**Minutes of the**

**Mailers\' Technical Advisory Committee**

**February 4 - 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**

Bob O'Brien called the meeting to order, and welcomed members and
guests. Marty Emery echoed the welcome and introduced new MTAC members:

Brenda Palmer, Pharmaceutical Care Management Association (PCMA)

Heidi Gioseffi, U.S. Chamber of Commerce

Liz Treanor, National Retail Federation

Steve McKinnon, representing the Saturation Mailers Coalition

Randy Stumbo, representing the Gravure Association of America

Scott Lorenz, representing the Magazine Publishers of America (MPA)

Val Scansaroli, representing the Agricultural Circulation Association

Pat McCarthy, representing the National Association of County Recorders,

> Election Officials and Clerks
>
> Wess Sparkman, representing the National Catholic Development
> Conference
>
> Jack Kirkwood, representing the Recording Industry Association of
> America

John Wargo presented a special recognition to John Cochran, Jr. retiring
and attending his last MTAC meeting after 55 years of service to the
mailing industry -- 45 years with the U.S. Postal Service and 10 years
most recently with MBNA.

**USPS Operations Update**

**Pat Donahoe**

**Chief Operating Office and Executive Vice President.**

Pat Donahoe commented on the focus the Postal Service has placed on
service during the past few years that has resulted in a steady
improvement in measured service categories, including business and
remittance mail. The Business Service Network has also continued to
provide more rapid response times and a closer connection with
customers. Currently there is focus on some of the internal operations
issues related to the retail areas (like customer wait time) and the
area of mail acceptance, also looking at minimizing wait time.

Mr. Donahoe added that, as effective as cost reductions have been in the
past, there continues to be progress in improving productivity,
especially in supplies and services, service contracts and various
operational areas. One success has been in reducing the illness/injury
rate and vehicular accidents -- which benefits those employees involved
as well as reducing costs. He noted that, during the past several years,
employee satisfaction has been measured and has been steadily improving.

Noting that delivery costs comprise about 42% of total costs, the Postal
Service will be focusing on that area. One early step was a delivery
symposium, which included about 2,000 Postal Service employees at all
management levels, to look at opportunities for improving delivery
efficiency and productivity. APPS and PARS will contribute, as well as
some important materials handling innovations. Programs that are high on
the list include address quality, which relates to barcode quality. The
challenge is to reach 85% delivery point sequencing by the end of 2004,
and 90% next year. Finally, a long-term program is delivery point
packaging (DPP), which demands reaching the high objectives above.

During discussion, Mr. Donahoe commented on the Ricin incidents, noting
that lessons from the anthrax situation pointed to the importance of
good employee data (address and phone number) to enhance communications.
The current sensing equipment cannot now detect Ricin, but they can be
fitted to do so. He commended Postal Service employees, who have dealt
with over 30,000 incidents resulting in facility evacuations, close
downs and workflow interruptions. The unions have also been very
supportive of the required responses to the incidents.

**USPS Financial Update**

**Richard J. Strasser, Jr.**

**Chief Financial Officer and Executive Vice President**

Richard Strasser announced that this was his first quarterly report
under its new monthly reporting format, transitioning from reporting 13,
28-day, accounting periods to 12 months.

Despite revenue and mail volume being less than in Quarter 1 2003, the
Postal Service posted a net income of \$1.8 billion. Revenue of \$18.2
billion, was 1.0 percent less than the same period last year. Expenses
grew only 1.7 percent despite rising costs of health benefits, fuel and
the expanding delivery network.

Total mail volume of 54 billion pieces was down 0.3%.. First-Class Mail
decreased 0.7%, far less than the 3% decline in the previous year.
Standard Mail was up nominally, 0.2%. Delivery points are up 1.7 million
since the first quarter 2003 and increased over 400,000 since September
30, 2003.

