**Minutes of the**

**Mailers\' Technical Advisory Committee**

**May 5, 2004**

###### U. S. Postal Service Headquarters

**Benjamin Franklin Room**

**Washington, D.C.**

**First Day**

**Welcome**

**John Wargo, Postal Chair**

**Marty Emery, Postal Vice-Chair**

**Bob O'Brien, Industry Chair**

John Wargo called the meeting to order, announcing a special recognition
for MTAC member Charles Pace, a long-time member of MTAC and a veteran
of more than forty years in the mailing industry. Deputy Postmaster
General John Nolan, noting that Mr. Pace would retire at the end of
June, read a letter of appreciation from the Postmaster General. Mr.
Wargo presented a certificate of appreciation. Paul Vogel (not present
at the meeting) sent his words of appreciation for Mr. Pace's unstinting
dedication to the Periodicals Advisory Group. Mr. Pace expressed his
appreciation for the recognition.

Bob O'Brien announced a new member association, the Custom Publishing
Council with Laurie Rosen, Executive Director. New MTAC representatives
include:

> Pat McCarthy, National Assn. of County Recorders, Election Officials
> and Clerks

Chuck Cairatti, Newsletter and Electronic Publisher Assn.

Scott Pampe, Newspaper Assn. of America

Mary McCormack, Edison Electric Institute

Sue Sevening, Assn. for Postal Commerce.

**Overall Business Outlook**

**John Nolan, Deputy Postmaster General**

John Nolan announced that Senior Management and the USPS Board of
Governors (BOG) are reviewing the draft on postal reform submitted by
the House of Representatives. Any comment will be deferred until the
review is completed.

The Mailing Industry Task Force has completed Phase I and has moved on
to a focus on revenue for the industry. During the next few months,
alternatives will be considered and an agenda will be developed for
discussion at the National Postal Forum in September. Suggestions are
welcome from MTAC members.

In terms of business volume, improvement in the economy is anticipated
and, stimulated by some recent heavy volume growth of Standard Mail in a
few regions, the Postal Service is preparing for a positive volume in
the fall season. The focus on cost reduction and maintenance of service
continues, and thus far costs continue below plan and revenues are
slightly above plan. Both employee and customer satisfaction scores
remain high. Where return on capital investment is appropriate and
clear, there are funds available to make those investments.

On a somber note, Mr. Nolan announced that former Postmaster General
Marvin Runyon died on May 3, and that BOG Chairman David Fineman and
Postmaster General John Potter will attend the memorial service in
Tennessee.

**Financing the Postal System**

**Richard J. Strasser, Jr.**

**Chief Financial Officer and Executive Vice President**

Richard Strasser announced that the latest financial reports would be
released after the second quarter financial report is presented to the
USPS Board of Governors the following week. Then it would be posted on
the web site for review by MTAC members and others.

Mr. Strasser stated that his presentation would look at cost and revenue
analysis for fiscal year 2003. He noted that there is a statutory
requirement that the Postal Service operate at an approximate breakeven
level. Further, each class and subclass should cover its attributable
cost and make a contribution to the system costs that are not
attributable to specific classes of mail.

In 2003, total expenses were \$64.9 billion, of which 57% was considered
to be attributable or volume variable (\$36.8 billion). Those
attributable costs are mail processing costs, carrier time devoted to
preparing mail for delivery, the time when the carrier is at the
customers mail receipt location, transportation and retail transactions.
The non-attributable, or institutional (non-volume variable), costs
represent 43% of the total (\$28.1 billion). The largest component
includes delivery network and retail infrastructure costs.

Mr. Strasser presented a breakdown of these costs, noting that the
numbers were affected by the \$3 billion savings generated by the Civil
Service Retirement System (CSRS) legislation, and the 54 million
work-hour reduction in 2003 compared to 2002. The cost analysis:

> Class % Change \$ Change % Change not counting

CSRS

Express Mail up 1% .073 up 5.7%

Priority Mail up 1.8% .058 up 5.4%

First-Class Mail down .6% .001 up 5.7%

Standard Mail down 6% .007 No Change

Package Services down 7.9% .136 down 3.7%

Periodicals down 1.7% .004 up 4.1%

In terms of actual per piece statistics, the following represents total
revenue, attributable costs and contribution to system costs for each
class:

Average Attributable Contribution

Revenue

Express Mail \$15.90 \$ 7.53 \$8.37

Priority Mail \$ 5.22 \$ 3.35 \$1.87

First-Class Mail \$ .37 \$ .17 \$ .20

Standard Mail \$ .19 \$ .11 \$ .08

Package Services \$ 1.96 \$ 1.59 \$ .37

Periodicals \$ .24 \$ .23 \$ .01

International \$ 1.75 \$ 1.31 \$ .44

Mr. Strasser commented on the contribution from package products, about
which a competitor testified that the Postal Service "subsidizes" an
actual loss with First-Class Mail revenues -- in fact, Express Mail,
Priority Mail and Package Services contributed \$2.5 billion to system
costs in 2003.

Turning to the business model, Mr. Strasser commented that the retail
and delivery network is continuously expanding, financed in the past
with volume growth and moderate rate increases. Those increases in the
past have generally covered inflation and the expanding delivery
network. However, in the last three years contribution has been lost as
a result of volume declines and changes in mail mix. This, coupled with
5.3 million new deliveries has resulted in a decline in
revenue-per-delivery-point (\$1.50 in 2002 versus \$1.37 in 2003).
Without the benefit of the CSRS savings and the successful cost
reductions, that situation would have required a rate increase.

