**Mailers' Technical Advisory Committee**

**General Session**

**Thursday, June 12, 1997**

**Welcome**

Arthur Porwick opened the meeting at 9:05 a.m., welcoming the members
and expressing appreciation to Carole Overkott for her diligence in
organizing the meeting.

**Marketing Directions**

Allen Kane, Chief Marketing Officer, described his strategic plans for
marketing, noting that he was focusing on seven strategies for 1997:

1\. Optimize the financial picture for fiscal year 1997 versus the
budget plans.

The plan is to generate \$2.4 billion more revenue in 1997, live within
both the marketing and advertising budgets. Revenue gain is a bit below
plan thus far. Marketing expense is below budget significantly and the
advertising expenses will not exceed the budgeted amount.

2\. Set a corporate priority to focus on core businesses.

Core businesses are the backbone of future success and growth. There is
a need to communicate that to the field and Mr. Kane said he was
visiting with every major field organization, to promote that concept.
Organizationally, Robert Krause will focus on Ad Mail, Correspondence &
Transactions, and Publications. John Kelly is running an experimental
organization focusing on the packaging business. In retail, Bill Brown
is working on a special project to determine how to enhance the retail
structure in the field, some 75,000 window clerks, to increase revenues.

Each team member is responsible for developing a basic marketing plan
for the core businesses -- where we are, where are we going, and
integrating the tactics.

3\. Put the pieces of the internal infrastructure in place and grow the
core businesses.

There are several pieces of infrastructure that must be put in place.
Each business has a specific manager, with team support, to focus on
individual core businesses, trying to develop and integrate an effective
marketing game plan. The second part is budget allocation that puts the
goals and targets where the managers touch the customers. The marketing
department will create a solutions group to support the field efforts.
Further, key indicators of success have been created with tracking
systems. A celebration plan is being put in place to reward success.
And, a new area/field organization is being worked on.

4\. Pilot new initiatives that support our core competencies and have
profitable revenue opportunities.

First-Class Mail is not growing significantly, and it is important to
create a strategy to defend against revenue loss. There are some fast
growth products -- ad mail, packages -- that can be emphasized in
marketing plans. There are also a number of products that have future
growth potential -- international business, retail products, stamps,
etc. Mr. Kane cited the recent Bugs Bunny stamp plus merchandise
products that completely sold out in three days, in spite of having
ordered far more products than estimates justified. The "unknown" is,
how much could have been sold as we start to become a better retailer.

5\. Determine our role in the new technological world evolving around
us.

The potential for electronic products and services is being reviewed and
we are now going through an internal consensus building process.

6\. Repair and build constituency relationships.

Mr. Kane called this strategy "stakeholder relationships" because it's
his feeling that there has been some loss of the partnership spirit
between the Postal Service and customers. The first step is to identify
the stakeholder groups, then craft a win-win partnership. When that is
just not possible, the objective is to be honest and upfront, and keep
the lines of communication open while work continues.

7\. Add to the Postal Service a culture of a strong operations
organization, focusing on expense reduction, and add a push toward
profitable revenue generation to satisfy customer requirements.

It is important to include the field managers and personnel in any major
program or initiative that is developed at headquarters, and this has
not been the case in the past, Mr. Kane said. Part of this process is to
move the "ownership" of revenue into the field and to the managers who
touch the customers.

Mr. Kane stated that his goal was to help move the Postal Service into
the 21^st^ Century as a growth company. To remain competitive, reaction
time must be improved to match the agility of competitors. Finally,
employee support for the marketing program is critical.

**Core Business Marketing**

Robert Krause discussed the objective of strengthening the core
business. He stated that his responsibility was to create a focus on
existing products and services, to enhance value for customers, and to
make sure that the financial returns to the Postal Service are
sufficient and appropriate.

Mr. Krause said that the focus will be on the feature and services
changes, enhancements to products and services, and best use of internal
resources. Core business is any existing business product and/or
service. These core businesses fall into four groups: correspondence and
transaction business; the advertising mail business; periodicals; and
special services business (such as PO boxes, insurance, certification,
money orders and so on) which exist to enhance the value of the more
basic products.

An important objective will be to defend the First-Class product group
with marketing that will demonstrate the value of hard copy
communications. The industry marketing group will focus on special
industry groups (like banking, insurance, retail) and look for new
markets, such as the home business market. Other groups include market
research and analysis, which will continue to rely on data base analysis
for decision processes, and market infrastructure, which will include
the development of the inbound customer service call centers to improve
customer access for every area of the Postal Service.

Specific projects on the agenda include an effort to build a series of
features around direct mail services that will make them an equal with
other means of advertising. There will be a focus on pricing and service
for the periodicals publishers. Cash management must be state of the art
to improve overall financial efficiency.

**Financial Update**

Richard Porras presented a look at the current financial condition of
the Postal Service, focusing on the year-to-date figures. Briefly, he
noted that operating revenues are slightly below budget projections
(-0.9%), but operating expenses are also below projections (-1.7%). The
net income is \$322 million ahead of projections, through the third
quarter. The projections for the full year are for a net income of \$650
million and a \$1.3 billion loss in 1998.

Compared with the prior year, the Postal Service is \$459 million below
net income for 1996, and projections for 1998 are much worse because of
various circumstances that impact expenses negatively. For this
particular year, however, many of those expenses have been less than
anticipated. In most categories, expenses are below budget (with the
exception of transportation, which is higher than budget).

Since 1992, there has been a focused effort to keep cost increases below
5 percent and, during the last few years, that has been successful.

Looking at specific products, Mr. Porras noted the flat results in
First-Class (only slightly up from previous year), and the relatively
large increase (7%) in Standard A. Gross revenues for all products,
reflected by a 3.6% increase in volume. The system handled over 4.6
billion additional pieces. By the third quarter of 1997, volume growth
has already exceeded total volume for the full prior year.

