1. To Greater Success
Rhonda Schorr
USPS Sales Specialist

2. Agenda The Economy Market Trends Opportunities To Save
Strategies Moving Forward

3. Economic Outlook
Many Retailers Are Filing For Bankruptcy Or Having To Severely Cut Back
Unemployment Rates Continue To Go Up
Banks Freezing Credit And Inflation At High Levels Consumers Are Only Buying Necessities
Online eCommerce — Down For The First Time In Its History
2010 Economy Recovery At Best
lets go over this slide in the event some of you haven’t heard the world is hurting a little bit am I the only one noticing the line a little longer at the can and bottle deposit return machines- there as long as the motor vehicle lines
Why am I bringing this up……

4. Query Discussion Questions Investigate Dialogue Probe Ask Inquiry?
Dialogue
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Inquiry
Query
Inquiry
Discussion
Interview
Questions
Ask
Questions? Thank you very much for your time today. I’ve enjoyed meeting with you.
interview
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Dialog

5. State of Our Business: Headwinds
Strong Competitors
Package Market Declining
Economic Uncertainty
Consumer Confidence Down
We Need To Keep Working Customer Care- Bring Value To Customers
Because the bad economy affects the USPS just like everyone in this audience we’re all in this together, Our friends with the brown trucks and the purple and yellow trucks are strong competition, we need to keep working on service to stay strong

6. State of Our Business: Tailwinds
Great Business Partners
New Pricing Freedoms
Last Mile Strengths
Market Growth Is Lightweight And Residential
Economic Uncertainty:
Customers Looking For Lowest Cost Provider:
This is how we’re becoming more and more competitive, The Postal Service realizes that our competitors are good at what they do and we’ve joined forces with them Whats new For the first time- the USPS has pricing flexibility, the USPS has retail units,, the usps goes to every house in america every day
The uspss sweet spot, we go there anyway so we’re not charging you any residential surcharges Customer are looking for the lowest cost The USPS is the answer to that

7. Market Share by Service – All Products
2008 Volume Share
Market Share by Service – All Products
Volume 2008
Overnight Service
2-3 Day Service
Ground Parcel Service
Total
Pieces %
UPS
419
37%
334
16%
4,325
59%
5,180
48%
USPS 48 4%
1,355
65%
1,512
21%
3,016
28%
FedEx
505
44%
331
1,205
2,044
19%
DHL
154
13.5% 53 3% 95 1%
366
Other 19
1.5% 3
<1%
180
205 2%
Sub-Total
1,14511%
100%
2,075 20%
7,318 69%
10,538
Here are some stats that paint a picture from last year, the USPS is confident in saying our new strategies from Washington will certainly demonstrate dramatic reversal rates remember that commercial CAN YOU HEAR ME NOW HQ has finally listened to you (point to customers) and for the first time are offering VOLUME DISCOUNTS Commercial plus pricing

8. Who Controls The Market Share
Breakdown Of Package Market By Weight
Who Controls The Market Share
39%
16%
45%
5 Pounds Or Less
6 To 10 Pounds
11 To 70 Pounds
The USPS has market share on 5 lbs or less,( can everyone see this ( point to the blue) I know its hard to see our current strategy as indicated in tailwinds, by introducing flat rate products the uSPS will change the brown into blue for over 5 pound packages
3.4 Billion Pieces
1.4 Billion Pieces
3.8 Billion Pieces

9. Package Market Growth Trends By Weight
2002
2008
Growth
0-5lbs
3.1B
3.4B
13%
6-10lbs
1.3B
1.4B 8%
11-70lbs
3.6B
3.8B 6%
Total
7.9B
8.6B 9%
Trends are showing worldwide that largest % growth is in the 0 to 5 lb category why do you thing that is – yell it out- camcorders are getting smaller, tv’s are getting smaller that’s great for the USPS

10. B2C Shipments On The Rise
How many surcharges – high 50’s for small package shipping alone that’s why the USPS is spreading the word NO SURCHAGES, Has anyone heard of WYSIWYG what you see is what you get
Understand the realities of the discounts you receive
We are able to discount also

11. Market Trends B2B Is Stagnant B2C Is Growing
Packages Are Getting “Lighter”
Lightweight Shipments Going B2C Are Costly To Deliver For Our Competitors
Shipments Weighing Less Then 5 Lb - Our Sweet Spot
Lets look at this together we shoed this in the previous slides this is why everyone is switching over to us

12. USPS Has Under-1lb Pricing.
And No Net Minimums.
Competitors impose a net minimum price
Even with their discounts you’ll never pay less than the net minimum — currently $4.57.
So what does this mean for you?
USPS has first class ounce pricing so the price is based on the actual weight , this is where you’ll realize great savings over the competition, I recently saved a customer over $100,000 annually by switching to first class package rate.

