Secure and Environmentally-Friendly Destruction of Undeliverable as Addressed (UAA) Mail Tom Day – Chief Sustainability Officer, USPS ® Lisa West – Manager, Address Quality Programs, USPS National Postal Forum March , 2013

Agenda  Sustainability and Secure Destruction  Description and Benefits  Update of Activities  Next Steps

Sustainability and Secure Destruction

FY11 operations  billion pieces  $65.7 billion in revenue  557K career employees  33,260 K facilities  24.2 (trillion BTU) Facility energy  711 (Million GGE) Transportation Fuel  M Delivery points FY12 operations  billion pieces  $65.2 billion in revenue  528K career employees  32,604 K facilities  22.3 (trillion BTU facility energy  726 (Million GGE) Transportation Fuel  M Delivery Points The USPS ® challenge — less mail, limited capital, more addresses

Our Vision: Be A Sustainability Leader Environmentally responsible secure destruction fits well with corporate goals We are committed to be a sustainability leader by creating a culture of Conservation throughout the Postal Service ™ and leading the adoption of Sustainable business practices by engaging our employees, customers, suppliers, the mailing industry, and our federal peers. As a foundation to this vision, we strive to ensure compliance with environmental regulatory requirements in all aspects of our operations. Our call to action is to be leaner, greener, faster, smarter in support of the overall goal to deliver mail at the lowest cost with minimal impact upon the environment.

USPS ® Leadership  Facility energy -33.9% vs 2003  Greenhouse Gas -9.9% vs 2008  Water Reduction -38.1% vs 2007  Reduce Consumables -38.8% vs 2008  47% of Waste is Recycled All without tax dollars!

Undeliverable as Addressed Disposal  USPS ® UAA Recycling Policy Seek practical and cost-effective ways Foster a “zero waste” ethic within the USPS Recycle consistent with public trust obligations Comply with laws and regulations  Returned 1.48 billion pieces of RTS First-Class Mail ® Opportunity to use secure destruction to improve environmental performance, cut costs, and enhance value to customers

Secure Destruction What is it?

What is Secure Destruction?  Secure Destruction describes a potential new mail program under consideration by the Postal Service ™ that will allow mailers to opt to have mail, that would otherwise be returned-to-sender, disposed of in a secure manner.  This means that an undeliverable-as-addressed (UAA) mailpiece will be shredded by USPS ® Employees at USPS facilities, to ensure the mailpiece will be rendered unreadable prior to disposal.

Proposed Participation Requirements  Mailer must participate in Traditional ACS ™, OneCode ACS ®, or Full-Service ACS to receive notice of disposed mailpieces  Mail must bear Intelligent Mail ® barcode containing a Secure Destruction Service Type ID

Current Mail Preparation  Currently, First-Class Mail ® is eligible for disposal only when: ACS ™ participant Change Service Requested Endorsement Option 1 or Option 2 indicated in UMF (Universal Mailer File)  FY10, 46.3 million First-Class Mail waste volume

Proposed Mail Handling Procedures  Mail follows normal mail processing flow until identified as Undeliverable As Addressed (UAA)  First-Class ™ UAA letter mail is isolated when processed on Postal Automated Redirection System (PARS)

Proposed Mail Handling Procedures  Notification of treatment is sent to mailer via ACS ™ fulfillment  Sorted to special bin for verification

Electronic Notification = Two Part Process* 1.Notification of treatment is sent to mailer via ACS ™ fulfillment 2.Secure Destruction Data associated with the IMb ® (Note: Name/Address data already associated with IMb), as well as event data. The event data (i.e. facility name, date and time) from CIOSS will indicate when the letter was separated for destruction Secure Destruction Data will be provided in a second report, not linked to ACS. * Note: All Secure Destruction data will be made available on the Electronic Product Fulfillment (EPF) website; which is the secure website mailers currently use to get ACS data.

Proposed Verification Procedures  Processing clerk manually scans all mail sorted to secure disposal bin to validate proper sortation  Existing internal security measures, as is true with all mail  Until shredded, it is still mail

Secure Destruction Shred Standards  USPS ® will use industrial cross- cut shredders  NAID Max. shred size = width.75 inch x length 2.5 inches  USPS Max. shred size will be.25 inch x 1 7/8 inch  USPS will also meet international industry standards for Security Level 3 (i.e. confidential documents that should be made illegible)  Current approach exceeds NAID and equipment can be modified if standards change Excerpt from the NAID Auditing Criteria

“Mail sent back for destruction would be considered live mail and part of the mail stream. Therefore, the mailers would be at no greater risk for liability than they are when they drop outgoing mail off for delivery. The Postal Service is a trusted institution that is enshrined in the U.S. Constitution. See U.S. Const. Art. 1, s. 8, cl. 7; 39 U.S.C. s. 101 (The Postal Service is “a basic and fundamental service provided to the people by the Government of the United States, authorized by the Constitution, created by Act of Congress, and supported by the people.”). Therefore, it is difficult to imagine a scenario under which a company would be found liable for entrusting the Postal Service to deliver mail to its final destination, whether that be a mailbox or a shredder located on-site at a USPS facility. Further, the Federal Tort Claims Act (FTCA) includes a specific “postal matter” exception which excludes liability for any “claim arising out of the loss, miscarriage, or negligent transmission of letters or postal matter.” 28 U.S.C. 2680(b). This exception covers USPS employee misappropriation of this information. See C.D. of NYC, Inc. v. U.S. Postal Service, 157 Fed. Appx. 428 (2d. Cir. 2005) (USPS not liable for mail stolen by USPS employees).” Carrie M. Branson, Chief Counsel - Torts, USPS Law Department Legal Issues