Mr. Porras noted that productivity has been down for the last few years
and is now beginning to improve, partly because of programs and
investments in various aspects of the business, such as automation. The
projection is for a productivity improvement of about one percent.

Turning to the balance sheet, Mr. Porras explained that the cumulative
deficit or prior year losses at the end of FY 96 was about \$5.7
billion. Adding capital contributions by the federal government of about
\$3 billion, yields a negative equity position of \$2.6 billion.
Considering financials to date, recent profits reduced total prior year
losses to \$4.6 billion.

Mr. Porras summarized his presentation by noting that net income is
\$1.3 billion, productivity is turning around and cost increases are
being held to five percent, prior year losses are reduced to \$4.6
billion. Service issues are still a concern, and the positive net income
figures do have a positive impact on future price changes.

**Strategic Outsourcing**

Mr. Darrah Porter discussed outsourcing, observing that it is a tool
available to managers to improve long-term competitiveness of the Postal
Service. Among other benefits, outsourcing improves long-term job
security, although it is sometimes a difficult concept to sell to some
segments of the system. Managers may focus on reducing short-term
expense by outsourcing, Mr. Porter said, but much more can be expected:
improved service level, improved focus, access world-class capabilities,
accelerate re-engineering benefits, share risks, free resources, make
capital funds available, reduce and control operating costs, access
resources not available internally, outsource functions that are
difficult to manage, replace outdated systems, meet current and future
technology needs, reduce or eliminate inventory.

Mr. Porter reminded the Members that the Postal Service has been a major
outsource company for many years -- transportation, mail consolidation
centers, information systems, building maintenance and custodial
services. Now a major contract has been issued to Emery Worldwide for
Priority Mail services.

The Postal Service will concentrate on core competencies, Mr. Porter
said, and use outsourcing as required to help build a barrier to
competition. Outsourcing must enhance competitiveness.

**USPS Contingency Plan for Potential UPS Strike**

Pat Mendonca explained that the pilots for UPS have been in negotiation
since 1995. Those negotiations were suspended on June 2 by the National
Mediation Board until at least September. The Teamsters have been in
negotiation since March 1997. Their contract expires July 31.

Plans for bulk mail centers have been developed and are being reviewed
by the areas and by headquarters. Traffic and processing is being
monitored daily, and there are weekly telecons with the BMC's to stay on
top of operations. There is a USPS Strike Contingency Plan that has been
updated and is now being reviewed by responsible headquarters and field
personnel. An important part of the plan is to cause as little
disruption as possible to current customers.

**Blue Ribbon Panel Update**

Ralph Moden gave an update on the Panel activities at the last Postal
Forum in New Orleans. There was an open Panel session, its first
"deliverable," at which members discussed future growth of mailing
industry, customer expectations, major obstacles and milestones,
alternatives to the Postal Service, and attributes of a highly
successful Postal Service. The program was unscripted and spontaneous
and over 2,800 attended, the largest attendance of any session (except
opening keynote sessions) in the history of the Forum. More significant,

Mr. Moden said, was the fact that over 500 individuals shared views on
the session on ballots provided for the purpose. There were also two
focus groups held to discuss the Panel session and the opinions fairly
well paralleled the opinion voiced in the ballots.

Mr. Moden noted that the final report of the Blue Ribbon Panel should be
available by the next Postal Forum. The recommended follow-on activities
will be submitted to MTAC for review and possibly action, if any of the
activities are appropriate to MTAC.

**Closing Remarks**

Joseph Schick observed that members should review their own procedures
vis-à-vis service problems to insure that the mailers are not causing
problems. He added a reminder that the electronic system will be up and
running on July 1 and that members should participate. There was a brief
discussion about hotel accommodations for the MTAC meetings, and whether
or not the MTAC meeting should be held in conjunction with the Postal
Forum. Members indicated no desire to consolidate the meeting, and
agreed that a reduction in hotel rates would be helpful. The meeting
adjourned at 11:45 a.m.

**Mailers' Technical Advisory Committee**

**General Session**

**Wednesday, June 11, 1997**

**Welcome**

Chris Rebello , Industry Chair, opened the meeting at 8:35 a.m. He
introduced Arthur Porwick, who welcomed members and guests, and new
members: James Machut (National Small Shipments Traffic Conference,
Inc.), Neal Denton (Alliance of Nonprofit Mailers), Timothy Edgell
National Federation of Nonprofits), Victor Schnell (National Catholic
Development Council), Mark Watkins (Religious Press Association), Jack
Mahoney (National Retail Federation), Ron Lynde (American Gas
Association), and Ed Skiba (Red Tag News Publications, Inc.).

Mr. Porwick called on Ken Hunter, Chief Postal Inspector, to discuss
"Confidence in the Mails."

**Confidence in the Mails**

Mr. Hunter defined the mission of the project, to create a partnership
with major customers that would lead to a reduction in loss in the
mails, noting that it was consonant with the CustomerPerfect! goals and
objectives. He pointed to three major areas of emphasis: credit card and
financial crimes, rebate fraud and mail order fraud.

The credit card fraud partners meet regularly (last meeting attended by
68 interested organizations related to the credit card industry) and
support five working groups: physical plant security, transportation and
equipment, non-received issued (NRI) credit card loss reporting,
Department of Justice liaison (which deals with legal issues that cross
jurisdictions and agency boundaries), and identity/account takeover.

A quarterly newsletter is distributed to more than 1,200 interested
groups. The group is creating a video for bank tellers to help them
detect fraud. A video for airline employees to deter theft was
previously produced.