Mr. Strasser discussed inflation in Postal Service costs, noting that
the overall increase in costs have appeared to parallel the well-known
inflation indicator, the consumer price index (CPI). In part that has
been the result of the consistent productivity improvements. However,
the actual expenses related to various categories show that, although
wages, transportation and retirement have been around 3%-4%, other
categories have been considerably higher -- health insurance (11%),
retirement health benefits (15.6%), and Workmen's Comp (14.2%).
Altogether the Postal Service is experiencing an annual increase of
about 4%, when the CPI is increasing at less than 2%. If rates are
increased at about the rate of inflation, and contribution is lost from
volume declines and mail mix changes, the only place to look for relief
is improvement in total productivity factor which, when the math is
done, requires an annual improvement of 3.7% -- achieved only twice in
the last 33 years. Facing this challenge requires greater management
flexibility than now exists in the structure of the Postal Service.

During discussion, Mr. Strasser responded to a comment about focusing on
work sharing across the network versus efforts such as delivery point
packaging, noting that there have been major network cost reductions
(transportation costs, elimination of annexes, PMPC consolidation, and
the manpower reductions, a majority of which were processing and
distribution clerks). He commented on the program to reduce on-the-job
injuries, which have declined 30% in the last three years, and the
Postal Service's position regarding possible future legislation -- the
reinstatement of a brief waiting period before compensation begins and a
review of the regulation to provide 66% tax-free income for life when an
employee is permanently disabled (that is, no adjustment when the
employee would reach normal retirement age). Commenting on further
efficiencies related to automation, Mr. Strasser said that there was
still potential to reduce the in-office time for carriers, but there is
a limit since the physical delivery time is not as flexible.

Mr. Strasser commented on the perceived Postal Service monopoly, noting
that there are currently alternatives for almost every service,
including the electronic billing and payment process. He emphasized the
importance of flexibility for the future management of the Postal
Service, both in pricing and in management issues, such as benefits,
which are now federally mandated.

Mr. Strasser announced that the latest financial reports would be posted
on the web after review by the Board. The URL address is shown below.

<http://www.usps.com/financials/_pdf/Q22004QtrlyReportFinalv1-2.pdf>

**The EMA Foundation Study of Mail and Jobs**

**John Schlich, EMA Foundation ISP Steering Committee**

**Robert Reisner, CEO, Transformation Strategy**

John Schlich commented that the EMA Foundation's Institute for Postal
Studies was established two years ago to provide industry comment to the
President's Commission on the postal reform process. The ISP has
produced a review of presidential and advisory commissions, submitted
testimony to the President's Commission, sponsored two symposia to
discuss postal reform, developed an economic model to better understand
the impact of costs on postal rates and mailing volume. The Jobs Study
has recently been completed, including a deck of jobs cards that
identify jobs related to the mailing industry at the congressional
district level. There are almost 9 million individuals involved in the
mailing process, nine private sector workers for every one Postal
Service employee dependent on the mails.

Robert Reisner noted that the ISP was set up in response to a
congressional request for information support, especially with regard to
the impact of postal reform on the job market. He stated that without
postal reform and management flexibility for the Postal Service, the
cost of mailing would increase with its concomitant effect on volume,
revenues and jobs. The President's Commission predicted that total mail
volume might begin to decline in 2007, both First-Class Mail and
Standard Mail. A volume reduction of 10% or 20% decline would affect
about 1.5 million jobs. However, it does appear that shifts in the job
market would affect specific areas differently, both positively and
negatively.

[Please click here to view the
presentation](../MTAC0504/110robert%20Presentation%20on%20Jobs%20Study.ppt)

**Marketing Update**

**Anita Bizzotto**

**Chief Marketing Officer and Senior Vice President**

Anita Bizzotto described how the Postal Service is adopting technology
to create innovations that make it easier for customers to take
advantage of the power of the mail -- mailing tools that include
Click-N-Ship, Carrier Pickup, a partnership with eBay, Automated Postal
Centers, Prepaid Priority Envelopes, Parcel Return Service, the Customer
Connect Program, and the new eBSN web site for major customers.

Recently there was a focused marketing effort to broaden awareness of
the Click-N-Ship service. During a "Click-N-Ship Week," a targeted
effort included offering educational seminars to explain the value of
the service, and visits to the web site increased 63 percent.

Carriers have always picked up from customers while on their route.
Technology has made this easier by allowing customers to request next
day pickup via the internet. This service is now available in 13,000 ZIP
Codes serving 101 million delivery points.

Since 60 million Americans are eBay users, the Postal Service developed
a "partnership" with eBay that allows sellers to click onto the Postal
Service area of the eBay web site and completely manage the shipping of
goods sold -- information on how to navigate the site, obtain rate
information, print shipping labels, maintain a shipping history, and pay
the postage fees with a credit card account.

The Automated Postal Center is a self-service machine that will
initially be placed in 2,500 retail Postal Service sites, many with
24-hour availability. Deployment has already begun. The Automated Postal
Center allows a customer to weigh mail up to 70 pounds, calculate rates
(Express Mail, Priority Mail, First-Class Mail and Parcel Post), prints
required labels, purchase the specific postage (or purchase sheets or
booklets of stamps), obtain delivery confirmation and pay with a credit
card. Change of address will be added in the near future. There was a
member comment that consideration should be given to placing the
Automated Postal Centers in vendor locations, especially on
college/university campuses.