After looking into this further, FISMA does not apply to the Postal Service ™. We comply with it voluntarily as a general rule. However, we are not included in the definition of “agency” in the law. The details: FISMA defines “agency” by cross-reference to the definition of “agency” in the Paperwork Reduction Act (44 USC 3502). See 44 USC 3452(a). Courts have consistently found that the Postal Service is not an “agency” under the Paperwork Reduction Act definition. See Kuzma v. USPS, 798 F.2d 29 (2nd Cir. 1986); Shane v. Buck, 658 F.Supp. 908 (D. Utah 1985), aff’d 817 F.2d 87 (10th Cir. 1987). The law clearly falls within the scope of 39 USC 410(a), which exempts the Postal Service from laws generally regulating the operation of federal agencies. Federal Information Security Act FISMA

 Conducting weekly meetings of Postal stakeholders to develop and plan Secure Destruction Service product offering  Program Management Office in place to provide detailed structure to program  Surveyed potential suppliers capable of performing Secure Destruction Service; monthly meetings / telecoms being held Progress

ActionsWhen?Where? SD Pilot Assessment7/1/13 – 9/30/137 Pilot Sites Pilot Assessment Goes Well with Decision for Full Deployment 10/30/2013USPS HQs If pilot successful, Nationwide Deployment Begins 11/1/ PARS Sites Nationwide Deployment Complete 9/30/ PARS Sites Mailers can use any of the approved Service Type IDs for Secure Destruction 10/1/2014 or soon thereafter Anywhere in US Time Table for Full Deployment

Pilot Site Locations Secure Destruction Pilot Site Location = Sacramento, CA PDC Hartford, CT PDC Nashville, TN PDC Palatine, IL PDC Las Vegas, NV PDC Merrifield, VA PDC Jacksonville, FL PDC

The Technical Side of Secure Destruction

First-Class Mail ®  First-Class Mail cannot be destroyed until it has been labeled as waste as a result of processing in PARS or CFS, and an ACS ™ record generated.  If ACS cannot be generated for a piece of First-Class Mail requesting Secure Destruction, it will be returned to sender with the new address or reason for nondelivery affixed.  ACS is a requirement for Secure Destruction.

Barcode Readability  If your barcode cannot be read and there is no printed endorsement, the mail will be treated as unendorsed.  The default treatment for unendorsed First-Class Mail ® is to be forwarded or returned with no additional postage paid and no separate address correction notice.

Printed Endorsement  The printed endorsement takes precedence over information provided in the STID. Therefore,  The printed endorsement must match the service you request. Failure to print any endorsement correctly could produce unintended results.

Printed Endorsement  If you choose to print an endorsement, there are only two acceptable for secure destruction pieces  Change Service Requested  Electronic Service Requested  Any other endorsement will interfere with the desired disposition of the mail.

27 Change Service Requested  Option 1  All UAA mail is disposed as waste, ACS ™ notice always provided.  Option 2  Forwardable pieces forwarded, non-forwardable pieces disposed as waste, ACS notice always provided.

28 Full-Service or Basic/Non-Automation?  The full-service option has extra benefits, and has specific qualification requirements.  The basic option is for automation mail that cannot or does not meet the requirements for full-service.  Non-automation does bear IM ® barcodes, and qualifies for some discounts, like carrier route and presort pricing.

29 IMb Tracing ™  IMb Tracing provides you with near real- time tracking info about your First-Class Mail ®, Periodicals, and Standard Mail ® letters and flats  It can be used on either your outgoing mail (Destination) and/or incoming reply mail (Origin)

30 ACS ™ Options  Traditional ACS – delivered via Electronic Product Fulfillment (EPF) account  OneCode ACS ® – delivered via EPF  Full-Service ACS – delivered via PostalOne! ® after the records are associated to qualified mailpieces in the eDoc

Secure Destruction Service Type IDs Class of Mail Address Correction Option Basic or Nonauto option w/o IMb Tracing ™ Basic or Nonauto option with IMb Tracing Full- Service w/o IMb Tracing Full- Service with IMb Tracing First-Class Mail ® Traditional ACS ™ – CSR1 SD Traditional ACS – CSR2 SD OneCode ACS – CSR 1 SD OneCode ACS – CSR 2 SD Full-Service ACS – CSR 1 SD Full-Service ACS – CSR 2 SD

Sunday What You Need to Know about Unique Address Types / Non-Physical Address Jim Wilson/Adam Collinson/Michael Tate – Period 1, 12 – 1 pm GSA and Addressing (Rules & Recommendations) Angela Lawson/Adam Collinson/Derrick Miliner – Period 4, 3:45 – 4:45 pm Monday Keeping it Simple: ACS Services – It’s All in the Service Type ID Lisa West – Period 5, 10:30 – 11:45 am Secure and Environmentally-Friendly Destruction of Undeliverable as Addressed (UAA) Mail Tom Day/Lisa West – Period 8, 4:30 – 5:30 pm Tuesday The ROI of Great Address Quality Ed Wanta/Dr. John M. Leininger – Period 10, 9:30 – 10:45 am Understanding the Differences in the Change of Address Programs Jim Wilson/Michael Tate – Period 13, 3:15 – 4:15 pm Your Software is Talking, Are you Listening? Angela Lawson/Chris Lien – Period 13, 3:15 – 4:15 pm Peer-To-Peer Roundtables Lisa West/Angela Lawson – Period 14, 4:30 – 6:00 pm Speaker Schedule