13. CFA = Competitive Financial Analysis
Let me show you how I partner with your shipping department to provide you with a realistic comparison when searching for the best shipping solutions
This is what I can do for you. I’ll come out to you and I would love for you to share with me your UPS or Fedex bill then I have a proprietary program which has a formula that does an analysis and shows how I can save your company a lot of money.

14. I’ll go into a few elements of the program, Since the USPS has ounce pricing and 1 2 and 3 day service standards I can show you how first class parcel rate, as opposed to the competition starting at one pound increments,

15. CFA – USPS Priority Mail Commercial Plus vs FedEx 2 Day

16. I don’t know if you can see this but its part of the analysis I provide and it shows where the USPS rates compare with the competition.

17. Heres another part of the analysis I can provide you with if your company sends out same weight packages and I can change discounts surcharges, etc.
What I would love to do ids get a copy of your UPS or Fedex bill so I can provide you with a detailed analysi

18. What Are You Really Paying?
Competitor’s Rate Increases
Published
Actual
Commercial
Residential
YEAR
Increase
1 - 5 lbs.
2004
1.90%
1.91%
6.06%
2005
2.90%
4.71%
5.80%
2006
3.90%
4.57%
7.57%
2007
4.90%
5.50%
5.56%
2008
5.48%
5.46%
2009
5.90%
7.99%
8.23%
TOTAL
24.40%
30.16%
37.70%
AVERAGE
4.07%
5.03%
6.28%
In order to compare the true cost of shipping, it is important to understand how the market is actually pricing. This chart illustrates the “real” pricing trends in the market.
The first column reflects the “headline” increase that have been published by the competition every December. For 2009 the “headline” was: “UPS raises rates 5.9%, other carriers expected to follow.” The next two columns reflect the reality of the increase for under 5 lb shipments because of all the surcharges
Im not here to bash the competition theyre nice people they’re our friends but remember with the usps who remembers wysiwyg the shipping dept doesn’t see the bill the finance guys see the bill

19. Competitors use surcharges to mask the true cost of shipping:
Our Competitor’s Surcharges Continue To Go Up Each year
Competitors use surcharges to mask the true cost of shipping:
There are others that keep getting added, and this slide is from another presentation but an example of the increase the address correction went up to $ you know what the whole slide is saying right here The competitors use surcharges to mask the true cost of shipping- but they’re bad people Im not here to bash them
Example….$10.00

20. Surcharges Are Big Business
Look How Much is Generated With Just 3 Of These Increases
This is what’s costing you money the finance guy is paying the bill for whats going out in the shipping dept w/o them knowing what they are really paying
1 UPS pieces to/from all 50 states. Volume estimates are from market segmentation models maintained by The Colography Group.
2 UPS pieces shipped within the lower 48 states only. Volume based on preliminary estimates

21. Since 2004 our competitors have Steadily Increased Existing Surcharges and have Added New Surcharges.
Today’s # ?????????
Anybody care to throw out a number How many surcharges are there today???

