MTAC Update Mailing Industry Area Focus Group Meeting February 2015

Slide 2 Postmaster General’s Mailers Technical Advisory Committee An association of associations  Representatives of the industry – not companies  Currently Over 50 Associations have an MTAC membership One Association Executive and up to Three Association Representatives per Association Approximately175 Association Executives and Representatives Focused on sharing information between the USPS and Mailing  The Postmaster General’s Mailers’ Technical Advisory Committee (MTAC) is a venue for the United States Postal Service (“Postal Service”) to share technical information with mailers, and to receive their advice and recommendations on matters concerning mail-related products and services, in order to enhance customer value and expand the use of these products and services for the mutual benefit of Mailing Industry stakeholders and the Postal Service Focus Areas – defined by PMG  First-Class Mail  Periodicals  Standard Mail  Package Services  Preparation and Entry  Visibility/Service Performance and Address Quality  Mail Piece Design and Product Development  Payment and Acceptance

Slide 3 MTAC Executive Committee Members – Updated IndustryU. S. Postal Service Christopher G. Lien -- Industry Chair ( ) BCC Software Cell: Jim Nemec -- Postal Chair Vice President, Consumer & Industry Affairs 475 L'Enfant Plaza RM 4016 Washington DC Erv Drewek-- Industry Vice Chair & Treasurer ( ) Manager of Postal Affairs Graphic Communications, a Veritiv company 5700 Darrow Road, Suite 110 Hudson, OH, Judy de Torok -- Postal Co-Vice Chair Manager, Industry Engagement & Outreach Consumer & Industry Affairs 475 L'Enfant Plaza SW RM 4437 Washington DC Phil Thompson -- Immediate Past Industry Chair ( ) Manager of Postal Operations Quad/Graphics Inc N61 W23044 Harry's Way Sussex WI Dale Kennedy -- Postal Co-Vice Chair Manager, Business Customer Support & Service 475 L'Enfant Plaza SW RM 4541 Washington DC May Frantz -- Program Manager Manager, Industry Engagement Strategy Consumer & Industry Affairs 475 L'Enfant Plaza SW Washington DC

Slide 4 MTAC Industry Leadership (2014 to 2015) Industry Leaders: Classes of MailIndustry Leaders: Focus Areas Sharon Harrison / First-Class Mail / Major Mailers Association AT&T Services Inc: VP, Postal Strategy Finance 3900 Channel Dr West Sacramento CA Angelo Anagnostopoulos / Payment / Edison Electric Institute GrayHair Software Inc: VP Postal Affairs 124 Gaither Dr Ste 160 Mt Laurel NJ John Medeiros / Package Services / Parcel Shippers Association DHL Global Mail: Director, Postal Affairs 7415 Emerald Dunes Drive. Ste 600 Orlando FL Lisa Bowes / Service Performance / Natl Alliance of Standard Mailers & Logistics Intelisent: Manager, Account Services & Postal Affairs 597 North Mountain Road Newington CT Wanda Senne / Standard Mail / Natl Assn of Advertising Distributors World Marketing:Vice President, Postal Affairs 1961 S Cobb Industrial Blvd Smyrna GA Bob Schimek / Preparation & Entry (Operations) / IDEAlliance Satori Software: Senior Director - Postal Affairs th Ave Ste Seattle WA John Stark / Periodicals / IDEAlliance Condé Nast: Executive Director of Distribution Operations 1166 Avenue of the Americas 19th Fl New York NY Steve Colella / Mailpiece Design & Product Development / Association of Marketing Service Providers (AMSP) The Calmark Group: VP- Postal Affairs 6755 S. Sayre Ave Bedford Park, IL

Slide 5 MTAC U.S. Postal Service Leadership - Updated USPS Focus Area Leaders Visibility & Service Performance Measurement Robert Cintron VP, Product Information U.S. Postal Service 475 L'Enfant Plaza SW Washington DC (202) Payment and Acceptance Pritha Mehra VP, Mail Entry & Payment Technology U.S. Postal Service 475 L'Enfant Plaza SW Washington DC (202) Product Development Gary Reblin VP, New Products and Innovation U.S. Postal Service 475 L'Enfant Plaza SW Washington DC (202) Mail Preparation & Entry / Operations Linda Malone VP, Network Operations U.S. Postal Service 475 L'Enfant Plaza SW Washington DC (202)