Prepaid Priority Mail Envelopes are gaining popularity. They can be
purchased on the web site. Parcel Return Service is off to a good start
with two mailers participating in the experiment and a third almost
ready to participate. Finally, the Customer Connect program has received
a good reception by carriers and participation is increasing. Results
have been excellent thus far, including a \$4 million sale, followed
recently by a sale of over \$1 million.

Finally, the Business Service Network has launched an Internet-based
website, eBSN, that will allow major mailers to contact the BSN with
issues 24 hours a day, every day. The customer will be able to track
response and add information any time.

Ms. Bizzotto announced that, in the summer, the Postal Service will
launch a Reply Mail web site that will provide information about how to
use reply mail, allow customers to apply for permits, pay fees with a
credit card or through CAPs, confirm ZIP+4 codes, and electronically
create pre-approved camera-ready formats. Another innovation planned for
the fall is electronic return receipt service that will eliminate the
current green card attached to the recipient's envelope, and allow the
sender to receive an electronic facsimile of the recipient's signature.

Ms. Bizzotto also announced National Postal Customer Council (PCC) Day
on May 26, when the Postmaster General will speak to all PCC's via a
videoconference connection. She noted that there are a number of
outstanding PCCs, and there will be an effort to help all PCCs become
more active and effective.

The National Postal Forum in September (19-22) will include a number of
marketing seminars, six new business tracks and more than a hundred
workshops. Early registration is encouraged. MTAC members, members of
MTAC associations and PCC members receive a discount, and the Postal
Service will work to get early bird MTAC members into the host hotels.

Ms. Bizzotto commented that there will be a major campaign to encourage
the use of direct mail. Customers will be encouraged to consider the use
of "Customized Market Mail" -- high impact mail that allows unique mail
piece shapes. Early users have reported responses well above the
average.

Recent market research was completed that proves the impact of coupling
a catalog with an Internet sales site. There is a clear increase in
sales-related factors. Catalog recipients spend more time at catalog web
sites \-- 16% more visits, 20% more pages viewed, and 14% more time
viewing the site. They are twice as likely to purchase an item, and it
has been shown that frequent mailings improve sales. The research will
be released in June.

Rod DeVar described the direct mail campaign that would be targeted at
larger advertisers who are trying to build product awareness, induce
consideration of a brand or stimulate a purchase decision. The campaign
will include several 75,000-piece mailings to key decision makers, and
will continue through the fall.

Ms. Bizzotto announced that a new work group was being considered to
look at the possibilities of eliminating sacks. She invited interested
MTAC members to consider participating and noted that an MTAC co-chair
was needed.

During discussion, Ms. Bizzotto commented that there was very little
activity related to the Private Citizen Initiative, whose members
planned to return to the Postal Service all ad mail received during the
month of April

[Please click here to view the
presentation](../MTAC0504/140%20mtacbizz.ppt)

**USPS Privacy Policies**

**Zoe Strickland, Chief Privacy Officer**

Zoe Strickland stated that the Postal Service was committed to
maintaining the confidence that Americans have had for over two hundred
years in the security and privacy of the mails. The Postal Service
follows the requirements and best practices of both the public and
private sector. As examples, the Postal Service follows the Privacy Act
of 1974, the eGovernment Act, and the Federal Trade Commissions Fair
Information Principles (the latter calling for notice of use of
information, customer choice in allowing that use, customer access to
appropriate information, provision of redress procedures, and security
of data). The internal Postal Service approach to assuring privacy
begins with bringing the right people together to develop policies and
processes, and devising ways to communicate those policies and processes
to the widest audience, both in the Postal Service and in the public and
private sectors.

External groups interested in privacy are included in the process. These
include major corporate entities, federal agencies, advocacy groups, and
other privacy initiatives. Ms. Strickland explained that her office was
involved in a number of specific activities, including work on federal
legislation implementation, training, web-based Freedom of Information
Act activity, as well as integration of privacy into the major
activities of the Postal Service. The office is working with Marketing
on Internet and e-mail privacy issues, and with a number of stakeholders
in the private sector. Ms. Strickland noted that she was personally
active in two associations, working on privacy committees and groups.

The Postal Service developed policies related to intelligent mail, which
were published in March 2004. These policies involve issues such as
treatment of Business Reply Mail, law enforcement and security (which
excludes access to certain information by law enforcement agencies other
than the Postal Inspection Service). One challenge is the fact that
there is no overarching privacy law in the U.S. -- instead there are a
myriad of state laws and a number of major federal laws (GLB, HIPPA,
COPPA, the Privacy Act and the e-Government Act). There are also rules
about state DMV data. Although no major legislative initiatives are
anticipated, there will likely be changes in federal regulations
especially when states develop regulations that put pressure on the
federal government to provide standard regulations covering all states.
Some of those include the right to bar sales calls and restrictions on
e-mail advertising (spam).

The do-not-call regulations have been very popular and widely used, and
effectively enforced by both the private and public sector. The
do-not-email regulations (federal requirements related to e-mail
marketing established in January 2004) have been more difficult to
enforce. Do-not-mail regulations have been proposed in a few states, but
no serious progress has been made, and the recent "junk mail" protest
was ineffective.

The Postal Service has conducted three studies related to privacy laws.
First, a number of national accounts were contacted and the comments
received indicated that state and federal privacy laws were impacting
certain aspects of the mailing business (e.g., obstacles to obtaining
mailing lists). Second, state laws have been monitored and analyzed in
terms of the effects on mailing processes. Finally, a number of focus
groups have been held to discuss the impact of laws. All three studies
will be discussed at the National Postal Forum in September. Ms.
Strickland discussed "permission marketing," ads that we welcome in
certain consumer homes. Actions by both regulators and industry
(especially ISP that block e-mail) have impacted that area of marketing.