CMRAs (commercial mail receiving agencies) are very weak in basic
security compliance, which facilitates a variety of frauds. In Houston,
a survey revealed that 94 percent were in violation of the mail security
regulations, such as requiring a photo identification to rent a post
office box or individual authorization to receive mail at the CMRA
address.

Prevention efforts in the last four years have reduced NRI fraud losses,
but with over a million credit cards in the mail at any given moment,
the risk of loss remains significant. The providers have helped with
good data on card loss, which helps pinpoint high risk areas.
Investigations have resulted in 748 arrests during the first half of
this fiscal year. The professional rings that cause most damage often
move stolen cards to distant cities, making early detection more
difficult. Card activation procedures can be overcome by these
professionals.

Rebate fraud is a serious problem, with an estimated 100,000 to 200,000
alleged violators. Prevention includes an industry guideline for
promoters in developing a sound rebate plan to begin with, early warning
notices to individuals suspected of committing rebate fraud, followed by
more serious sanctions such as withholding of mail deliver, and finally
criminal prosecution.

For mail order fraud, there is a similar process that tries to identify
potential individuals or groups, and begins deterrence at the
notification level, proceeding to criminal prosecution as appropriate.
The mail order working group has visited major commercial operations,
invited customers to visit Postal Service operations, includes the
National Account Managers in the information and liaison loop, and has
established "confidence coordinators" to assist customers in prevention
and identification of fraud.

Mr. Hunter also responded to questions regarding revenue protection.
Revenue loss is not only factor.

**Meeting Facilitation**

Joe Schick, discussed meeting facilitation, pointing to a recently
published pamphlet on managing meetings and conducting an effective
decision-making process.

**Association Involvement**

Maynard Benjamin talked about the activities of the association
involvement committee, noting that a number of association executives
had met by telephone conference call to discuss issues specifically
related to association needs. One issue was the IBIP program, another
the Fast Forward (in which the problem of using the standard #10 window
envelope was discussed). The group talked about bar coding parcels and
the ABE program. These preliminary discussions will be continued in
future conference calls. Mr. Rebello noted that the committee was
developed to improve the flow of information between and among the
associations and MTAC.

**Communications Committee**

Thom Roylance discussed the newly formed communications committee,
currently six members, working to improve the flow of information within
MTAC, especially in the new working groups. Vehicles for moving
information would be the Issue Identification Form, the web page, which
will contain information about the working groups' activities, as well
as an improved new member orientation process, a regular newsletter and
an MTAC pamphlet. Mr. Roylance noted that the new structure would
probably put a review of the bylaws on a future MTAC agenda.

**System Update**

Mike Murphy presented an update of the effort to communicate issues and
the activities of the work groups to an extended audience. The RIBBS
(Rapid Information Bulletin Board System) and the web page will be used,
with easy access to RIBBS from the Internet. Special free web browser
software, available from the Postal Service, is another way to access
the information.

The Postal Service web page will present an "Issues Search Form" that
will allow a data base search of issues that have come within the
purview of the working group structure. The first version will be
available on July 1 and will contain basic information about the issues
-- title, individual(s) involved in the work group, and other brief
pertinent information. Later, in an improved version, some historical
data such as working group minutes and other narratives, may become
available. Passwords will limit access to certain groups (that is, some
data access may be limited to MTAC members only, some to the general
public as well).

**Work Group Updates**

Work group chairs briefly outlined activities to date:

The Address Coding Enhancement Work Group, under Bob O'Brien, has 20
members who met on June 10. The discussion related to achieving 100
percent delivery point barcoding and the group identified about 15
barriers, which will be more closely examined and prioritized in two
subsequent meetings that will be held before the next MTAC meeting in
September.

Mr. O'Brien mentioned a recent analysis of 850,000 "uncodeables" that,
in fact, remained uncodeable in certain software packages, but became
codeable in others. It hints at a problem that needs attention.

Dan Goodkind discussed the Small Mailers Information Group, those
mailers who may handle less than 3,000 pieces at a time. He said the
objective was to help develop guidelines that would help small mailers
take best advantage of the system, perhaps through a booklet of
information or a pamphlet.

A proposal was made by Joe Monastro that would result in a single ACS
notice, rather than repeated notices until address correction is made.
Peter Moore reported that the Postal Service has reacted favorably and
is looking at a way to implement the change.

Package Container and Pallet Integrity Work Group, reported by Russ
Shores, met at the Washington Bulk Mail Center to observe work in
progress. The problems that the Postal Service employees face are
impressive, he said, mainly because a substantial number of mailers do
not meet DMM regulations for BMC packaging. The federal agencies are a
major transgressor. The result is a major increase in "loose in the
mail" problems. Using rubber bands and string on bundles is a weak link
and the working group will recommend an end to that practice. Mr. Shores
noted that the Postal Service had resolved an issue related to enclosing
a polywrapped flat piece in a second shrink wrap -- no longer required.
The current DMM requires putting pieces in 10-20 pound units which fail
often enough to justify a review of that rule.

Mr. Shores commended the appointment of USPS liaison, Jim Magellon,
noting he is both knowledgeable and exceptionally helpful.

The Container Tracking Work Group was presented by James Schemmel, who
stated that it was a long-standing issue aimed at letting facilities
know in advance when containers would arrive. Tracking containers, using
scannable pallet flags, is being tested at several sites. The data
accumulated has shown clear utility in analysis of product flow. The
Postal Service sent a number of representatives to the last working
group meeting and have shown a strong interest in supporting the
process.

Cheryl Beller discussed Form 8125 Redesign Work Group activities. The
form, she said, is a receipt for payment of postage and proof of entry
into the mailing system. The 8125 exists in several versions printed at
various times over the last 6 years, and the variations in design and
data included on the form make analysis of data difficult. The work
group is looking at a complete redesign, improved format for ease of
completion and reading, simplification and the inclusion of a control
number and a contact person. There should also be a compatible standard
format for consolidated 8125's. Finally, the 8125 must accurately
reflect the actual mailing presented.