The efforts to constrain growth in expenses continue to pay dividends
with expense growth of \$272 million, less than half of the \$664
million increase included in our plan. Over 10 million work hours were
reduced in Quarter 1 and career complement dropped to 719,850 employees.
This is a reduction of 25,276 employees since the same period last year,
including a decrease of over 8,000 employees since the end of FY2003.
These results assisted in improving total factor productivity by 1.7%.

Mr. Strasser indicated that the revenue and volume trends are consistent
with projections that were included in the Postal Service's Financial
Plan. He added that he expects these trends to continue into Quarter 2,
after which mail volumes in Quarter 3 and 4 are expected to increase
above last year's levels.

During discussion, Mr. Strasser commented on the Civil Service
Retirement System issue. First, the Postal Service is on record that the
Treasury, and not the Postal Service, should pay retirement costs
related to military service. The CSRS Reform Act transferred these costs
to the Postal Service but provided an opportunity to reconsider this
transfer. Second, the Act required that OPM determine apportionment of
costs related to employee retirement when an employee served both the
previous Post Office Department (until 1971) and the current Postal
Service. Rather than using an allocation methodology related to years of
service in each organization which OPM previously utilized, OPM
developed an alternate formula that increases the Postal Service
obligation. In accordance with the Act, the Postal Service has submitted
a request for reconsideration to the Board of Actuaries of the Civil
Service Retirement System for final decision.

Finally, he commented on capital investment, noting that there has been
no restriction on capital expenditures that produce a return on
investment. There has been less investment in facilities. A new
priorization process to evaluate replacement of aging facilities is now
in effect. However, requirements for new space, mainly as a result of
our expanding delivery network, has diminished as a result of the
impacts from automation.

[Please click here to view the
presentation](../MTAC0204/Rich%20Sstrasser%201235.ppt)

**Marketing Update**

**Anita Bizzotto**

**Chief Marketing Officer and Senior Vice President**

Anita Bizzotto described several new approaches to benefit customers.
Customized Market Mail, although a little more costly than Standard
Mail, has proved effective for some mailers with much higher than
average response rates. Thus far 39 mailings of over half a million
pieces have been completed. The new Parcel Return Service, with one
customer participating, has produced \$3 million in revenue, returning
over a million packages. The co-palletization test has processed over 17
million pieces of mail, eliminating over 350,000 sacks. Use continues to
grow and, at the present rate, it would result in 36 million pieces
palletized with the elimination of 720,000 sacks annually.

A product developed for another market, small businesses, is the
pre-paid Priority Mail envelope, sold in small lots of five on the
Internet for \$3.65 each. A recent large order (for 30,000) suggested
that there may be an application in the larger commercial market as
well. Ms. Bizzotto commented that there would be an effort to facilitate
payment through CAPS or other means for larger accounts. Finally, the
Postal Service has developed a special "Mili-pac" that includes
instructions on how to properly address mail to servicemen attached to
commands anywhere in the world.

Ms. Bizzotto described several initiatives to make it easier to interact
with the Postal Service -- ease of use services. Customer Connect is a
program that encourages carriers to expose customers to services
available through the Postal Service. There has been excellent response
with over 5,000 leads that have produced over \$10 million in revenue
that might have been directed to other commercial services. Another
carrier-related service is carrier pick-up -- the customer can contact
the carrier online, and a pick-up is made the following day at no
additional cost to the customer. The service is exceptionally
personalized since the customer is communicating directly with the
carrier and can provide specific instructions or requests. The service
is currently limited to specific city routes.

Traffic at usps.com is increasing, up 38% in the last year, and revenues
from online transactions have increased over 120%. Finally, Customer
Gateway is another Internet-based service that consolidates most of the
services which commercial customers use on one site. The customer will
soon be able to customize the site to make those services even easier to
access.

Ms. Bizzotto described several outreach efforts. The Executive Mail
Center Manager program was piloted last year, a concentrated training
program of eight modules first offered at the Norman, Oklahoma facility.
It was an intense one-week course which included a \$1,500 tuition. It
became clear that the program had to be offered locally, and it has been
designed to be offered at various sites more convenient to the
customers.