The federal government is becoming more involved in requiring privacy
impact assessments for all federal projects, new regulations, etc., and
the issue of information security is high on many agency priority lists.
Concerning homeland security, the Patriot Act will be reconsidered in
2005 and there are implications related to privacy in that process.

In conclusion, Ms. Strickland commented that marketing and technology
are pushing privacy into public awareness, as are the more and more
sophisticated direct advertising processes. During discussion, the
specific issue of industry obtaining addresses involving apartment
numbers was raised. The Postal Service would need to carefully examine
these proposals, as there may be privacy implications that present
obstacles. Ms. Strickland stated that regulations prohibit the Postal
Service from providing mailing lists of customers. The Privacy Act
includes substantial requirements to creating any new
information-providing policy, including Federal Register notice of the
process.

[Please click here to view the presentation](../MTAC0504/225zoe.ppt)

**Market Research on the Packaged Mail Concept**

**Greg Whiteman, Manager, Market Research**

Mr. Whiteman discussed the concept of packaged mail, noting that it
would not be a major change in the way consumers perceived mail service,
the value of mail, the "mail moment" and how recipients would handle the
mail each day. Research was based on 24 focus groups (20 residential
consumers, 4 businesses) in five cities, covering the various mail
delivery methods -- mailbox, mail slot, curbside, cluster box, and
apartment delivery.

Consumers generally confirmed that they would continue to remain highly
engaged in the mail receipt process and would sort and open mail as
before. Most indicated that a clear plastic bag would be most
acceptable. Although almost all agreed that they are highly satisfied
with the current performance of mail delivery, there were issues common
to many -- inconsistent delivery times, mis-delivered mail and jammed
mailboxes.

As it relates to consumers' attitudes toward mail, they are highly
engaged with their mail on a daily basis. The majority is enthusiastic
about mail, recognizing that it is highly valuable for them. A smaller
group has mixed feelings about the value of the mail received, realizing
that they receive both mail pieces which has value but also mail pieces
with no value. A very small number of consumers find mail not to be
valuable and do not depend on it. Importantly, consumers have a
heightened concern about mail security and safety, reflecting overall
concerns about safety and security, stemming from the events in the past
few years.

When the focus groups addressed packaged mail as a concept, the
responses were widely varied and depended on personal circumstances and
values, and the type of mail delivery. Many consumers saw benefits,
providing them an easier way to bring mail into their homes. There were
issues related to the environmental impact of adding the plastic
packaging that would have to be discarded. There was also concern about
the safety and security of the mail and the impact of a sealed bag could
have on this.

Generally, the survey showed three market segments. The first is the
group of acceptors (who tended to be older) who believe that packaged
mail would be easier and more convenient and make delivery more
efficient. The second is those with no specific positive or negative
objections and do not easily see the benefit. These customers are
relatively neutral in their reaction. The third is the group of opposers
(younger and more affluent) who are concerned about the environment,
safety and security, and is a group that could be more vocal in
expressing opinions about the program.

What is important is regardless of how customers reacted to the concept,
they indicated that it would not impact the way they handle the mail
received. They still will collect and sort the mail daily.

Mr. Whiteman stated that, as a result of these preliminary findings, the
Postal Service will execute a large-scale consumer study to try to
quantify the segments and the extent of the positions of each segment,
possible changes to in home behavior related to mail, and to identify
the potential effect on brand image and perception of mail value.

During discussion, Mr. Whiteman assured the MTAC that the plastic used
would have neither safety risks nor environmental impact problems. He
also noted that, because of the very large number of variables related
to the process, it would be impractical to develop a test and control
research process related to consumer response before and after
implementation. There was a comment that there might be a negative
response rate effect on certain segments of the market that receive
primarily ad mail.

[Please click here to view the
presentation](../MTAC0504/Delivery%20Point%20Packaging7.ppt)

**Mail Moment Research Results and Implications**

**Greg Whiteman, Manager, Market Research**

Mr. Whiteman announced that the Postal Service conducted recent research
to understand the in-home behavior of consumers related to receipt of
mail on a daily basis. It revealed that mail helps consumers manage
their households and has real job-value which supports and increases the
use of mail. The high value of mail is the connection with the market --
bills and bill paying, subscriptions, useful advertisements and the
occasional personal mail piece. When that personal piece arrives -- a
letter or card from a friend, for example -- the positive impact is
extraordinary.

Mr. Whiteman noted that the research showed that, in most homes, one
individual sorts and distributes the mail and typically that individual
is the predominant shopper and finance manager. About two-thirds are
female members of the household, one-third are male. The "mail moment"
is often the transition from work life to home life, and there are
usually good feelings related to the process. It is usually a habitual
action, often the first thing done upon arriving at home after work,
removing mail from the mail box and sorting through the various mail
pieces. Mail is crucial in helping consumers enjoy their personal life
and brings value to them.

The survey revealed serious challenges. Mail must be perceived as having
value, and almost 40% of survey recipients indicated that the next batch
of mail would contain pieces of little or no value, and over 50% of the
pieces received on a regular basis have no value -- including a fair
number who felt bills had no value. It also revealed that the proportion
of consumers who really rely on the mail has deteriorated as the
population has aged -- over 60% of recipients over 60 years of age
conveyed a dependence on the mail while only 41% of those under 40 felt
the same way.

Therefore, it is critical that anyone who sends mail into the home must
focus on increasing the perceived value of each piece of mail. The key
is that mail needs to be relevant and useful, in helping consumers
manage the critical functions of home life.

