPS exploring how best to recognize forwarded mail in terms of service standards/expectations –USPS Standards Review – USPS now is conducting an internal review of its existing service standards, preliminary report due to workgroup early June Subgroup Progress to Date

14. MTAC WG 114 Subgroups will be discussing setting service standards for a variety of Special Services Global workgroup recommendations on standards: –A formal, periodic review of service standards and measurement to include industry feedback (which can be triggered by significant changes such as network redesign, FSS, etc.) –Enhancements to the USPS communication of service standards and accessibility of the information to mailers Other Service Standards Tasks

15. MTAC WG 114 The work has only just begun… –Expect measurement needs to be diverse –Intelligent Mail is not a viable solution for all mail streams (What fills in the gaps? What are the costs?) –The law is not prescriptive on measurement systems and reporting requirements Service Performance Measurement

16. MTAC WG 114 Workgroup completion date: mid-Sept PRC consultation process begins: May Per the law: –Dec 2007 to establish standards for all market- dominant products –June 2008 for USPS to lay out plan to achieve standards –No set time line for putting measurement into place (PRC/USPS to determine) Time Line

17. MTAC WG 114 Questions?