Joe Lubenow reported on the Presort Optimization Work Group, which is
looking at 24 items that affect presort pertaining to pallets, trays,
sacks and packages. The objective is to reduce residual mail and to
cause containers to be more filled.

Mr. Lubenow continued, announcing the availability of a revised Plant
Verified Drop Ship Guidelines, which became available about April 1997.
He announced a new work group, the Information-Based Indicia Program
(IBIP) under Mury Salls. It is open to anyone who wants to participate.
Not meant to consider cryptography, key management, intellectual
property and patent issues, the Federal Information Processing Standards
(FIPS), the work group will look at issues that may affect potential
users of the IBIP.

Another work group recently approved will look at the Planet Code, led
by Bob Rosser. It will look at existing and possible new uses of the
Planet Code.

Phil Parizino reported on the Fall Service Standards Work Group. The 16
members had convened twice to look at the anticipated response of the
Postal Service to the fall mailing season. The major issues were
identified. If mailers can identify delivery problems at the 5-digit
level, it would be helpful. The Business Service Network is an important
part of gathering information and providing solutions to service
problems. The BMC appointment schedules need to be analyzed to identify
trouble spots.

Mr. Lubenow stated that two work groups had been approved: a Parcel
Barcode Clarification Work Group that will look at format and symbology,
content of barcode, information contained, printing and so on. Another
group approved is the Return of Opened Parcels, which was brought up
earlier because it was felt a solution could be reached without work
group action. Unfortunately, some snags have made it necessary to create
this work group.

Howard Schwartz noted that an ad hoc group looking at centralized
postage payment and Direct Link had become a working group under Dick
Funck. Mr. Funck explained that Direct Link is a Postal Service
initiative to automate or create an electronic link for the movement of
documentation and the payment of postage for all classes of mail. The
work group is concerned with the Central Payment Program (CPP) for
periodicals, which is a clearinghouse for both payment and documents.
This may lead to an end of the need to create and store a lot of the
paper related to mailing periodicals.

Mr. Schwartz added that another group was established to reinvent the
publication watch system, to identify single subscriber complaints.
Joyce McGarvy will be the chair. There will also be a group formed to
look at the service problems related to periodicals.

Dan Minnick discussed the Mail.Dat Work Group, which had recently met to
look at the improvements of the 97.1 version over the 96.1 version.
Action items from the group included an effort by Jim Schemmel to
promote developing a viewer that would view a mail.dat. Secondly, he
said, remaining large vendors must be encouraged to support mail.dat.
Third, letter shops need to be recruited into the process and finally,
there should be a mail,dat users guide that would be written in a simple
language easily absorbed by users.

Rosemary Hamel talked about the Direct Link Work Group which is focused
on the pilot testing of the Direct Link program in the summer. It is an
effort to create an electronic environment for the payment and
acceptance of mail. The software has been created that will accept a
mail.dat from a customer. It will be tested at four sites Quad Graphics
in Sussex, WI, Quebecor in St. Paul, MN, RR Donnelley in Mattoon and
Pacific Bell in West Sacramento. The electronic system will parallel the
hard copy system. Other customers will participate in a more limited way
which will all provide some input to a revision of the software after a
30-day test. After these revisions are made, a second version will be
issued that will include electronic 8125's.

Mr. Minnick expressed special gratitude to Rosemary Hamel for her
dedication and contribution to reaching the point where electronic mail
payment and submission is actually being tested.

Liz Norris, reporting on the work group concerned with improving
standard mail catalog delivery, described the current efforts of ten
catalog mailers who, before the restructuring occurred, organized
independently to develop an information base about periodical delivery
service. The group has now become a work group of MTAC interested in how
to measure and/or create "time of delivery" standards.

Mr. Porwick closed the meeting, expressing the thought that the Postal
Service is pleased with the level of effort of the work groups. He
expressed appreciation for that participation and urged members not yet
involved to become involved.

The meeting adjourned for lunch.

**MEETING OF THE PARCELS SUBCOMMITTEE**

**Wednesday, June 11, 1997**

**Lloyd Karls, Industry Chair**

**Richard Sherrill, Postal Chair**

**Parcel Reclassification Update**

Lloyd Karls opened the meeting and introduced Ashley Lyons, who
discussed the Parcel Reclassification Update, noting that the case was
filed on February 21. The Board of Governors removed the case on April
14 in order to receive more information on the overall financials of the
Postal Service. A future rate case would structurally look almost the
same, but the specific rate figures might well change. The test year for
the withdrawn case was fiscal 1997.

**Status of Bulk Parcel Return**

Concerning the status of bulk parcel return, the Governors voted
recently to file the Shipper Paid Forwarding and the Parcel Return part
of the case. The terms are the same as in the original parcel rate case.
The Postal Service hopes these matters will be handled expeditiously.

**Parcel Barcode Clarification**

Julie Rios commented on the parcel barcode clarification issue. She
noted that draft bar code specifications were sent to MTAC some months
ago. Industry requested that the Postal Service develop a standard and
that resulted in the current effort to develop such standards, which
would determine what information should be included. The bar code could
simply be a link to reach a data base in which would be the detailed
information related to the customer; or the bar code itself could
contain such information. In addition symbology, print quality, fonts
and characters must be specified. Quality standards should be
developed.. Finally, there must be a phase-in period set. The project
should be completed within a couple of months.