During discussion, it was noted that a "valuable" piece of mail that has
almost disappeared from the mails is the free product sample, which has
disappeared mainly because of rates. Mr. Whiteman agreed that this was
the kind of issue that should be addressed. Responding to a comment
about the postage penalty for adding "valuable" information to credit
card bills, he mentioned the Nordstrom redesign of monthly bills to
focus on helpful information for the customer and minimize the billing
aspect.

[Please click here to view the
presentation](../MTAC0504/MailMom%20MTAC2.ppt)

**MERLIN**

**Michele Denny**

Michele Denny announced that all Merlin machines have been deployed, and
the phase-in and grace periods have ended. The tolerance rates for
presort and labeling accuracy, First-Class short paid meter mail and
carrier route sequencing is currently 95%; barcode quality for letters
is 90% and for flats 80%; permit imprint weight piece count is 99%; and
Phase I barcode accuracy is 100%. The flats rate requirement will go to
90% on July 31.

MERLIN utilization is near the target of one in six mailings for small
mailings (under 10,000 pieces). The verifications for large mailings
(over 10,000 pieces) is 48%, although some sites are processing at the
80% rate. Barcode readability is outstanding -- 95% of the letter
mailings being tested at the 90% threshold are passing. About 30,000
mailings are being tested each week (mainly letter mailings), a number
that is steadily increasing. About 95% of flats mailings, tested at the
80% threshold, are passing. Barcode accuracy has stayed at nearly 99.9%,
presort verification at about 99% and short-paid mailings at 99.7%.

Over 314,000 mailings have been screened for 0s and 9s -- 100 mailings
revealed 0s and 84 revealed 9s -- for a passing rate of 99.9%. There was
additional postage assessed, mainly for mailings with 9s, ranging from a
few dollars to\$17,777, with an average assessment of \$1,184.

Ms. Denny confirmed that the readability threshold for flats would
increase to 90% (on a par with letters) on July 31, 2004. It should
affect less than 1% of the mailings currently passing (which would
affect about 25 mailers who will be contacted in advance to help them
make quality adjustments to enhance the probability of passing future
tests). Ms. Denny commented on the communication plans to inform the
mailing community of the change.

Finally, Ms. Denny commented on the planned conduct of a sensitivity
test on the mail processing equipment to determine whether the standards
for barcode readability could be adjusted based on the actual read rate
of the Postal Service sorting and processing equipment. The test data
might support a change in the parameters in the MERLIN system to check
barcodes.

[Please click here to view the
presentation](../MTAC0504/MERLIN%20435michele.ppt)

**Minutes of the**

**Mailers\' Technical Advisory Committee**

**May 6, 2003**

###### U. S. Postal Service Headquarters

**Benjamin Franklin Room**

**Washington, D.C.**

**Second Day**

Bob O'Brien announced the election of the new MTAC Industry Vice Chair,
Joyce McGarvy, who will take office immediately because of the
resignation of John DePiazza. He noted that the current MTAC Industry
Officers would serve an additional year, after which the two-year cycle
would resume. The election of MTAC Industry Steering Committee
Chairpersons will be held in August and MTAC members may submit
nominations between now and July 15. Mr. O'Brien announced that the
Corporate Automation Plan Phase Two had been published and is available
as a handout at today's meeting.

**BSN eService**

**Robin Ware, Manager, Business Service Network**

Robin Ware noted that, in the past, the BSN has been a telephone-based
service in which customers have a specific Postal Service representative
to field inquiries and handle issues. She introduced a new
Internet-based service that would allow customers to enter service
requests at any time, seven days a week, twenty-four hours a day. The
customer can also review activity on any service request.

Ms. Ware commented that customers using the service have experienced a
20% reduction in the time for issue resolution. That efficiency should
improve as enhancements direct the issue to the proper action person,
bypassing the current process that begins with the account
representative. The program started in September with a few customers
who basically provided a beta test. Improvements were made along the way
as participants were added. So far 86 customers are participating
involving 228 individuals who are entering 24% of their service issues
via the web. Large customers with a number of representatives online
will be able to access an overview of issues being addressed.

Ken Metroff provided a testimonial to the value of eBSN, noting that it
provides a technology solution for customers issues. It erases time
zones and office hours, since access in continuously available. It
eliminates the e-mail chain that often grows from issues that are
tracked by e-mail. It eliminates the need for the customer to identify
the responsible person in the Postal Service. The Postal Service can
agglomerate data and track trends and that can allow identification of
trouble spots. The same capability is available for large companies like
State Farm, which can track the issues of representatives in 50 states.
The eBSN rules require timely action on issues, and the customer can use
the same vehicle for appealing resolutions that are not satisfactory.

[Please click here to view the presentation](../MTAC0504/MTAC5_805.ppt)

**Improving the Drop Ship Process (New WG #87)**

**Anita Pursley/Cynthia Mallonee**

Anita Pursley commented on the stimulus for this new work group, a DOT
regulatory mandate that affected how a driver's hours of operation were
calculated. Included in that time measure is load and unload time, which
would cause costs to rise in the Postal Service environment. It also
affected management of transportation, such as the elimination of
three-stop trips. One counterbalance to this would be improvement in the
drop ship process, which is the mission of the work group.

The Postal Service shared with the work group several ideas for system
enhancements. One was a replacement for DSAS, the Customer Entry
Schedule System, which the work group will review in upcoming meetings.
Industry input is welcome. Another issue for the work group will be
developing an industry standard for pallet placards.