There is a direct mail course available (Direct Mail Made Easy) to small
and medium-sized businesses that, for a \$69 tuition, trained 2,800
customers and the goal for this year is a similar enrollment. There is a
program under way to improve the opportunities available through the
Postal Customer Councils. It will identify best practices and
communicate them nationally. There will also be membership drives to
encourage customers to participate in the PCC program.

There has been an effort to work with vendors who provide services and
equipment to small businesses. An early pilot placed some of the vendors
in selected retail sites to interact with customers as they visited the
post office. There will be continued efforts to identify ways to better
inform business customers who cannot be reached by the Postal Service
sales organization.

The Postal Service offers professional certificates to individuals who
complete 4-6 workshops in various specialties (mail center professional,
mail piece design, mail center safety and periodicals). Over 300
certificates have been awarded at the Postal Forum, and the program will
be extended to the PCCs. There is a program on Merlin available to
customers willing to travel to the Norman facility. There is a three-day
training program on periodicals offered at the Norman and Potomac,
Maryland facilities and it can also be offered at a customer's site by
prior arrangement. Sixty customers have completed the course so far.
Finally, there is a short course on mail piece design available, and
2,300 customers have been certified to date.

Steve Kearney briefly discussed the co-palletization test, explaining
that a filing is planned with the PRC to create incentives for the
heavier publications with high editorial/low advertising content. He
commented on the ongoing effort to improve consistency of service.
Inconsistencies may have been created by unique interpretations applied
to specific mail pieces. One step already taken is to centralize appeals
on First-Class/Standard Mail issues in one office (previously handled in
the Rates and Classification Service Centers). Another concept under
test is a single national ruling for individual national customers.
There will be a training session in May for all acceptance and
classification employees, which will be followed with regular quarterly
training updates. There will also be an effort to clarify the existing
language that describes what is First-Class and what is Standard Mail.
There will also be meetings with various mailer associations. An MTAC
work group will be created to address the issues identified.

[Please click here to view the
presentation](../MTAC0204/Anita%20115pm.ppt)

**Corporate Automation Plan -- Phase 2**

**John Rapp**

**Senior Vice President, Operations**

John Rapp briefly reviewed the history of automation since the first
corporate automation plan (CAP) was published in 1989, a plan that
focused on letters, flats and packages. Letter automation was
exceptionally successful, leading to the current level of 75% of letter
mail sequenced to delivery point. On the other hand, technology limited
progress in automating flats and packages. However, with the arrival of
the AFSM 100 machine in late 2000 flats productivity began to improve
significantly. Operational performance for flats distributed in plants
over the last three years improved from 557 pieces per hour to almost
1,200, due to the machine's speed, capacity and efforts to standardize
flats processes in plants. As a result of moving flats "up the ladder"
from manual and mechanized operations nearly eighty percent of flats in
plants are now sorted on the AFSM 100, the Postal Service's most
efficient flat sorter. These actions reduced flats distribution cost in
plants from \$50 per thousand pieces in 2000 to about \$26 per thousand
at the end of 2003.

CAP Phase 2, to be issued this spring, continues to include plans for
further automation of letters, flats and parcels to take advantage of
technological improvements, but also focuses on bundle, tray and
container processing as well. It will also address automation related to
delivery, transportation and tracking and scanning. To support letter
mail automation, the plan will add video facing modifications to AFCS
cancelling systems to reduce cancellation rejects, replace aging MLOCRs
with more efficient systems, improve image processing software, and
deploy PARS for intercepting and processing undeliverable-as-addressed
mail. Flats sorting will be enhanced by adding feeder modifications,
tray handling systems and auto-induction devices (for the AFSM 100). The
Automated Package Processing System (APPS) will replace first generation
SPBS machines. APPS offers high speed automated sortation from barcodes
or OCR video image lift. The APPS machines will automate bundle handling
through use of barcoded optional endorsement lines (OELs) as well.