22. 45

23. Delivery Area Surcharge (DAS)
DAS Is In Addition To The Residential Surcharge
“Regular” DAS Is $2.40 In Continental US
New Extended DAS $2.65 In Continental US
DAS Charge Is Also Subject To Fuel Surcharge
Over 80% Of DAS ZIPs Have Extended DAS
Over 57% Of Zips Receive DAS Or Extended DAS
This is the latest and greatest surcharge Delivery Area surcharge The guys in the brown and the purple and yellow trucks inventing surcharges because the fuel surcharge went down LOOK AT THIS 80% Is it me, it can’t just be me that’s seeing this because the gas is down their adding new ones, do they think that their customers don’t see it

24. What Do Our Competitors Consider Rural?
Does National Airport in D.C. or Malibu, CA, seem rural to you? It does to our competition.
Has anyone been in DC lately does the airport seem very rural to you, how about Malibu Cal,
Above in red: Five-digit ZIP Codes subject to competitor 2009 delivery area surcharges (DAS) for commercial and residential delivery

25. Our Clear, Up-front Pricing Makes It Easy.
“Almost 40% Of Total Shipment Costs Are Now Made Up Of Add-on Charges.”
Parcel Magazine
Our Clear, Up-front Pricing Makes It Easy.
“What You See Is What You Get” Rates
No Fuel, Residential, Or Delivery Area Surcharges
No Surprises
Look at this Parcel magazine reported that almost 40% of total shipment costs are now made up of add ons We don’t play any games With the Postal Service, the rate quoted is the rate you pay.
There are no extra fees and surcharges tacked on to the shipping cost at the end.
USPS does not charge a fuel surcharge.
All delivery addresses are treated the same. There are no higher prices for residential delivery.
Package forwarding is free.
You will never be charged for additional handling or special delivery areas.
In short, when they tell you what your package will cost, that’s what it will cost. No surprises. No fuzzy math. All this makes understanding your bill and managing your shipping expenses easy too.

26. Express Mail Priced to compete New incentives Volume discounts.
Because Our Headquarters Executives Heard You
Express Mail
Priced to compete
New incentives
Volume discounts.
Commercial base discount is increased and expanded.
New “Commercial Plus” pricing tier to reward high-volume shippers.
To qualify, customers must ship:
More than 6,000 pieces per year for Express Mail
Average discount:
14.5 percent
Because our executives heard you, just like I told you earlier We Can Hear You Now

27. Priority Mail 2009 Average price change: 4.7 percent New incentives:
Commercial base pricing extended to IBI
New “Commercial Plus” pricing tier to reward high-volume shippers
To qualify, customers must ship:
More than 100,000 pieces for Priority Mail
Average discount:
7.0 percent
New small flat-rate box
Here’s more new incentives because our HQ heard you This is the new and improved USPS,

28. Flat Rate Envelopes And Boxes
2009 Flat Rate Prices
Flat Rate Envelopes And Boxes
Commercial
Commercial Plus
Priority Mail
Envelope
$4.80
$4.75
Small Box
Regular Box
$9.85
$9.67
Large Box
$13.50
$13.27
Large Box (APO/FPO)
$11.50
$11.30
Express Mail
$16.63
$14.96
Let’s get a quick overview of the flat-rate prices for 2009.
Flat-rates are great for saving customers money on heavier items or on items that are going to zones farther away.
We have flat-rate options for Express Mail, Priority Mail and both Express and Priority Mail International shipments.

29. International Products
Global Express Guaranteed® (GXG) Reliable, date-certain shipping to over 190 countries.
1-3 Business Days
Express Mail International® (EMI) Reliable, expedited service to over 190 countries. Now available with day-certain delivery to select destinations.
3-5 Business Days
Priority Mail® International  (PMI) Reliable, priority handling to over
190 countries worldwide.
6-10 Business Days
First-Class Mail® International
Reliable and economical means of sending correspondence, documents and lightweight merchandise weight up to 4 pounds.
Varies by Destination

30. Postal Qualified Wholesalers
Access Worldwide Brokers Worldwide Cloutier Direct, Inc. CMS, Complete Management, Inc. Dahlgren's Mailing Service, Inc. Distribution Postal Co., Inc. Express Messenger International Express Postal Options International (XPO) Global Postal Solutions, Inc. IBC, Inc. International Delivery Solutions (IDS) Mail on the Move LLC International Mail Service, Inc. (IMS) Pitney Bowes International Mail Services Priority Post Co., Inc. RR Donnelley World Marketing Zip Mail Services, Inc.

