1. Addressing, Automation & Presort Lloyd M. Moss Senior Product Manager Pitney Bowes Group 1 Software

2. Agenda  Overview of how Addressing, Automation and Presort earn postal discounts  Addressing Requirements: present and future  Automation & Presorting Fundamentals

3. Overview  You must meet USPS addressing requirements and print Postnet (until May 2009) or Intelligent Mail Barcodes to qualify for automation discounts.  You must sort mail that meets USPS addressing requirements according to USPS rules to earn presort and automation postal discounts

4. Addressing Requirements  Defined in the Domestic Mail Manual, USPS publication 28 and in CASS™ regulations  In the event of conflicting information, the DMM takes precedence  An address must be complete and accurate for mail to be delivered in the shortest amount of time at the lowest cost to the USPS

5. Addressing Requirements  Move Update Requirements must also be met as described in Pub 363  Requirement has been in effect for First Class Mailers since 1996. Periodical Mailers have also been covered.  Starting 11/23/2008, Standard mailers will need to comply as well or pay First Class non-automation and single piece rates.

6. Address Elements  Primary Address (Street Address)  Secondary Address (Apt No, Suite No, PO Box)  City  State – must use specific abbreviations  ZIP Code (Zone Improvement Program)  ZIP+4  Delivery Point  Carrier Route (not printed on mail piece)

7. 1 1 0 3 2 0 0 0 1 1 1 0 3 0 3 9  5 Digit ZIP Code identifies the post office/station (Washington, DC)  ZIP+4 is a 4 digit code that identifies the block face  Delivery Point - 2 digit code to make 11 digit barcode unique  Check Digit – 12 th digit to ensure proper decoding of barcode Delivery Point ZIP Code

8. Postal Barcodes  Must be printed on mail piece to qualify for automation discounts  Two types of barcodes can currently be used for letters and flats  Postnet (5,9,11 Digit ZIP + check digit)  Intelligent Mail Barcode (for flats as of 5/1)  5,9,11 Digit barcode+other information to identify mailer, unique piece and services provided (more on this in next session) – likely to be mandated in 2009

9. Carrier Route (CRRT) Used for Enhanced Carrier RT Preparation  4 character code that identifies the mail carrier or route. 3 digits preceded by one of the following alphabetic codes: CUrban BPO Box RRural Route HHighway Contractor GGeneral Delivery Example: C015

10. Enhanced Line of Travel (eLOT)  5 character code that identifies how the carrier route and how it is delivered.  Includes the 4 digit Carrier Route followed by one of the following alphabetic codes: AAscending DDescending Example: 0015A

11. Main St Washington DC 20001 202204206 C015 C016 1101 1102 203 MAIN ST WASHINGTON DC 20001-1101 201203205 0015A DPBC: 200011101031 CRRT: C015 eLOT: 0015A ADDRESS EXAMPLE:

12. Useful Acronyms and Terms  DPV™Delivery Point Validation »Separate database that contains all delivery points  VacantIndicates that an address is undeliverable because it Tableis vacant.  EWSEarly Warning System »File that contains addresses that have not been added to the USPS address database  LACS Link™ Locatable Address Conversion System »Separate database that contains 911 converted addresses, USPS converted street addresses, and renumbered PO Boxes

13. CASS™  Coding Accuracy Support System  Measures the accuracy of address matching software such as CODE-1 Plus  CASS™ process creates USPS Form 3553  CASS™ software will “standardize” an address, lookup a ZIP+4, carrier route, “delivery point”, and eLOT number.  Successful ZIP+4 lookup required to qualify for automation discounts

14. CASS™ is First Step to Get Discounts  Presort is the other step required to get discounts To qualify for:You must verify: You must use:By this Date: Presorted rates5 Digit ZIP Code 12 months of mailing Automation rates Complete addresses ZIP+4 w/ Delivery Point 180 days of mailing Enhanced carrier route rates Carrier route information ZIP Code CRRT eLOT (for presort) 90 days of mailing

15. CASS™ Cycle L (Implemented 8/1/07)  Required primary address (street numbers) to be validate using DPV file to qualify for automation discounts  Requires LACS Link™ to be used to get ZIP Code  If LACS address not printed on mail piece, mailer will lose automation discount after a year

16. CASS™ Cycle M (8/1/09)  Requires DPV validation of high rise apartment numbers to pass secondary address validation, but this validation will still not be required to qualify for automation discounts.  Suite Link™ required for vendors, still optional for mailers except Full Service NCOA Link™ providers.  Preferred Street Alias must be used in output

17. Future Requirements?  CASS™ required in 7/2009 to earn any postal discounts (proposed in Fed. Register)  Must use Standardized Address on mail piece  Secondary Address Validation with DPV to qualify for Automation rates?  DPV failures pay Single Piece Rate, not Presort Rate?  Performance based discounting rather than required process. 2011?

18. Move Update Requirement  Currently in effect for First Class  Will be expanded to Standard Class in early 2009  Requires COA identification  Requires updating mailing list data within 185 days with new address

19. Change of Address Identification Methods  NCOA Link™ - pre-mailing  ACS™ - post-mailing  FastForward™ - post-mailing  Ancillary Endorsment  Alternative Method described in detail in USPS publication 363  Merlin® will provide compliance visibility in 2008 and IMB in 2009

20. Automation & Presort  The point of worksharing discounts for addressing and presort is to allow the USPS to reduce the amount of work they need to do in order to process mail  This requires mailers to prepare mail so it can be processed further “upstream”  The USPS sorting process relies on scanning barcodes. Mail with barcodes already on it can be more easily sorted than if the USPS has to spray the barcode on themselves.  Presorting allows the mailer to separate and containerize mail so it can be processed as far upstream as possible. The further upstream, the bigger the worksharing discount.

21. Presorting  Process by which the mailer prepares mail so it is sorted, bundled and containerized based on postal regulations in DMM  Allows mailers to do some of the work otherwise done by the USPS and enjoy some cost savings  Presort Software is certified by PAVE™ Presort Accuracy and Validation Evaluation

22. Presorting (continued)  Presort considerations  Piece attributes  Dimensions & processing category  Weight  Contents  Identical or Non-identical  Size of the mailing (number of pieces)  Geographic concentration of mailing

23. What Does Presort Software Do?  Sorts mail for maximum postal discounts  Defines bundles and containers (sacks, trays and pallets)  Creates sack, tray and pallet labels  Creates reports that USPS requires for acceptance, verification and acceptance  Can create Mail.dat™ files for other applications

24.  Consolidated like small jobs into larger jobs prior to presorting and production. This increases ZIP Code density.  Standard, Periodical and Package Services mailers need to more aggressively take advantage of drop ship discounts.  Mail that is not at least earning at least a 3 Digit automation discount could be handed to a presort service bureau for commingling.  Increase automation discounts by improving address hygiene. Mailers that Use Presort Software Can Increase Postal Discounts