CAP Phase 2 includes plans to improve automation of trays, including
automatic systems to sleeve and unsleeve trays. There will be programs
to automate container processing and tracking. Finally, the plan
includes using en route scan data to enhance delivery tracking and
CONFIRM. The Enterprise Data Warehouse will consolidate data from
operations, marketing, finance and human resources in one database that
will make it easier to share information cross-functionally.

The goal of the Intelligent Mail program is to develop an
information-rich code for each mail type that would enable end-to-end
visibility. CAP Phase 2 incorporates Intelligent Mail strategies to
develop a system that uniquely identifies mail, to deploy enabling
infrastructure and to find new methods to enhance address quality. The
information from this system would be used to improve operational
management and provide customers with information that is valuable to
their business.

CAP Phase 2 will rely on MERLIN to ensure the quality and accuracy of
presort mailings. MERLIN will be checking a wide variety of items
including Walk Sequence Accuracy, Barcode Readability, Tray Label
Accuracy, and Address and Barcode Accuracy. CAP Phase 2 incorporates and
supports the PostalOne! system. This program automates business mail
acceptance for both business mailers and acceptance employees by
providing the ability to electronically create, submit and store
documents.

CAP Phase 2 includes longer term plans to expand the reach of automation
to include the delivery function. If research and development efforts
are successful, the selection of either Delivery Point Packaging or the
Flats Sequencing System could enable the Postal Service to move large
volumes from manual carrier casing to automated sort.

Mr. Rapp underscored the importance of industry participation in the
process that, in the past, has resulted in many improvements. MTAC and
the USPS will continue to work together on issues of common concern.

[Please click here to view the
presentation](../MTAC0204/John%20rapp%20200pm.PPT)

**Hill Response Briefing**

**Linda Kingsley**

**Vice President, Strategic Planning**

Linda Kingsley commented on the Postal Service plan, prepared in
response to a Congressional request, to provide a capital investment
plan (related to the CSRS legislation escrow account) that would include
a rationale for the long-term viability of the Postal Service. That plan
was developing taking into consideration the current environment, the
anticipated sources and uses of funds, and financial and operational
management considerations.

Concerning the environment, the Postal Service is experiencing declining
First-Class Mail volumes, increasing delivery points, and some
uncertainty regarding forecasting. Work sharing has increased the amount
of mail being entered at or near destinations, which reduces the need
for some front-end operations (facilities and transportation).

The Postal Service submitted a detailed draft plan to the OMB that
includes about \$19 billion in anticipated capital investment, mainly
for further automation, transportation (maintaining the current fleet),
retail opportunities (point-of-service equipment and automated postal
center kiosks), facilities and general support (mainly IT and emergency
preparedness). Although funds become available through deferring
investments in new facilities, sale of assets and borrowing, the major
portion of capital investment funding derives from depreciation.
Opportunities to sell assets are limited, and borrowing is capped by
regulation to about \$3 billion annually,

The report also discussed the Postal Service's successful cost reduction
program, improvements in productivity, and standardization of processes.
Existing equipment relates to the mail shape and should not have to be
replaced because of any changes in those shapes. Facilities are
relatively new (averaging less than 30 years), and the need for space
overall has declined. Current facilities are sufficient and no major
sales are contemplated. The Network Integration and Alignment model,
currently being developed, will serve to allow decisions to be made
regarding a multiple shape-based infrastructure. But if that route were
taken, it would be an incremental, phased approach that would continue
to utilize much of the current infrastructure.

Ms. Kingsley noted that the report included a discussion of the positive
trend in workforce reduction, including the important fact that 110,000
employees are currently eligible for retirement, and 125,000 more will
become eligible by 2007 -- almost 38% of the current workforce. There is
also the flexibility offered by a large number of part-time and casual
employees.