Slide 6 MTAC Meetings: Policy Meetings are quarterly and generally held at USPS Headquarters  MTAC members are required to attend. Substitutes are not allowed. Approved Industry experts can attend as guests  Each association is permitted a maximum of three guests per year  The Association Executive must formerly sponsor the guest  The MTAC Executive Committee must approve all guests  MTAC Leadership (Focus Area leaders, Executive Committee, and Ex Officios) may sponsor a guest. However: The guest should be an industry expert representing a part of the industry that is not currently being represented by an existing MTAC Association Becoming an MTAC Member:  Check the MTAC Roster posted on ribbs.usps.govribbs.usps.gov  Contact the Association Executive of an association to which your employer belongs and find out how the association selects their representative for MTAC

Slide 7 MTAC Meetings: Typical Format Tuesday Morning – MTAC Committee Meetings  Face-to-face meetings at USPS Headquarters for some committees Tuesday Afternoon MTAC General Session – Open  General overview of USPS finances, operations, and other areas  A 5 to 10 minute update on open workgroups, user groups, and task teams.  An evening reception typically follows the Tuesday meeting Wednesday All Day Focus Group Meetings – Closed  MTAC General Assembly (announcements; recognize new members)  75 minute discussions per Focus Group, led by USPS and industry Focus Area Leaders  MTAC Business Meeting for current MTAC industry members only Thursday Morning – Workgroup Sessions & Meetings  Face-to-face meetings at USPS Headquarters  MTAC Leadership and Executive Committee meetings

Slide 8 Meeting Schedule for 2015: Election Year February 17 – 19  PMG Megan Brennan Tuesday afternoon May 20  Meeting held at the National Postal Forum in Anaheim, CA  Special MTAC recognition and reception  Compressed schedule with all classes meeting together for each one- hour focus meeting (2:00 to 5:00)  Vice-Chair candidates announced August 11 – 13  MTAC 50 th Anniversary Celebration  Vice-chair (2016 – 2017) elections at the MTAC Business Meeting  Nominations for MTAC Leadership (2016 – 2017) are opened November 17 – 19  MTAC Leadership (2016 – 2017) elections at the MTAC Business Meeting

Slide 9 Types of Committees Group Type Intended Function Primary Sponsor / Oversight Group Participants Approval of Participants Timeframe User Group Ongoing forum for USPS & users of a particular postal product or process. MTAC Focus Area Leader (postal and/or industry) Subject Matter Experts (both USPS and industry) User Group Leaders Open - No specific end date. Annual review of issue statement in August by the MTAC EC. Work Group Address defined issues, and provide recommendations MTAC Focus Area Leader (postal and/or industry) Primarily MTAC Members and industry experts MTAC Focus Area Leader Concludes when recommendations are submitted for consideration (per the issue statement) Task Team Quickly address very specific issue to achieve results in a strict, often urgent period of time. MTAC Executive Committee (may also be delegated to Focus Area Leader if subject is specific to an Area) Specifically selected by MTAC Leadership and Executive Committee MTAC Executive Committee Concludes when task or problem resolution is completed (per the issue statement)

Slide 10 Current User Groups User Group 1 - PostalOne!, SASP, Intelligent Mail  Weekly meetings User Group 2 - eVS/Product Tracking System  Monthly meetings User Group 3 - FAST User Group  Biweekly meetings User Group 4 – Visibility (CONFIRM)  Biweekly meetings User Group 5 – Addressing  Biweekly meetings User Group 7 – MTEOR  Quarterly, with the next meeting scheduled for April 14, 2015 User Group 8 – USPS Promotions  Monthly meetings User Group 9 – Labeling Lists and Data Distribution  Biweekly meetings

Slide 11 Current Workgroups New MTAC Workgroups  Workgroup 167 – Solutions for Pieces Excluded from Service Measurement  Workgroup 168 – FSS Multi-scheme Pallets  Workgroup 169 – Refining Machinability Standards (Parcels, Flats, Letters) Two years of study for each mail piece type starting with parcels, then flats, and finally letters Workgroups Concluded in February  138 – eInduction  162 – Multiple Periodicals in a Wrapper (Polywrap)  163 – Third Party Reporting and Invoicing  164 – Informed Visibility Data Provisioning Improvements  165 – Improve MDA Support Process Workgroups scheduled to conclude by May 2015 meeting  143 – Seamless Acceptance  159 – Evaluation/Recommendation entering product at Hubs Pilot in progress; expected to conclude April 2015 Concluding April 2015  151 – Streamlined Weight and Ad Capture Process  166 – IMpb Compliance for Shipping Services File Timeliness

Slide 12 Current Task Teams Task Team 22 – MTAC 50th Anniversary Event Planning (2015)  Immediately after MTAC meetings or as needed Task Team 23 – Readiness for Trend Based Verification  Reports directly to the MTAC Executive Committee  Launched January 23, 2015  Focus will be on four key industry concerns related to essential areas such as seamless acceptance, eInduction, Move Update, and Full Service Intelligent Mail barcodes Validate Data Quality across Key Reports and Invoices Validate stability of systems via published metrics Validate data attribution methodology Transparency of thresholds used to determine compliance  Four USPS and four industry experts representing all classes of mail across the entire mail supply chain  Schedule concluding date of March 31, 2015 will be extended