Tom Chapman described tests run at the Seattle BMC -- Accountable Mail
(Parcels) Bar Code Reliability Tests. The test used Code 128 symbology
(actually a variant UCC/EAN 128 used in the international community) and
involved four code structures, six printer types (from 360 dpi to 600
dpi), 30 tests which involved about 5,000 samples per test. The four
codes were the standard routing code, an international routing code that
contained country data, a unique mail piece ID code, and a combined
(concatenated) code that combined the unique mail piece code and the
routing code. The x-dimension (narrowest bar) varied from 12 to 15 to 20
in ¾" height, and a 20 mil at 1". There were 21 different sized test
pieces.

All tests proved that the 15 mil x-dimension was readable at 99 percent
or better. The 12 mil and 20 mil were acceptable in most tests, but not
as consistently acceptable as the 15 mil. Except for the dot matrix
printer, all printers were similar in readability (within a couple of
percentage points). The dot matrix printer was clearly unacceptable,
reading in the 0% to 82% range, as compared to the 97% to 99% level for
the other printers. Although the 20 mil dimension read poorly at ¾", the
1" bar code read in the acceptable range. The test proved the
feasibility of using these codes but more rigorous engineering tests are
necessary to prove acceptability.

**Processing Standard A Parcels on FSM 1000**

Mr. Karls announced that a response from the Postal Service with regard
to processing Standard A parcels on FSM 1000 equipment was available in
written form, but the gist of the response was that parcels would not be
sorted on the equipment. A member noted that the specifications for
flats and parcels allow for an overlap, such that certain parcels would
actually qualify as flats.

**Return of Opened Parcels**

Mr. Karls noted that a work group on return of opened parcels had been
established. Rocky Matthews explained that, although the group had been
able to overcome some 12 issues related to return of opened parcels, the
13^th^ turned into a sticking point. Once opened, a piece is no longer
mail and, therefore, cannot be placed into the mailing system. Changes
that would allow that would require a rate case filing and there would
probably be conflicts among various customers about the terms of such a
case. The Postal Service, Mr. Matthews said, prefers to remain with the
ancillary services endorsements and perhaps add a term, "merchandise
recovery authorized", which would allow a safety net to be provided by
the Recover Units.

**Converting Subcommittees to Work Groups**

Mr. Karls introduced the final agenda item by noting that the Parcel
Subcommittee would not meet again under its current structure, but
instead, the work groups would be the focus of the September meeting. He
urged individuals to participate on the work groups and in identifying
issues that should be examined, perhaps by work groups. He then asked
Paul Mendonca to comment on the Business Service Network.

Pat Mendonca conceded that some of the service problems related to the
5-digit sort and the Postal Service is intent on developing a standard
approach to dealing with specific problems. Another problem that will be
examined is the Christmas rush and the difficulty of making appointments
for drop ship.

Jay Freitas described the Business Service Network, stating that the
objective was for the customer to have a single point of contact for all
problem solving needs. That point of contact would be supported by a
cross-functional service team that covers the gamut of Postal Service
products and services. Ideally, when a customer calls, the point of
contact person will be able to pull up a screen with customer data and
history. As history is continually added, the data base formed across
the customer base will allow analysis of problems and solutions and,
hopefully, allow a proactive approach to problems at some time in the
future -- preventing the problems before they appear.

The meeting was adjourned at 2:55 p.m.

**MEETING OF THE STANDARD MAIL SUBCOMMITTEE**

**Wednesday, June 11, 1997**

**Dan Minnick, Industry Chair**

**Recycling of Undeliverable Mail**

Presenters: Charlie Bravo, USPS, Manager, Environmental Policy

Mike Fanning, USPS, Manager, Recycling Project

The USPS recycles One Million Tons of undeliverable mail annually.
(That's the equivalent of eight to ten billion catalogs per year.)
Historically, destined for landfills, the USPS now recycles all that is
possible. A clear message is that the USPS doesn't want to be in this
business, but the quality of the piece's address, hence its
deliverability, is outside their control, so what to do?

Since it's a necessity, the USPS chooses to avoid cost and create
revenue. Recycling avoids the cost of transporting to landfills and the
cost of using the landfills. Conversely, the recycled paper has a resale
value which contributes to the revenue stream, thereby reducing the
postage payer's contribution to cost coverage (reduced rates). Last year
the net revenue benefit was in excess of \$15 million. And recycling
participation has increased from 10% to over 45% in the last three
years, with continued participation increases anticipated.

In addition, the USPS' environmental strategy includes purchasing
recycled goods, and the use of recyclable components in production, such
as: stamp stock, glue, natural gas vehicles, etc.

**"Current Resident" Delivery of ACS/ACR Correctable Mail**

Presenter: Rocky Matthews, USPS (responsible for the Ancillary
Endorsement Revision

> project)

The proposal seeks to have mailpieces, which if identified as having
addresses to be fedback through ACS, delivered to the "current resident"
while the address correction is returned electronically.

This is a proposal that the USPS has reviewed and finds "do-able" along
with a handful of other options. The key is that the behavior would be
linked to the ACS participant code on the mailpiece, thereby eliciting a
specific response at the Computer Forwarding Site as the piece is input
for ACS.

However, the USPS is candid in noting that this, and the other similar
proposals, will not be possible until at least mid-'99 due to limited
resources to facilitate the significant system redesign.

**Air Sacks/DDU Pallets Task Group**

Presenter: Charles Howard, Harte Hanks, Work Group Chair

(See Attached).

The USPS is actively pursuing the creation of a mixed DDU pallet type to
facilitate the opportunity to get DDU mail nearer to the destination for
its initial entry.

Air Trays: industry surveys indicate that 25% of trays had less than six
inches of contents, approximately half of those being two foot trays
since there's only one size of EMM tray.

Air Sacks: similar results are derived for air sacks which create
serious production bottlenecks for the industry.

The causes seem to be overflow trays, thin pieces and the continuing
existence of the "no minimum" Five Digit Carrier Route sack and tray.
Effective immediately, this information and effort will be rolled into
the Presort Optimization Work Group, chaired by Joe Lubenow (industry)
and Ralph Moden (USPS), for resolution.