The work group has scheduled a site visit to better understand the
entire process of mail arriving by truck, including the unloading and
handling procedures. The work group plans to complete its work and
render a report by October 2004.

[Please click here to view the
presentation](../MTAC0504/MTAC%20820%20Session%20Presentation.ppt)

**Barriers to Address Quality (New Work Group #88)**

**Jody Berenblatt/Rick Arvonio and Jan Caldwell**

Jody Berenblatt explained that this new work group will work to identify
a weighted/prioritized list of barriers to the application of quality
addresses and barcodes. She invited MTAC members to submit ideas which
they can contribute by June 1.

[Please click here to view the presentation](../MTAC0504/mtac88.ppt)

**Electronic Enhancements to Certified Mail/Return Receipt**

**Pritha Mehra, Manager, Special Services**

Pritha Mehra discussed the coming service that will allow electronic
certified mail/return receipt verification of delivery. Available on
First-Class Mail and Priority Mail, it provides a signature proof of
delivery that is returned to the mailer. Since June of 2002, whether or
not a mailer uses the physical green card for certified mail, it is
possible to log onto the Postal Service site and obtain delivery
confirmation (those who use green cards enter the card number). Now the
service has been enhanced to include a return receipt electronically,
which provides an electronic facsimile of the recipient's signature. The
small mailer does not have to attach a green card to obtain that
signature. Large mailers can provide an electronic manifest and receive
the same electronic facsimile of the recipient's signature. A
convenience is the ability to store the receipt records in electronic
form indefinitely (although the Postal Service only maintains such
records for two years).

[Please click here to view the presentation](../MTAC0504/830mtac.ppt)

**Launch of BRM Website**

**Susan McMeen, Manager, (A) Product Management-Letters**

Susan McMeen recalled an earlier MTAC work group that recommended a
web-based system for business reply mail. That web site will be launched
in the summer of 2004, and will allow customers to learn about business
reply mail, to apply for BRM permits on line and pay appropriate fees
using a credit card or an established Centralized Account Payment (CAP)
account, assign a unique Zip+4 Code and design and produce camera-ready
(or electronic) art for BRM mail pieces. The customer may review mail
piece design, select a final design, and download the artwork -- and the
design is approved when it is acceptable for download. All of these
activities are accomplished in real-time, virtually eliminating the
delays inherent in the current manual system.

In the future, there will be an automated BRM accounting capability that
will provide full billing information and will eliminate any delays in
delivering the reply mail.

During discussion, there was a suggestion that large companies be
allowed to provide proof of payment electronically to each post office
providing BRM service. That would eliminate the need for the post office
to send a letter asking for confirmation and the need of the customer to
return a letter.

**Paper and the Environment**

**Robin Baker, Director of Communications**

**American Forest and Paper Association**

Robin Baker discussed environmental issues and campaigns about paper and
packaging materials by advocacy group that could affect major mailers
and/or their customers. A group of environmental activists gathering in
San Francisco in 2002 developed the Common Vision to Transform the Paper
Industry. The issues focus on recycling, minimizing paper consumption,
responsible fiber sourcing, reducing the cutting of old growth forests,
identifying a chain of custody for fiber, clean production issues and
looking at alternative (non-tree) paper fibers.

Ms. Baker described several campaigns. The tactics of the Paper Campaign
begins by enlisting strong advocacy support, including entertainment
notables, and then targets a specific retailer to develop an
environmentally positive purchasing policy for paper products. The
protests involve media publicity, store protests, and direct
negotiation. The first target was Office Depot, which recently issued a
procurement policy satisfactory to The Paper Campaign. The next strategy
for the campaign is to put pressure on other retailers, using the
precedent of the first target's response as leverage.

Another campaign on the horizon is Catastrophic Consumption, a group
that will target a major catalog producer (such as L.L. Bean, Williams
Sonoma, etc.) as the primary focus of attention. A third campaign is
focused on the paper production affecting a specific region, an area
known as the Cumberland Plateau in Tennessee. It is characteristic of
these campaigns to be liberal with the truth (such as blurring the
actual boundaries of the region targeted).

Ms. Baker described an advocacy group, called Metafore, that is a
collaboration of large-volume paper buyers (such as McDonalds,
Starbuck's, Time, Toyota), that makes every effort to be objective in
looking at business practices and transactions related to the paper
consumption required by their businesses. The organization is monitoring
feedback from a number of advocacy groups, is looking at developing a
"score card" for environmentally-responsible paper buying, and will
address food packaging and graphic design.

The American Forest and Paper Association has assigned a high priority
to developing guidelines for recycling, which has an increased recycling
goal of 55% (up from 50% last year). Other programs include education,
research, providing printed materials to members and others, collecting
and analyzing statistical data, providing speakers to interested groups,
and the development of a short video focusing on the importance of paper
in daily life. Finally, the Association sponsors the Paper Industry
Association Council, a group of 32 industry associations working on
environmental issues and providing tools for the promotion of
environmental responsibility, especially is the area of recycling.