The report commits to achieving a billion dollars in savings, improved
service levels, and generation of funds through traditional means. It
states that the escrow should not be changed. The report maybe made
public when Congress receives it and indicates a final disposition.

[Please click here to view the
presentation](../MTAC0204/300%20linda.ppt)

**New MTAC Work Group**

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

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

Bob O'Brien announced the new work group which will look at the Postal
Service goal of providing consistent interpretation and application of
mailing standards and business mail acceptance procedures. He added that
the work group will identify areas of inconsistency, recommendations to
improve consistency and develop a process for ongoing cooperation
between the mailing industry and the Postal Service on consistency
issues. The first meeting is scheduled for February 25. Michele Denny
and Sherry Freda responded to several questions from the group. Michele
and Sherry urged MTAC members to contact the Industry Work Group Leader
Sue Taylor to indicate their interest in working with this group.

**MERLIN -- Address Accuracy Verification**

**John Sadler**

**Manager, Business Mail Acceptance**

John Sadler reported that Merlin has been fully deployed. He stated that
barcode readability has declined slightly, from about 94% to 93%,
perhaps because of implementation in the Western and Pacific areas.
Presort continues to be about 2% with short paid First-Class Mail being
less than a percent.

Mr. Sadler expressed appreciation to the co-chairs of work group #85,
Wanda Senne and Marty McGuire. The objective was to develop a clear
understanding of the process of implementation and to develop a joint
communication plan. A testament to the work group's efforts is the fact
that 99% of the 35,000 mailings tested in the last few weeks are
passing. There have been some incidents of use of 0000, which is not a
valid code and does not exist in the address management database, and
the use of 9999 for general delivery. There have been 22 instances of
0000 and 17 instances of improper 9999 applications. Nonetheless, the
overall results have been excellent.

A new MTAC work group will be formed with regard to Phase 2 that will
allow a sufficient forum for discussion of the next issue, fineness of
depth of code.

There was a brief discussion about an industry request that certain
parameters be lowered (parameters are already below the DMM). There is a
test underway to determine whether or not the parameters identified
could be relaxed without affecting the read rates.

[Please click here to view the
presentation](../MTAC0204/sadler%20340.ppt)

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

**Dan Minnick and Larry Goodman**

Larry Goodman reported that *PostalOne!* is on schedule, and trainers
are being qualified to train the approximate 6,000 employees who will be
responsible for *PostalOne!* On March 1, three districts will move from
the legacy permits to the *PostalOne!* System, and by mid-June a release
will allow national transformation to the new permit system.

Mr. Goodman introduced Dana Nacke, who discussed the Web service that
allows one application to communicate (exchange data) with another, via
the Internet, server to server. The *PostalOne!* Web service supports
submission of postage statements and other postal documentation that
supports verification, acceptance, payment, and induction processes in
the business mail area. The Web service will be tested through June,
after which customers may elect to interact with the Web service. The
work group has identified areas of Web service interaction. Future
releases will support the electronic 8125 and allow application for a
permit, deposits and fee payments, all through the customer's own
application.

Dan Minnick briefly discussed the progress of the work group, noting its
purpose of supporting the Postal Service in developing strategies,
activities and processes to achieve complete support of electronic
postage payment statement and payment processing for all classes of
mail. The work group will focus on the electronic process, with an
emphasis on including all stakeholders in the process.

There have been two meetings, at which a number of general "needs" were
identified. Of those the following were discussed to the point of being
able to define specific functionalities: shortages and spoilage,
combined mailings, methods of affixing postage, multiple presorts in one
Mail.dat segment, postage adjustment for additional postage from a third
party, co-palletization, co-mailing using multiple permits, multiple
presorts on one statement, and change in presort postage adjustment. All
of these previously involved major human participation, all of which
must now be integrated into an electronic process.

Mr. Minnick invited individuals interested in any of the issues to
become involved in the work group.