**Transition From Subcommittee Format To Work Group Format**

Presenter: Dan Minnick, Direct Marketing Technology, Standard Mail
Subcommittee Chair

This is the last meeting of the traditionally held Standard Mail
Subcommittee. Effective with the next MTAC meeting, the Subcommittee
will not be regularly scheduled to meet.

The Subcommittee Chair will have the discretion of calling a general
discussion meeting, also upon request of a member, if an appropriate
topic justifies such a meeting. Otherwise, the pursuit of issues -- USPS
informational reports, pursuit of joint industry/Postal tasks,
advancement of industry proposals, etc. -- will be reported during the
regularly scheduled Work Group Reports which will be structured in
Subcommittee sequence at each MTAC meeting. The Work Groups, open to
anyone, will be scheduled and organized by the industry/Postal chairs,
announced via the RIBBS network and other industry newsletters, etc.,
and summarized at each subsequent MTAC meeting.

Your feedback regarding this new process is sought and welcomed. The
meeting ended at 3:10 p.m.

**CARRIER ROUTE SACKS/DDU PALLETS TASK GROUP**

**Tuesday, June 10, 1997**

**Charley Howard, Industry Chair**

**Ralph Moden, Postal Chair**

**Air Trays**

Ralph Moden had followed-up the prior meeting with a letter dated March
31, 1997 with input as to possible data determining levels of air trays
and skin sacks. Basically, either data didn't specifically exist or the
data the Postal Service has is in line with the level of tray make-up
they expected from the Reclassification rule changes.

Following-up on Charley Howard's desire to survey the industry, MASA
surveyed their Board for Air Trays and GCA was to survey their
membership for Skin Sacks.

MASA: The survey was simple and requested the number of trays employed
by MM and EMM on an annual basis. In addition, the percentage of trays
with 6" or less in each group was asked for. There were six companies
that responded and their data is attached. One company realized that
they had presented monthly figures and this chart reflects the
correction. Basically, the results are: on 33.2 million trays, 8.9
million, or 26.9% had 6, or less, inches of mail. 28.1% of EMM trays and
26.6% of MM trays. Primary cause of the Air Trays:

-   Overflow trays

-   Thin mailpiece attributes

-   ECR trays.

**Air Tray Solutions**

There were several suggestions that will be conveyed to the new Work
Group; as well that some of them came from there.

-   Revisit the "FULL" Tray; ¾'s full

-   Optional SCF ECR tray

-   Combine ECR-Auto with 5-Digit Auto

-   Pursue 'reverse' presort methodology

-   Introduce 1" EMM Tray (rather a rigid one size fits all 16" tray)

**Skin Sacks**

GCA Survey Status - no results presented as yet.

Suggested Solutions:

-   3-Digit ECR Sack

-   Introduce 5-Digit and/or 3-Digit scheme for sacks which is similar
    to permitted with

> trays

-   Combine non-auto and auto packages in same sack as with Periodicals
    (would help

> alleviate mixed-ADC issue)

With this as the last meeting of this Task Force, the results will be
integrated into Joe Lubenow's Presort Optimization Work Group.

**MEETING OF THE PERIODICALS SUBCOMMITTEE**

**Wednesday, June 11, 1997**

**Howard Schwartz, Industry Chair**

**Bob Kooken, Postal Chair**

**introduction**

Howard Schwartz opened the meeting by welcoming all participants to the
MTAC Periodicals Subcommittee session. He then introduced Gwen Gesswein
to discuss the Centralized Automated Payment System (CAPS).

**Clarification of caps for cpp**

Gwen Gesswein, Program Manager, CAPS, said that the Centralized
Automated Payment System allows postal customers to access funds in one
central trust account, or to establish a debit account where the charges
for certain types of services are totaled and debited from your bank
account at the end of each business day, rather than maintaining several
separate trust accounts as previously required. By using CAPS, it is no
longer necessary to deposit or maintain funds in a local trust account
for Permit Imprint, Periodicals, Business Reply Mail, and Postage Due at
each post office where you transact these types of postal business. Gwen
urged CPP publishers to use the CAPS credit account to pay for postage.
Currently, CPP publishers cannot participate in the CAPS debit account.

**CPP/DIRECT LINK BRAINSTORMING**

Dick Funck and Ed Wronski spoke about the MTAC work group established to
develop the next generation of postage payment alternatives for the
Periodicals industry. This program will use information from MAIL.DAT
and Direct Link. A series of meetings have been held regarding
documentation requirements and computerized calculations of weight and
ad percentages. In addition to other areas, discussions have been held
concerning what constitutes advertising and how publishers can provide
up-to-date revisions on copy weight due to last minute changes, etc.
Additional meetings will be held. When available, minutes of the
previous general meeting, as well as the four sub-groups will be
provided to the Periodicals subcommittee membership.

**FOCUS GROUP UPDATE**

Joyce McGarvy, Crain Communications, gave a report for Tom Tully. Joyce
began by discussing the recent focus group meeting held at the National
Postal Forum in New Orleans in May. Joyce and Tom both felt disappointed
that some of the appropriate Postal Service operations managers
responsible for area service issues were not present at the meeting. The
meeting centered on the deterioration of service nationwide for
periodicals. Based upon this presentation as well as a presentation made
at a high-level meeting between the Magazine Publishers of America and
American Business Publications and senior USPS staff held at the forum,
an MTAC work group was agreed to be established to address these issues.
The USPS has acknowledged the fact that service problems exist. Joyce
mentioned that the Great Lakes Area has taken great strides in
addressing service issues. The next Great Lakes Area focus group meeting
is set for Chicago on August 6 & 7.

