1. Service Performance Measurement using Intelligent Mail & Seamless Acceptance

2. Service Performance Measurement: The Approach Prepare Mail with Unique Barcodes Mailer provides Electronic Mailing Information Use container, handling unit, and mailpiece scans of unique barcodes to verify induction, predict delivery Determine accurate Start-the-Clock Determine accurate Stop-the-Clock Calculate service performance –By facility –By Origin-Destination (OD) pairs –By individual transportation components between OD pairs –By tray preparation (pre-sort) levels –By customer –By class

3. Data Quality & Statistics Statistics Ensure manifest accuracy by –Comparing container/handling unit manifest data to mailpiece manifest –Comparing actual scans (container, handling unit, and mailpiece) to manifest Ensure “Start-the-Clock” accuracy by –Comparing & correlating PostalOne! TMS, Container, first USPS tray, and first origin processed piece scans –Requiring origin processed piece scans at the expected induction facility Ensure quality mail preparation by –Measuring mailing scan rate to ensure barcode quality –Measuring pre-sort and address quality errors Scans from mailers that do not have high quality manifest information will be excluded from service performance measurement.

4. Service Performance: A collaborative effort Mailers apply unique Intelligent Mail® barcodes to individual mailpieces Mailers apply the unique Intelligent Tray Barcode to the handling units (i.e. trays) they prepare Mailers apply unique barcodes to containers (i.e. pallets) Intelligent Mail ® barcode Enhanced Service Performance Measurement relies on recently developed unique barcodes. Intelligent Container Barcode Intelligent Tray barcode 10/24

5. Service Performance: USPS Scan Status Letter Sorting Equipment enabled for reading Intelligent Mail Barcode Flat Sorting Equipment enabled for reading Intelligent Mail barcode Tray Handling System upgrades to read Intelligent Tray label Surface Visibility for reading Container Barcodes

6. Existing Service Performance Systems Confirm –Scan data is collected from processing equipment for 4CB and Planet Code pieces EXFC –Measures single piece First Class letter service performance –Measures time from drop in collection box to receipt by customer Several different systems are in place to provide service performance information

7. Service Performance: A collaborative effort Electronic Manifest information via Mail.dat or Web Services provides details of the mailing –Container, Handling Unit (EDL) and Mailpiece, barcode detail –Mailpiece to Handling Unit (EDL) mapping –Handling Unit (EDL) to Container mapping –Presort –Drop Location ADIS For Piece Level Information Mailers provide electronic documentation of the unique barcodes applied to the containers, handling units, and pieces in their mailings.

8. Manifest Quality Mail.dat files are submitted to PostalOne! Piece manifest records are associated with specific tray manifest records (nesting) and compared for accuracy Scans are compared to the mailer provided manifest to verify –bbPiece Count –Preparation/Presort Quality –Barcode Quality –Address Quality Scans from poorly manifested mailings are excluded from Service Performance Measurement Seamless Acceptance verifies the quality of the prepared manifest

9. Start-the-Clock Induction scans for containers serve to Start-the-Clock for all mailpieces contained in the electronic documentation for a mailing. Tray and initial mailpiece scans may serve as alternate Start-the-Clock options. Container induction scans at the originating facility Mailer Facility Originating Facility First mailpiece scan from a tray processed at the originating facility PostalOne! TMS scans identify trays ready for induction Air or Surface Transportation scans of Trays and Containers

10. Stop-the-Clock Container scans as they are unloaded at delivery units can service as primary Stop-the-Clock event. Mailpiece and tray scans can supplement the container scans. Container unload scans at the delivery unit Bundle Scans at DUs Destination Facility Delivery Unit Delivery Point Sequencing Trays are scanned as they are loaded onto containers for final delivery Final piece scan before delivery

11. En-route Scans Container Scans –Scanned as containers are inducted at USPS facilities –Scanned as mailer prepared containers are transported between USPS facilities Tray Scans –Scanned by tray handling systems as mailer prepared handling units enter a facility –Scanned as mailer prepared handling units are transported through the USPS network –Scanned as mailer prepared handling units are associated to containers Intelligent Mail® barcode –Scanned as mailpieces are processed on USPS equipment

12.  Comprehensive service performance » By plant » By class » By customer » By pre-sort level  Point-to-Point diagnostics Barcoding & Addressing 6060 PRIMACY PKWY STE 201 MEMPHIS TN 38188 Address Change Service John Doe 6449 AMBERVIEW CV MEMPHIS TN 38141 - 8346 Transportation Integrated Approach Mail Processing & Delivery Mail Processing & Delivery Acceptance Service Performance

13. Measuring Service Performance Mailing A Mixed AADC 3-Digit 5-Digit “Start-the-clock” 1 st scan “Stop-the-clock” Enhanced Service Performance Measurement uses container, handling unit and mailpiece scans along with mailer data to provide detailed performance insight. Mailer Facility Originating Facility Destination Facility Tray Types

14. Pilot Status First class letters from pilot mailers Measuring end-to-end service performance at the piece level and reporting by –Tray preparation level (e.g. 3-Digit or AADC) –Transportation type (e.g. air or ground) –Origin/Destination pairs Utilize data filtering to capture high-quality information –Excluding pieces from poorly manifested or prepared mailings –Using manifest date and scans of origin processed pieces to “start- the-clock” for the mailing –Using only delivery point sequence scans to “stop-the-clock”

15. What can we measure? –Service Levels for each preparation category (presort) » Filtered by OD pair, presort level, mailer, mailing, seasonality » Service levels by customer » Service level by discrete USPS network components –Velocity through the transportation network and service performance factors: » Impact of specific modes of transportation (e.g. commercial air, surface) » Network service performance » Likelihood of late arrivals » Delivery window analysis –Velocity through facilities Service Performance Measurement What we are analyzing Example: ZIP Analysis by Service Standard Example: Tray Type Analysis by Service Standard Example: Six Sigma Quality Analysis

16. Pilot Next Steps Improve “Start-the-Clock” Improve “Stop-the-Clock” Data Integration Pilot Expansion –Include Flats, Standard and Periodicals Mail –Bundle Scans at Delivery Units Establish Tolerances Validate Service Performance Model

17. Upcoming Intelligent Mail Systems CLDS –Allows mailer to order tray labels with Intelligent Tray Barcode from USPS Surface Visibility –Continued expansion of Surface Visibility system into new facilities and further into facilities Seamless Acceptance –Verify manifest quality and determine postage assessments Upgrades to Tray Handling Systems to read 24-digit barcodes PARS Several new systems are being developed that rely on Intelligent Mail barcodes to provide new insight into mail

18. Timeline Use Tray Scans in Service Performance Analysis: Qtr 3 07 Use Container Scans in Service Performance Analysis: Qtr3 3 07 Expansion of Intelligent Mail® Barcode to Flats: Q3 FY07 PARS Deployment: October 2007 IMB Read Deployment Completion: Complete Surface Visibility DU: FY08 24 Digit Tray Label: FY08/09 IMB Mandate: FY 09 Seamless Acceptance: FY09 Incremental improvements are required from USPS and mailers before intelligent mail can be used to drive service performance