[Please click here to view the
presentation](../MTAC0204/postal%201%20355.ppt)

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

**Ken Metroff and Maryellen Clarke**

Maryellen Clarke, noting that business mail is not included in the EXFC
process, stated the need for a business mail measurement system, which
the work group was formed to consider. The work group has developed a
requirements document that specifies that mailers will be certified to
enter mail, which will then be scanned for start- and stop-the-clock
data, which will then pass through a quality control process to insure
that the data is valid. After this step valid data will go to the
"clean" database for construction of reports. Problem data will go to
the mailer and USPS for resolution.

The next steps will be to finalize the requirements document, gaining
work group approval and developing next steps.

[Please click here to view the presentation](../MTAC0204/414%20ken.ppt)

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

**Chris Finley and Bob Fisher**

Bob Fisher reported that the work group intends to understand the
operations and procedures related to parcel delivery, and to identify
issues that impact delivery performance. Because of the peak mailing
season the work group has delayed activity, but it will meet on February
24^th^ to consider available reports, quality metrics, start-the-clock
process and communications. Recommendations should be developed well
before the next fall mailing season.

[Please click here to view the presentation](../MTAC0204/435%20bob.PPT)

**Minutes of the**

**Mailers\' Technical Advisory Committee**

**February 4 -- 5, 2004**

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

**Benjamin Franklin Room**

**Washington, D.C.**

**Second Day**

John DePiazza called the meeting to order. He reminded members to remit
annual dues, noting that every member met dues obligations in 2003.

**Mail Technology Study Report**

**Jeff Freeman**

**Manager, Mail Technology Strategy**

Jeff Freeman commented that the Mail Technology Study was initiated to
determine industry capabilities related to printing the intelligent
barcodes under development, and identify trends that might enhance those
capabilities. The Study included site visits to major mailers, and
surveys sent to 311 sites in all industry segments, covering all mail
types. The survey revealed that 85% of respondents believed that the
intelligent mail technology would be beneficial, and about a third
believed that the advanced barcodes could be used in the internal
management of their operations (about half already use barcodes
internally).

The survey showed that about 63% of mailers used barcode printing
equipment (mainly inkjet) capable of 300 dpi (although many also used
240 dpi equipment, especially on high speed printing equipment). Most
print PostNet codes, which indicates a potential for moving to the
4-state code. About half of the sites indicated an intention to replace
printing equipment within five years, and about a third will replace
readers in the same period.

Although not included in the survey, there is a need to understand the
inverse relationship of print quality to throughput speed, the possible
need to change processes, and interaction of ink with paper (the
possibility that ink will "spread" on certain papers, reducing
resolution).

Although not fully analyzed, the survey data indicate that there is
broad interest in a more intelligent barcode and the technology is
available to print those barcodes.

[Please click here to view the presentation](../MTAC0204/805day2.ppt)

**Intelligent Mail and Address Quality (IMAQ)**

**Gary Reblin**

**Manager**

**Jan Caldwell**

**Manager, Address Quality**

Gary Reblin reiterated the vision of a single barcode that will uniquely
identify each mail piece. The first step in adopting the vision was an
assessment of mailer capabilities. It was clear that a 2D barcode would
present significant challenges to broad usage, although the 4-state code
might be an entry possibility for the inkjet printer.

Several initiatives are under way. One is the development of an AFCS-IBI
detection device that would handle the red ink on metered mail, revenue
protection, and would lead to an ability to read the information-rich 2D
barcode. That technology would be incorporated into the hand-held
scanners that carriers use to process mail. Letter sorting equipment
contractors have been directed to upgrade readers to handle the 4-state
code. There is also a program to scan flats using a new Flats ID Code
Sorter that can handle the 4-state code.