**CONVERTING SUBCOMMITTEES TO WORK GROUPS**

The Periodicals Subcommittee has established three work groups to date.
They are:

[Workgroup Industry Chair Postal Chair]{.underline}

1\. CPP/Direct Link - Dick Funck Ed Wronski

2\. Publication Watch Joyce McGarvy Harry Barnett

3\. Service Issues Tom Tully TBD

Since this was the last official subcommittee meeting under the old MTAC
format, Howard asked the members for interest in establishing areas for
further work groups. He mentioned that if no one offered input for work
groups, the Periodicals Industry may lose its voice in MTAC.

Howard also mentioned other items that were discussed at the
MPA/ABP/USPS joint meeting: we are still looking at the USPS allowing
the barcode discount for flats handled on the new FSM 1000 which will be
retrofitted with a barcode reader. The discount should be available in
March 1998. The USPS, with industry representatives, will conduct a
review of processing of periodicals and flat mail. Howard also mentioned
that the USPS will be reviewing SCF makeup requirements.

In closing, Russ Shores said the new Plant Verified Dropshipment
guidelines were available and includes strong penalties for
non-adherence to schedules. One violation places a mailer on probation
for one quarter, two violations over four quarters results in suspension
of mailer's electronic access to the system for one quarter. Two more
violations over four quarters results in suspension of privileges for
two quarters. For a third offense, the mailer's electronic access to
DSAS is suspended until a written action plan to correct noncompliance
is submitted by the mailer.

Howard also announced that the USPS Major Facility and BMEU Directory
was available for handout. The meeting was adjourned at 4:50 p.m.

**MEETING OF THE FIRST-CLASS/EXPEDITED MAIL SUBCOMMITTEE**

**Wednesday, June 11, 1997**

**Mury Salls, Industry Chair**

**Al Kellert, Postal Chair**

Yvonne Reigle called the meeting to order, explaining that Mury Salls
was unable to attend.

**Move Update - Status from IRT Work Group and Fast Forward Discussion**

Susan Hawes discussed the Status of the IRT work group and the Fast
Forward situation. There had been two IRT telephone conference calls and
discussions included clearance issues on placement of endorsement
language, placement issues related to the ad plate, clearances needed
when MLOCRs apply endorsements, barcoded tray and sack readiness and a
proposed Federal Register notice that would require barcoded tray and
sack labels for all mailings. There was some discussion about the
responsibilities of list holders when a third party receives the list.

There are 201 companies who have completed the license requirements, 3
vendors who have certified interfaces (another very close), and three
sites with licensed installations (two more being installed this week).
Extensions for those who have completed the licensing agreement and the
self-certification forms will be provided on a case-by-case basis. The
extension letters are being mailed soon, she said, and would apply only
to MLOCR operations. A list of certified vendors will be posted on the
RIBBS.

There was an extended discussion about the fact that #10 window
envelopes would not be compatible with the printing applied during this
process. Mike Murphy noted that the change in the physical construction
of the window envelope was nominal, easily accommodated by most envelope
manufacturers. He added that early notice of this incompatibility should
have flagged the possible problem to mailers. Mr. Murphy noted that the
only letters that would not print on the window would be the COA
indicating a change of address. The rest of the new address information
would print and would allow an alert carrier to deliver the piece. He
said that companies who felt that this was a hardship could apply for a
special exception in the normal way.

During discussion, a comment was made that the six-month forwarding
would delay notice to the mailer that a new address was effective. Mr.
Murphy noted that continuing to endorse mail for ACS service would
result in an address correction returned to the mailer, who could then
opt for Fast Forward and resubmit the mail.

Volume data on Move Update will be presented to MTAC at the September
meeting, Mr. Murphy said.

**Shortpaid Mail**

Rita Crawford explained the proposed policy for shortpaid mail. She
noted that Revenue Assurance, a new group formed within Finance about
two years ago, had examined shortpaid mail and determined that the loss
of revenue was sufficient to propose a change of policy: shortpaid
pieces would be treated the same as no postage pieces. That is,
shortpaid pieces will be marked "Returned for Postage" and will be
returned to the sender for the additional postage.

The purpose is to improve customer service, reduce revenue losses and
improve operating efficiency. With a few exceptions, the policy will
cause the delivery unit not to attempt delivery. However, a policy
exception states that if the mail makes it to the delivery point and if
the addressee has made arrangements in advance to pay the postage due,
then the carrier may deliver the mail.

The policy proposal has gone through the standard procedure for
implementing a new policy to the point where the next step is to send
the final policy to the Board of Governors. Then a notification to the
public will be placed in the Federal Register announcing that the policy
will go into effect in 30 days.

Members expressed some reservations that the public response to
implementation of the policy might be noticeably negative.

**Priority Mail**

Tony Pajunas described the recently awarded contract to Emery Worldwide
that would provide Priority Mail service to a segment of the U.S.
market. The first phase of the contract, worth \$1.7 billion, to provide
Priority Mail service to 13 states: New York, New Jersey, Pennsylvania,
Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut,
Florida and parts of Georgia and South Carolina and West Virginia. Emery
will provide dedicated aircraft, facilities, furnish mail processing and
mail transport equipment, manage all personnel, provide surface and air
transportation for all mail under the contract.

Emery will receive the mail at specified locations and handle the entire
processing and transportation process until the mail is delivered to
specified ADC locations within the two-day time frame. Mr. Pajunas noted
that Emery must achieve a 96.5 percent on-time performance. Moving
Priority Mail onto the dedicated Emery aircraft should free up space on
commercial aircraft for 2- and 3-day First Class mail. Emery's hubs will
be located in Newark and Atlanta.

The first phase of the contract impacts about 40 percent of all Priority
Mail and the second phase would boost that share to about 70 percent.
Improved service, expected to begin in August, should be evident by
Christmas 1997.