Slide 13 Recent and Planned MTAC Related Webinars Mail Prep And Entry Focus Session (February 5, 2015)  For MTAC members in preparation for MTAC Focus Meetings USPS Proposed Pricing Overview (February 3, 2015) IMpb Requirements for January 2015 (January 7, 2015) Visibility on Mail in Delivery Units (January 9, 2015) Mail Entry Roadmap Webinar (December 1, 2014) Secure Destruction - A Primer for Mailers (November 13, 2014) IMpb Compliance (October 14, 2014) IMpb Impacts on Extra Services (October 2, 2014) Fall Mailing Season (August 18, 2014) Network Rationalization Phase II (August 15, 2014)

Slide 14 Topics Discussed at the February 2015 Meeting FSS sortation changes and proposed pricing impact  Unintended consequences of pricing proposal for FSS mail for HD and HD+ are prompting an immediate review by MTAC Leadership Lack of visibility that mail entered at the Hub would get DSCF discounts  Mailers need something documented that clearly shows the DSCF eligibility for mail entered at Hubs, such as updating the DMM New mailing standards for lithium batteries  Final notice posted with a March 2, 2015 required date Adhesive Tray Labels to Improve Container Scans  Considering using adhesive labels versus tag stock  Could enable automated label application and reduce costs Mail Preparation and Entry

Slide 15 Topics Discussed at the February 2015 Meeting 86% of all mail is Full Service IMb Compliant Mail Entry Roadmap updated on RIBBS  Many proposed dates have been moved out including Full Service electronic verification and Seamless now proposed for July 2015 New Move Update compliance extended  Won’t occur until the next price change  Less than 0.5% of the 5,805 eDoc submitters (75% FS IMb) are below the 0.8% threshold proposed for census-based Move Update Container Scans are Missing  USPS believes the Original Container Indicator (OCI) reported in eDoc is not getting scanned with physical containers likely due to container “jackpotting” Copalletization of smaller pallets resulting in missed OCI scans Payment and Acceptance

Slide 16 Full Service IMb by Mail Class

Slide 17 January 2015 Full-Service Compliance Scores Full-Service Verifications ThresholdNational % in Error STID -Piece2%0.17% MID - Container2%0.01% MID - Handling Unit2%0.65% MID - Piece2%0.03% Barcode Uniqueness - Container 2%1.04% Barcode Uniqueness - Handling Unit 2%0.29% Barcode Uniqueness - Piece 2%2.47% Entry Facility - Container 5%0.00% Entry Facility - Handling Unit 5%0.00% By/For - Piece5%7.84% OCI5%TBD BME/BMS contacting all mailers over a full- service threshold Working with mailers to explain full-service requirements and help understand and resolve the issues BMS working with mailers who need customized by/for threshold

Slide 18 Topics Discussed at the February 2015 Meeting Service Performance  Service delays since January 5, 2015 are being addressed and industry should see improvements soon Visibility  Looking into bundle scans using IMb as well as facing slips Addressing  Simplification of the carrier provided UAA Reason Codes MTAC Workgroup is being prepared and should be announced soon Manual Address Correction – Considering Optional  Looking into possibly making Periodical manual address corrections optional and may make this an MTAC Workgroup Addressing and Service Performance & Measurement

Slide 19 Topics Discussed at the February 2015 Meeting Reviewed Results of the 2014 Promotions Reviewed Business Rules for 2015 Promotions All stamps to be Pressure Sensitive Stamps  Water activated formats to be discontinued due to overseas procurement of the paper Certificate of Mailing Proposal  Proposal to transition away from a round-dated mailing receipt to an IMpb approach that leverages scanned data Federal Register Notice posted 2/5/2015 has an April 26, 2015 effective date. However, USPS stated an implementation date of July 26, 2015 at MTAC.  Industry (especially First-Class financial and insurance mailers) expressed significant concerns regarding this aggressive timeline  An MTAC Workgroup is being formed to quickly identify the concerns and present a proposed phased approach Product Development

Slide 20 Promotions by the numbers… 2014 Promotions Results FY 2014 Promotions (7 promotions) generated: 7.8B mailpieces $1.8B in revenue 1,487 participating customers Over $48M in discounts received by participating customers =

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Questions? Interim MTAC Update 2015 status and inquiries should be directed to: Consumer & Industry Affairs / Industry Engagement & Outreach