[Please click here to view the
presentation](../MTAC0504/900mtac%20robin%20backer.ppt)

**First-Class Business Mail Measurement System (WG 83)**

**Ken Metroff/Maryellen Clarke**

Ken Metroff reported that this work group worked with Work Group #80
(Confirm) to identify possibilities for business mail measurement that
would serve the needs of the mailers and be compatible with what Postal
Service Operations could deliver. A recent meeting of the work group
achieved agreement on the format for the aggregate report, and developed
a statement of work. Ultimately, mailers participating would have to be
certified and would be assigned a prime Postal Service contact. There
would be an aggregate level reporting process that would, at some time,
be made available to the public. It would provide an area view on 1-, 2-
and 3-day service, including on-time, ahead of schedule and late.
Individual mailers can receive their own data from Confirm, maintaining
confidentiality, and the anonymous data from Confirm would be used to
create the service reports. Therefore, the reporting would be geared to
the destination side of the process. A number of mailers are in the
process of becoming certified and will participate in pilot projects,
the results of which will not be published. Once the bugs are worked out
of the process, the aggregate reports would be made public. Mr. Metroff
stated that the group would be successfully sunsetted. Later another
MTAC work group might be established to monitor and evaluate the
process.

During discussion, there was a suggestion that monitoring mail in
origin-destination zip code pairs would be more valuable, if some
process could be worked out to maintain confidentiality. This would be a
long-term objective.

[Please click here to view the
presentation](../MTAC0504/MTAC_83%20930on_May%20604.ppt)

**Consistency of Mailing Standards and Business Mail Acceptance (WG
#86)**

**Sue Taylor/Michele Denny and Sherry Freda**

Sue Taylor stated that the mission of this new work group is to identify
inconsistencies in mailing standards and business mail acceptance, and
to develop recommendations to harmonize those inconsistencies. The first
meeting resulting in identifying 15 areas of inconsistencies and five
issues were designated as high priority: CASS logic, DMM, MERLIN
acceptance, general acceptance and First-Class Mail versus Standard Mail
content. The work group decided that individuals on the team should take
the lead on these issues and assignments were made.

In regard to the CASS issue related to the inconsistency in required
logic used by vendors and mailers in building CASS-certified software, a
new work group (WG #88, Address Quality Enhancement) will be asked to
handle this issue.

DMM issues relate to three sub issues: The first, the difficulty in
locating information, especially since information about a single topic
may be located in a number of DMM locations; second, there is evidence
that DMM standards may be interpreted differently by different locations
and third, differing interpretations by customers versus the Postal
Service.

Concerning MERLIN acceptance, although there seem to be policies in
place, there is a need to communicate them to customers, and to deal
with national and local policies that may vary slightly (e.g., locally
there may be policies that are specific to the organizational and
physical structure of the unit).

The most important issue to those participating was the clarification of
First-Class Mail and Standard Mail content, especially with regard to
personal information that is included in the Standard Mail.

Finally, perhaps the most important potential contribution of the work
group may be the development of a communications model that will cover
mailing standards, policies and procedures. A preliminary communications
model was developed, identifying every possible means of communicating
information to mail industry stakeholders. Each vehicle will be
evaluated for advantages and disadvantages, and a report will be
developed. It is the work group's objective to have a meeting with all
Postal Service and industry stakeholders to discuss the model and the
communications vehicles assessed in the report. The next meeting is June
15.

[Please click here to view the
presentation](../MTAC0504/MTAC%20950Consistency%20Workgroup%20Presentation.ppt)

**Postal One! Postage Payment and Statements -- Approach and Design (WG
#84)**

**Larry Goodman**

Larry Goodman reported that the work group identified eleven issues, of
which eight have been evaluated -- shortages, multiple presorts,
combined mailings, postage adjustments from third parties, postage
adjustment due to presort changes (MERLIN), co-mailing using multiple
permits, co-palletization, return of postage statement data and
unlimited statement at separation . The reports on these issues prepared
by MTAC work group members have been useful in Postal One! The delay in
responding to these issues has been the focus of the Postal One! team on
the next software release scheduled for the end of June. This release
will allow replacement of the legacy system of permits.

The new release will have the capability of creating a true customer
identity, which allows a complete understanding of the customer's
mailing profile (locations, types of mail, etc.) It will eliminate a
major manual record system. This will allow a more effective payment
process that will serve all types of mailers, large and small. The new
release will also allow a much more extensive web interface for both
customers and the Postal Service.

Mr. Goodman briefly commented on the long-term goal of developing an
information system that will integrate data so that users can follow
mail from the initial process of verification and acceptance seamlessly
through the final financial posting.

Mail.dat was also discussed and Mr. Goodman stressed that the USPS
remains committed to listening to the needs of its customers.

**Parcel Delivery Performance Measurement Effectiveness (WG #82)**

**Chris Finley and Bob Fisher**

Bob Fisher summarized the objective of the work group -- to understand
the operations and procedures that affect measurement, identify issues
that affect performance measures, to prioritize those issues and to
develop recommendations including a process review mechanism. New
reports have been delayed pending Data Warehouse transition. One
important issue is whether the packages are actually with the 8125 when
accepted, since that affects a true start-the-clock measurement. A
manifest arrival quality report will be implemented in June, and some of
the current reports will be improved. It is clear that DDU and BMC
service has improved, and the work group has agreed that a key function
is a dedicated Parcel Service Coordinator who fully understands the
process. Hopefully, all of the work group products will be in place by
the fall mailing season.

A national DDU survey was conducted to verify arrival of pieces versus
the data on the 8125. The survey revealed variations in performance at
the district level. Also, the service measurement is incomplete since it
is applied to only 63% of packages received; the rest escape measurement
for various reasons (mainly failure to scan, and the USPS option to
exclude a delivery that is incomplete (over or under) versus the 8125.
The Postal Service has made parcel service part of the National
Performance Assessment and holds field managers accountable. However,
some of the parameters (like the failed pieces that do not arrive with
an 8125) are not under the field manager's control, and some adjustment
may have to be made in the internal measurement process.