31. Free Packaging Opportunities
Available for all priority & express mail shipments
Same domestic packaging can be used for int’l shipments
Customized/co-branding available to those who qualify
Brand with the most trusted government agency
Free packaging is cradle to cradle certified
Let me call this to your attention- does everyone know what cradle to cradle is-not only is the cardboard recycled- even the ink is soy based all biodegradable we understand cardboard is expensive – that’s why we are offering it free as an incentive

32. New Growth Opportunities
Customers can’t try on touch, see or feel the products before purchasing
An emerging driver of growth in the market place is the need for reverse logistics solutions
There is an increasing need for items that are sold to be returned, repaired, recycled, recovered or recalled
Theres less and less brick and mortar, more click and mortar which is a reason for growth its easier to sit at home even with having to return the product it beats starting up the car and fighting traffic. The USPS makes it easy for your customer to return via the Mercandise return service which you can have on your websie
The growth of online shopping has resulted in an increased need for shipping returns. Some of the most popular items on the internet are shoes and apparel. Customers may buy several pairs of shoes, even in different sizes and return the ones they don’t want. Online shoppers can’t touch and see materials up close and may want to return or exchange clothing items. Retailers understand that ease of returns and speed of exchanges drives customer retention and more business.
Gone is the day of the neighborhood repair shop for consumer electronics. Now electronics are manufactured elsewhere and need to be shipped out for repairs. This has created a need for an easy solution for customers to ship back repairs.
The USPS has been instrumental in helping companies with the recent surge in recalls. Lithium batteries and Vioxx are two examples. The recent spate of toy recalls illustrates why recall solutions are so important. Toys containing lead paint were recalled – the right thing to do – but most ended up in landfills leaching lead into the water tables, horrible for the environment.
And finally Recycles. With increased public awareness and the inevitability of Government mandates in the future there is an increased need to help both businesses and consumers recycle responsibly. The USPS is partnering now with companies to help consumers recycle compact fluorescent light bulbs and consumer electronics and we are exploring ink Jet cartridges and other items that can be taken back from consumers after their useful life and repurposed for future use.
There is an awareness in the marketplace that the USPS’ vast delivery and retail infrastructure makes us uniquely suited to take back a package from the household. We have nearly 37,000 Post Offices, over 253,000 collection points, and our Letter Carriers are at 148 Million addresses six days a week.

33. Strategies Moving Forward
Always in the forefront we are the USPS ease of use as in usps.com free pick up
Now we’re showing more and more scans

34. Improve Customer Service
Improve “ease of use”
Developing technology to enhance our USPS.COM website each and every day
Shorten start-up time for new customers
Improve customer care
Reduce response time for customer inquiries
Enhance employee training
Ongoing training to promote knowledge base for customer care employees
We realize its not only price that’s going to keep our customers we’re constantly monitoring and improving service

35. Visibility & Tracking Create more visibility with tracking
More passive scans
Added 114% in FY08
547 million additional “enroute” scans
Scan for “arrival at unit” for all packages
Increase delivery scan execution NEW
Release more tracking data to customers NEW
Release “out for delivery” event NEW
Add additional scan events MORE TO COME
Again we’re listening to you its not just about price You wanted more visibility and we’re giving it to you more scans more tracking data to your customers

36. Optimize Reasonable Pricing
Enhance profitability with new product offerings that meet customer’s needs
Continue to reward volume growth with volume discounts for Priority and Express Mail
Leverage contract pricing to grow volume and revenue (NDA)
Volume discounts, and pricing flexibility is all new and is here to stay at the USPS

37. NOW THAT WE HEAR YOU ….Let Us Try To Meet Your Challenges!
Recap
If You Aren’t Shipping Any Packages With Us, You Are Over Spending
Lowest Prices on 1-5lb Shipments
No Add-On Charges, Or Net Minimums
Leveraging New Pricing Freedoms
Preparing For Future Growth By Expanding Our Reach, Developing New Products And Simplifying Ease Of Use
Creating A Company That Puts It’s Customers First
NOW THAT WE HEAR YOU ….Let Us Try To Meet Your Challenges!

38. Query Discussion Questions Investigate Dialogue Probe Ask Inquiry?
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Questions? Thank you very much for your time today. I’ve enjoyed meeting with you.
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39. THANK YOU Rhonda Schorr, Sales Specialist Rhonda.L.Schorr@USPS.GOV