Mr. Reblin discussed the Planet ACS Program, which depends on the PARS
equipment, which is currently in operation in one site, Lake Mary,
Florida. The vendor, Siemens, is working to integrate Planet ACS
capability into the PARS equipment. The system will eliminate the need
for a separate participant code/optional endorsement line (OEL) since
sender identity can be incorporated into the barcode. Once available
throughout the system, candidate UAA/forwardable mail will be routed to
automatic routing equipment located at each site which will provide an
electronic notice back to the mailer. That will eliminate the current
labor-intensive process. There will be a pilot test in the spring/summer
timeframe, working with one mailer, after which a plan for expansion
will be implemented. Regional offices will be established to collect and
process this mail to provide the capability for a gradual expansion of
participants.

[Please click here to view the presentation](../MTAC0204/835day2.ppt)

**Product Redesign**

**Don O'Hara**

**Manager**

**Product Redesign**

**Bob O'Brien**

Don O'Hara focused his comments on cost-based rate structures. First, he
discussed a complaint filing by Time Warner and others, which requires a
Postal Service response within 30 days (due February 11). The complaint
proposes an alternate cost-based rate structure for periodicals.
Although the Postal Service has been considering a rate-based concept,
this case is different in that it includes a change for editorial
content (from unzoned to zoned), a more granular piece-rate schedule,
more presort levels, and a new DBMC discount. The Postal Service
response will be available after it is submitted to the Postal Rate
Commission on February 11.

Mr. O'Hara discussed initiatives that do not require Postal Rate
Commission (PRC) review. There is a proposal to raise the Standard Mail
5-digit bundle requirement to 15 for pieces not greater than 5 ounces
and thickness not greater than ¾-inch (for flats that are ASM
100-compatible). A Federal Register Notice was published and comments
focused on making the scheme optional until the effects on costs and
service are known.

A second proposal relates to co-palletization and co-mailing (bundles),
allowing a mailer to combine periodicals, BPOM flats and Standard Mail
on a single pallet or bundle. All mail would receive Standard Mail
service (requiring drop ship appointments). Mailer response has focused
on the fact that current rates offer little incentive to participate,
and the scheme should allow mailers to co-mail all bundle levels and to
construct ADC pallets. Postal Service Operations has expressed concern
about the ADC pallet proposal. Mailer feedback is invited on two
options: 1) mixed classes permitted at all bundle and container levels
if ADC pallets are accepted, and 2) mixed pallets allowed only at SCF or
finer levels and bundles and containers at ADC level separated by class.

Mr. O'Hara discussed issues that would require PRC review, including the
need to retain current weight limitations (for ergonomic reasons); a
lower limit on bundle size (since a very light two-piece bundle might
actually increase handling costs); and a limit on how much "inefficient"
preparation a mailer is allowed (e.g., a mailer might be willing to pay
for a prep -- like a 10-piece sack -- that could result in significant
and costly handling situations). He discussed the ramifications of the
decision process related to creating the 5-digit bundle, demonstrating
the many considerations related to both pure postage costs and other
issues, such as service. Similarly, he discussed the decisions related
to taking advantage of container options.

In conclusion, Mr. O'Hara stated that the quantitative market research
should be completed and analyzed before the end of May, in time for the
beginnings of the next rate case. He stated that Peter Moore would be
able to evaluate the effects of the rates on an individual mailer's
requirements.

For those not intimately involved in the technical aspects of mail
preparation and the rate structure, Mr. Moore offered a succinct
description of the considerations related to a change to cost-based
rates: Mailers have traditionally put bundles together, then looked for
the proper sack or pallet. In the new environment, the first question is
what container is most appropriate for the way the mail will be
processed; then pieces are put together to match the container
requirements.

[Please click here to view the
presentation](../MTAC0204/day%20202-05-04%20905.ppt)

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

**Joe Lubenow and Tony Mazzei**

Joe Lubenow reported that the work group has reviewed a simplified mail
preparation proposal related to the introduction of the AFSM 100. A
number of internal changes occurred, but the Postal Service observed
that some aspects of preparation caused problems -- bundling processes
in particular. USPS proposed that mailers reduce the amount of
strapping, avoid shrink-wrapping, avoid counter-stacking and place
pallets in a sequence specified by the Postal Service to facilitate
unloading to the sorter. Mailers would then save materials and less
labor would be required in the sorting process. Mailers expressed
concern about handling lightly wrapped bundles, pallet integrity and a
possible need for new software. The work group will continue to monitor
the process.