The work group has developed a list of issues to address in the future
-- arrival quality measurements and their consequences, improved report
design, reports to support the 8125 scan performance, data sharing and
establishing communications processes at all levels.

**Flat Mail Preparation Optimization (WG \# 81)**

**Joe Lubenow and Sharon Daniel**

Joe Lubenow discussed several projects. The work group addressed a
simplified mail preparation process for the AFSM 100, a process that
would bypass the small parcel and bundle sorters (SPBS) and the
automated package processing system (APPS). That would suggest minimal
packaging (elimination of bundle shrink-wrapping and strapping, use of
tubs instead) and changes in the way mail is placed on pallets for
easier unloading. The advantages -- mailers would save on materials, the
Postal Service would handle the mail less which would reduce labor
input. The simplified mail preparation process is not intended for the
next rate case but will be considered after that time frame.

There was a proposal to develop different preparation procedures for
packages that would not ordinarily be routed to the AFSM 100 for
incoming secondary processing to carrier routes and a Federal Register
Notice has been published, with comments required by May 26.

The work group looked at APPS issues, including the visibility and
readability of the address block (possibly obscured by certain
shrink-wrapping or strapping techniques), and Postal Service-initiated
changes in the optional endorsement line (OEL) parameters, which are
under review now and will be the subject of a Federal Register Notice
some time in the future. There is an engineering assessment of poly wrap
-- clarity, effect of seams and other manufactured obstructions. The
issue list also includes concerns about increased costs of materials.

Mr. Lubenow noted that the terms "packages" and "bundles" have multiple
definitions in the DMM and in common usage in the mailing industry, and
the work group is looking at clarifying the issue. A proposal is being
developed that might redesignate units of mail pieces that are strapped
or wrapped to a presort destination as a "bundle" instead of a presort
package so that the reference to parcels and "packages" in the DMM will
be clear (e.g. as mailed under Parcel Select or Standard Mail parcels or
packages subject to the residual shape surcharge). There appears to be
no impediment to making this change.

Finally, the work group discussed the cost-based rates market research.
Cheryl Beller described the quantitative market research. The Standard
Mail interviewing process will be first, because the Postal Service is
not putting out Periodicals research rates until they get a better feel
for what will happen at the PRC with the Time Warner complaint. However,
the contractor will get ready for the Periodicals interviews and
research should be on schedule for the rate case. The research can move
forward, however, for Standard Mail Peter Moore Associates is developing
a number of scenarios to illustrate potential outcomes compared to
baseline (current procedures) using the Standard Mail market research
rates that will be used to obtain mailer feedback regarding how their
behavior would change (or not) in response to these rates.

[Please click here to view the
presentation](../MTAC0504/1055FlatMailPreparationOptimizationMay04.ppt)

**Enhancing Confirm (WG \# 80)**

**Paul Bakshi and Martin Bernstein**

Paul Bakshi discussed the Confirm certification process, which will
generate sufficient data to develop service performance results. A guide
to the process has been developed for mailers and Postal Service
employees. Three mailers are being certified for the initial pilot
tests. The certification process begins with a site visit to look at the
mailer's operational procedures and to adjust any processes that do not
conform to the Confirm requirements. The mailer's operations are
continuously monitored to insure quality compliance.

The site visits have been useful in fleshing out the certification
process and helping mailers to establish consistent processes and
eliminate errors that would cause conflicts. The Postal Service has also
been able to modify procedures based on some of the findings in the site
visits.

There are shared reports that include the mailer's own confidential
data, delivery versus service goals, and in home window delivery
results. Enhanced training for Postal Service personnel has been
developed for on-site sessions and web-based access.

Mr. Bakshi noted that marketing research has been completed on bundle
tracking of carrier-route presorted packages not run on automation
equipment. The packages are scanned by the carrier, relying on bundle
slips provided by the mailer. The final product is being developed -- a
basic service report of the raw scan data, and a premium service report
that includes both the scan data and shared reports. The draft reports
are now being reviewed by selected mailers to ensure that they contain
appropriate information. Costs for the service are being calculated and
a rate case may be filed before the end of the year.

[Please click here to view the
presentation](../MTAC0504/MTAC-1115ConfirmUpdate-May04-General%20Session.ppt)

**Mail Irregularity Feedback (WG \# 55)**

**Pat Killeen, Susan Redman and Joyce McGarvy**

Susan Redman discussed the results of the pilot tests completed in
November 2003. They stimulated a number of upgrades and enhancements,
including the issue of the new J2EE technology. The program, now called
eMIR, will be launched in mid-summer with a national training program,
with full implementation in the fall. Current activity involves
developing a communications plan to connect business mail customers and
the involved Postal Service divisions -- Operations (mail processing
facilities), Marketing (Business Acceptance Entry Units, Sales and the
Business Service Network), and Information Technology (the Help Desk).

Current training is targeted at the BMEU level and the mail processing
facilities where the reports will originate. The format is web-based,
on-site presentations are planned, and a training video will be provided
(the latter was shown at the end of the presentation). The pilot tests
demonstrated that the training has a positive effect -- non-resolution
of issues based on lack of actionable information was reduced from 21%
before the November test to 8%, and the quality of the reports related
to resolution improved.

After the video was shown, Joyce McGarvy commented that mailers could
expect to begin receiving notifications in the August time frame. She
added that the work group should be "sunsetted" before the next MTAC
meeting.

[Please click here to view the
presentation](../MTAC0504/mtac%201135.ppt)

## Adjournment 

## 

## The meeting was adjourned at 11:30 a.m.