In response to questions, Mr. Pajunas said that delivery confirmation
was anticipated in the fall. Although the labor organizations have filed
protest appeals, Mr. Pajunas said that his team had performed all of the
required process requirements to make it acceptable. Emery has been
informed that the current service should not deteriorate. That is,
current one-day Priority Mail should continue to be delivered in that
time frame.

The meeting was adjourned at 5:05 p.m.

Date: 06/18/97

To: Mail.dat Industry Task Group Members

From: Dan Minnick

Subj: MTAC \-- Mail.dat Task Group Meeting

Hi:

Tuesday, June 10th, the MTAC \-- Mail.dat Task Group met at Postal
Headquarters.

There was further discussion of the following possible tasks:

\- Support/communications of future Mail.dats

\- Develop additional applications

\- How to reach-out to other user groups

\- letter shops

\- presort bureaus

\- smaller software vendors

\- need for Mail.dat User's Guide?

\- need for Mail.dat Implementation Team?

Action Items were identified as follows:

\- Share techniques and benefits of Mail.dat to next tier of potential
lettershop users

Charles Thompson & Dan Minnick

\- Pursue USPS acceptance of "Presort Viewer" with Mail.dat to replace
documentation

Jim Schemmel

\- Encourage additional software vendors to support Mail.dat

Charles Thompson, Jim Schemmel & Dan Minnick

Potential Action Items:

\- Verifier for possible "reverse presort" qualification

To be developed at the next meeting:

\- Framework for Mail.dat User's Guide

The next meeting will be Tuesday, 09/23/97 (MTAC week) at Headquarters,

and probably from 9:00 until 11:00.

> Please call, if you have any questions; otherwise, I'll look forward
> to seeing you on the 23rd.

Have a great day,

Dan Minnick

V-847-517-5683

F-847-517-5189

E-danmin@dmti.com

**MTAC**

**Mail.dat Work Group**

**June 10, 1997**

**[Attendees]{.underline}**

  ------------------------------- ---------------------------------------
  [Name]{.underline}              [Company]{.underline}

                                  

  Joe Bailey                      Monticello Software

  Frank Montague                  RR Donnelley

  Joe Lubenow                     Metromail

  Peter DiPaola                   Judd's, Inc

  Charles Pace                    A.P.A.

  Charles Thompson                Ace Mailing Services

  Josie Pribbenow                 Quad Graphics

  Bob Reeves                      Perry Graphic Communications

  Jim Schemmel                    Communications Data Services

  Tom Tully                       McGraw Hill

  Marcus Smith                    Postal World

  Norm Scharpf                    Graphic Communication Association

  Rosemary Hamel                  US Postal Service

  Dan Minnick                     Direct Marketing Technology
  ------------------------------- ---------------------------------------

June 23, 1997

MTAC DIRECT LINK WORK GROUP MEMBERS

SUBJECT: Minutes of June 10, 1997 Meeting

Work group members met at USPS Headquarters Tuesday, June 10, from 10 -
11 A.M. Attached is the list of attendees and a copy of Direct Link
project update provided by Rosemary Hamel.

The Direct Link pilot is on schedule to be implemented at Pacific Bell
and Quad/Graphics on June 30, with Quebecor and RR Donnelley expected to
go live approximately July 30. Equipment and telecommunication lines
have been installed at each site and USPS staff at each DMU are being
trained on the Direct Link software.

Rosemary reviewed the objectives of the pilot:

-   to test mailers' ability to create and send accurate Mail.dat files

-   to test the Direct Link software's ability to support DMU
    verification and acceptance

-   to test Direct Link's ability to create accurate postage statements

It is anticipated that Phase 1 of the pilot at each site will last 30
days, followed by an evaluation period of approximately 2 weeks, with a
second 30-day pilot after that. New software upgrades will be introduced
throughout the pilot as necessary. The second phase of the pilot will
include Internet access and electronic 8125's.

> **MTAC**
>
> **direct link**
>
> **work group**

**June 10, 1997**

**ATTENDANCE LIST**

**[NAME COMPANY TITLE TELEPHONE \#]{.underline}**

**Tom Tully McGraw-Hill Gen. Mgr. (212) 512-2188**

**Marcus Smith Postal World Publisher (301) 287-2204**

**Leonard Bartels Dept of Defense Official Mail Mgr. (703) 325-0674**

**Norm Scharpf GCA President (703) 519-8180**

**James Schemmel CDS Dir Distribution (515) 246-6840**

**Bob Reeves Perry Graphic Dir Distribution (414) 478-1703**

**Rich Bobic Neodata Svcs Dir Postal Affairs (303) 604-7113**

**Val Scansaroli Time Inc. Dir Postal Ops (212) 522-1531**

**Dan Minnick Direct Tech Director (847) 517-5683**

**Robert Lindsay WC Direct Sr. VP (770) 532-9500**

**Greg Kurgansky AD Little DL Proj Mgr (202) 863-5363**

**Joe Bailey Monticello Soft. President (540) 854-4200**

**Rick Graff Dow Jones Postal Consultant (413) 598-2207**

**Richard Funck Meredith Dir Distribution (515) 284-2068**

**Frank Montague RR Donnelley (630) 322-6722**

**Joe Lubenow Metromail VP Postal Affairs (630) 932-2199**

**Peter DiPaola Judd, Inc. Mail Dist Mgr (540) 465-6634**

**Ed Conrad Forbes, Inc Mgr. Distribution (212) 620-2341**

**Charles Pace APA Consultant (203) 834-0533**

**Josie Pribbenow Quad/Graphics (414) 443-3401**

**Charles Thompson Ace Mailing Svcs President (770) 431-2500**

**Peter Moore Peter Moore Assoc President (303) 449-1908**

**Rosemary Hamel**