1. USPS Mailer Technology Study MTAC February 5, 2004 Jeffrey Freeman Manager, Mail Technology Strategy Intelligent Mail and Address Quality

2. 2 USPS Mailer Technology Study | February 5, 2004 Agenda  Purpose of Technology Study  Study Overview  Findings  Closing

3. 3 USPS Mailer Technology Study | February 5, 2004 Purpose of Technology Study  To understand the mailing industry’s potential to print advanced barcodes  Identify industry trends that increase likelihood of adoption

4. 4 USPS Mailer Technology Study | February 5, 2004 Study Approach  Mailer site visits  Vendor interviews  Mail preparer survey

5. 5 USPS Mailer Technology Study | February 5, 2004 Survey Overview  Target audience –Commercial and non-profit mail preparers  Questionnaire –Covered demographics, key technology, information management, industry trends, benefits and challenges  Interviews –Over 5,000 candidates screened; Over 300 interviews completed

6. 6 USPS Mailer Technology Study | February 5, 2004 Respondent Demographics  311 mail preparers participated  Account Types represented fairly evenly  Twelve industry segments represented

7. 7 USPS Mailer Technology Study | February 5, 2004 Respondent Demographics  All three shapes represented: letters, flats, and parcels  Letter mail predominant shape  85% of respondents report that they prepare two or more shapes

8. 8 USPS Mailer Technology Study | February 5, 2004 Findings – Perceived Benefits  83% of respondents identified one or more benefits in adopting an advanced barcode –Customer demand for track and trace and customer relationship management are the top two benefits at 68% and 58% –35% identified inventory/job management as a potential benefit

9. 9 USPS Mailer Technology Study | February 5, 2004 Findings – Potential Demand  54% of all locations already uniquely identify mailpieces and/or unit loads  42% of high volume locations use barcodes for production control/sortation –Top three uses: sortation, job tracking and customized insertion  Preparers are experimenting with advanced barcodes

10. 10 USPS Mailer Technology Study | February 5, 2004 Findings – Technology Factors  Major technology factors to consider –Printer type –Printing resolution –Barcode readers

11. 11 USPS Mailer Technology Study | February 5, 2004 Findings – Technology  The ability to print complex barcodes is dependent on technology and resolution  63% of locations print most barcodes and addresses at resolution of 300 dpi and higher Technology and Resolution at Preparer Locations

12. 12 USPS Mailer Technology Study | February 5, 2004 Findings – Technology  Use of inkjet printers –59% of locations use inkjet printers for the majority of their mail Note: Six percent of respondents did not report a dominant printer type.

13. 13 USPS Mailer Technology Study | February 5, 2004 Findings – Technology  Use of continuous forms printers –25% of high volume locations use continuous forms printers on the majority of mail  Use of POSTNET –High volume mail locations print POSTNET codes on the majority of letters (96%) and flats (79%) –The current resolution for printing the POSTNET code could already support the printing of some advanced barcodes

14. 14 USPS Mailer Technology Study | February 5, 2004 Findings – Technology  Barcode readers –26% of locations use barcodes for production control and/or sortation; 59% of these locations use USPS barcodes for this purpose –Mail preparers are twice as likely to use laser scanners than imagers to read barcodes *

15. 15 USPS Mailer Technology Study | February 5, 2004 Findings – Technology  Replacement patterns –Half of respondents are replacing the majority of their hardware & associated software over the next 5 years –38% will be replacing the majority of their readers in this same timeframe

16. 16 USPS Mailer Technology Study | February 5, 2004 Findings – Other Factors  Tradeoff in print resolution with production speed  Process changes  Interaction of ink with paper

17. 17 USPS Mailer Technology Study | February 5, 2004 Closing  There is a demand and interest in uniquely identifying mail pieces and unit loads  Technology is available today to print advanced barcodes  Further examination of the Study’s findings and additional research is necessary