Ashley Lyons attended the last work group meeting to discuss
co-palletization related to high editorial content publications, what he
called a niche classification (that pertains to palletization in lieu of
sacks) that would require Postal Rate Commission (PRC) action.
Preliminary specs indicate that the publication would have to weigh at
least nine ounces, contain not more than 15% advertising, with a limit
on circulation.

Mr. Lubenow mentioned another issue, flats palletization, noting that
the Postal Service is looking at placing carrier route mail on the
bottom of the pallet and other flats on top, separated by a slip sheet..
Two Indianapolis printers are testing the concept. The work group had
looked at a number of APPS issues, including the visibility
(readability) of the address block, bundle integrity and the possible
need for a transparent banding strap to reveal covered information.

A new proposal on optional endorsement lines (OELs) was distributed
based on a 30-character line, with inclusion of APPS information and ACS
codes. Tests will be made before final decision.

There was a presentation on co-palletization and co-mailing, and issues
included those discussed above -- mixed pallets receiving Standard
service, need for drop ship appointments, and the need for ADC pallets
(although the industry would not want to split mailings as proposed).
The next step is a survey of mailers.

Finally, Mr. Lubenow noted that the work group briefly discussed revised
rules for periodical firm bundles on pallets, three-digit schemes, the
continued stabilization of five-digit scheme processes, and the full
merging of non-AFSM 100 flats on pallets.

[Please click here to view the
presentation](../MTAC0204/day%202%20955.ppt)

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

**Martin Bernstein and Paul Bakshi**

Martin Bernstein reported that the new reports initiated in November
2003, have been enhanced in response to a number of issues noted by
users, including an effort to allow access to the reports in a timely
way (less than 3 minutes). There was review of the certification
process, which has been completed on the initial mailer involved. Others
will follow, including a reseller in March, so that by July all mailers
interested can apply for certification.

Mr. Bernstein noted that pre-shipment notification is important to the
overall process, and the system has been modified to allow update of all
elements of pre-shipment notification.

There is a draft web-based training program in development. This
training consists of two sessions to cover Confirm service performance
and mail tracking reports, and Confirm quality and diagnostics reports.
The course should be available in the spring.

Finally, Mr. Bernstein commented on the bundle tracking pilot tests,
which will include standard facing slips and barcodes, and a standard
scan process. Since the scan is made manually, there is a cost related
to the process and it would be included in a future rate case filing.

[Please click here to view the
presentation](../MTAC0204/day%202%201015.ppt)

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

**Pat Killeen and Susan Redman**

Pat Killeen outlined the two earlier pilot tests and the recently
concluded expanded pilot test conducted on mail irregularity feedback
and Susan Redman described the results. She noted that 569 reports were
filed listing 956 errors that were mainly in the bundle package area
(57%). The earlier pilots revealed errors primarily in the mail piece
area. Of the total reports, 479 were routed to BMEUs of which 60% were
resolved (usually with a contact with the mailer to discuss the issue).
Of the number not resolved, over 80% were not resolved because it was
not possible to identify the mailer (mainly because company permits do
not indicate the mail entry point). This once again raises the issue of
a mailpiece ID.

Ms. Redman stated that the pilot report draft would be available soon.
Some of the findings include improving the data collection process and
the need to inform employees of the proper information collection
procedures. Also enhancements need to be added to the data entry and
resolution process and the need for an improved interface between Postal
One! and the iBSN .

Now that the pilot tests are completed and the results have been
reviewed. A deployment pilot is planned for early spring, after which
the national training will prepare the system for full deployment in
June 2004.

[Please click here to view the
presentation](../MTAC0204/day2%201035.ppt)

## Adjournment 

## 

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