1 FOOTER (10PT. ARIAL, BOLD, GREY, CAPS) TITLE OF PRESENTATION (24PT. ARIAL, BOLD, ALL UPPERCASE) Subtitle (20pt. Arial, Bold, Title Case) Western Area Mailing Industry Focus Group Focus Group January 25, 2016 Western Area Mailing Industry Focus Group Focus Group January 25, 2016

2 2 Arizona Area Mailing Industry Focus Group

3 3 National Service Performance Performance Indicator Fiscal Year 2015 October 1, 2014 – September 30, 2015 NationalWestern AreaArizona FCM Composite Priority Mail Composite STD Combined (DSCF & DNDC Ltrs & Flts) Periodicals

4 4 Arizona Area Mailing Industry Focus Group

5 5 Peak Season Packages Comparison Fiscal Year 2015 vs 2016 FY 2016 = November 21, 2015 – January 7, 2016 FY 2015 = November 22, 2014 – January 8, 2016 ProductNational Western Area Arizona District First Class Parcels 9.4%2.7%2.8% Priority Mail12.31%12.1%9.2% Parcel Select33.36%28.0%26.9% Total22.41%18.4%17.2%

6 6 Peak Season Cancellations Comparison Fiscal Year 2015 vs 2016 FY 2016 = November 30 – December 30, 2015 FY 2015 = December 1 – December 31, 2014 Western AreaPhoenix P&DC Cancellations (Millions)% Change(Millions)% Change % %

7 7 Arizona Area Mailing Industry Focus Group

8 Scan Events Carrier Assignments Depart Facility Carrier Pivots & Street Assistance 8

9 Mobilize Our Managers Fully Connected Carriers Fully Connected Carriers Realize Operational Efficiencies 9

10 IV will leverage data to provide business intelligence for USPS functional groups and the mailing industry, providing:  Event-Driven Internal Measurement of all Mail  Real-Time Service Performance Diagnostics  Mail Inventory Management of Mail and Packages  Predictive Workloads on Mail and Packages  End-to-End Tracking of Mail  Ease of Use IV is an enterprise system that will be a real-time single source of all mail and mail aggregate information. 10

11 Employees “pass” mail piece under overhead camera to capture AAU scan Camera instantly captures multiple barcodes storing image Barcode data transmitted real-time to Package Database system for analysis Feedback returned to employee within <500 milliseconds with further handling instructions Low cost scanning system using standard laptop and ring scanner Barcode data transmitted real-time to Package Database system for analysis Feedback returned to employee within <500 milliseconds with further handling instructions PASS Technology DSS Technology 11

12  Deployed more than 200,000 MDDs to date  Scans packages as they move through the USPS network real- time with GPS data  Customers can track their package’s progress through the My USPS.com tracking app  Eliminates paper delivery receipts which improves efficiency 12

13 Deployment of 5 phase I machines completed 21 machines in place for PEAK 2015 Bin Expansion of 10 APPS machines Bin Expansion of 47 APBS machines Additional induction units on single induction APPS machines Development efforts underway Small Package Sorting System (SPSS) Increased Separations Supplemental Induction Units Next Generation Sorters 13

14 Replacing vehicles well-past useful life Minivans – fully deployed Mixed Delivery and Collection Vehicles – “2 tons” Extended Capacity Left-Hand Drive (LHD) Vehicles to replace minivans Service Vehicles (tow trucks and maintenance vehicles) RFI completed and RFP for multiple prototype vehicles underway In process of determining what is available and can be done Identifying best-in-class flexible technology to ensure future adaptability as innovations emerge Immediate Investment Commercial Off-the-Shelf Left Hand Drive vehicles Next Generation Vehicle Special Purpose Right Hand Drive Vehicle 14

15 We will continue:  Industry Alerts  Industry & PCC webinars and presentations PCC and Managed Account messaging from:  PCC program office  HQ Business Customer Support & Service  From Area and District BSNs BME messaging to affected customers Weekly posting of planned operational moves on RIBBS Structured release cycle for labeling list / mail directional file changes Industry and Customer Communications

16 We are Committed to Service Excellence 16 Commitment Engage Industry Stabilize OWC C OMMITMENT TO S ERVICE E XCELLENCE Use Data and Diagnostic Tools Educate and Empower Employees Drive Efficiency

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