**Highlights**

**Mailers\' Technical Advisory Committee**

**August 17-18, 2005**

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

**Benjamin Franklin Room**

**Washington, D.C.**

**First Day**

###### Wednesday, August 17

**Welcome/Introduce New Members**

**Susan Plonkey, Postal Chair**

**Bob O'Brien, Industry Chair**

Ms. Plonkey welcomed MTAC members and guests and recognized the MTAC
retirement of Ken Metroff by reading a letter of appreciation for his
dedicated service to MTAC.

Mr O'Brien introduced new MTAC association executives: William Martin,
Gravure Association of America; and Alison O'Donnell, National Retail
Association; and new MTAC representatives:

Kristen Johnson, National Postal Policy Council

Jeffrey Robinson, National Alliance of Standard Mail and Logistics

Eddie Mayhew, Coalition of Religious Press Associations

William Stevens, Association of Priority Mail Users

Douglas Meyer, National Association of Perishable Shippers

Brendan Sheehan, Continuity Shippers Association

Jayne McGarry, Custom Publishing Council

Mr. O'Brien announced the proposed MTAC 2006 meeting dates:

Feb 1 -- 2 (note: subsequently Feb 15 -- 16 have been proposed as better
dates)

May 3 -- 4 (note: subsequently May 17 -- 18 have been proposed as better
dates)

Aug 2 -- 3

Nov 1 - 2

.

**USPS Financial Update**

**Richard J. Strasser, Jr., Chief Financial Officer & EVP**

Mr. Strasser presented a financial update that provided the following
information:

-   Third quarter (April, May and June) net loss was \$240 million.

-   The net loss in July was \$251M. Revenues were \$26 million above
    plan, but 3.1% below SPLY due to one less weekday this year than in
    2004.

-   Expenses were \$35 million more than anticipated, mainly affected by
    increased fuel costs

-   Year-to-date net income was \$1.5 billion exceeding plan by \$1.2
    billion, with revenue over plan by \$1.1 billion and expenses under
    plan by \$0.1 billion. The revenue overrun to plan was achieved
    mainly in November.

-   Year-to-date volume, with the exception of First-Class Mail (-0.1
    percent), has increased in all categories.

-   Delivery points are up 2 million, to 143.9 million.

-   Total factor productivity (TFP) has increased 1.3 percent.

Mr. Strasser then provided a financial outlook indicating that projected
quarter 4 net loss would be less than plan despite increasing fuel
prices. The increasing pressure on expenses continues to support the
need to implement the price changes that were included in the R2005-1
rate case in January.

Mr. Strasser also stated that there is no expectation of requesting a
fuel surcharge, borrowing for capital investments which provide a return
might be appropriate, but not for ordinary operating expenses. Then he
provided his personal views of the two pending reform proposals.

[Please click here to view the
presentation](../../MTAC0805/MTAC-Public%20081705.ppt)

**Corporate Automation Plan \-- Phase II Update**

**William P. Galligan, SVP, Operations**

Corporate Automation Plan, Phase I (CAP I) began in 1989, focusing on
the automation of letters, flats and parcels. CAP Phase II includes
those three plus automated bundle processing, automated tray and
container processing, longer term plans for delivery (flats automation),
transportation and intelligent mail, including scanning and tracking.

The Advanced Facer Canceller System (AFCS) has been modified to include
Optical Character Readers (OCR), upgraded ink jet cancellers, and an
improved "doubles" detector. Aging Multi-Line Optical Character Readers
(MLOCR) will be replaced by Delivery Input/Output Subsystem (DIOSS)
equipment in 2006, with advanced features and greater depth of sort. The
Postal Automated Redirection System (PARS) Phase I for
undeliverable-as-addressed letters has been completed, and full
deployment of Phase II should be completed by late 2007 (282 plants
through 12 remote encoding centers). PARS for flats is being explored
and eventually may handle parcels as well.

The options for sequencing flats have been narrowed to one, the Flats
Sequencing System (FSS). Research and development is continuing for FSS
and a prototype machine will be tested in the vendor's plant in October
2005 and will be followed by a postal field test in the spring of 2006.
If successful, deployment could start in 2008. A second option, Delivery
Point Packaging (DPP), was ended after the Phase 1 evaluation.

FSS would bring about several operational changes for mailers --
different dropship sites, elimination of some carrier route presort, a
required 11-digit barcode (or ID tags), possible elimination of detached
address labels, increased 5-digit presort, standardized label placement,
and rates that reflect the appropriate savings.

The currently deployed Automated Flat Sorting Machine (AFSM) 100 will
receive two upgrades beginning in 2006 including an automatic induction
system for automated feeding, and an automated tray handling system for
automatic loading and sweeping of trays on the backside of the machine.

The initial deployment of Automated Package Processing System (APPS)
will be completed in 2006 and replace outdated Small Parcel Bundle
Systems.

[Please click here to view the
presentation](../../MTAC0805/MTAC%20Aug%2017,%202005%20CAP%20Phase%202%20Update.PPT)

**Association Presentation -- IDEAlliance**

**David Steinhardt, President & CEO**

Mr. Steinhardt introduced IDEAlliance, the successor to the Graphics
Communications Association, and discussed the basis of its focus on
technology. The mailing industry is moving toward greater reliance on
information technology. IDEAlliance is a leader in that movement,
serving the supply chain from end to end -- list managers,
transportation providers, distribution services, manufacturers of
related equipment and materials, and the information services that bring
them all together.

IDEAlliance was the incubator for a standard for markup for storage and
retrieval of information, from an early IBM language, Gencalc, to
standard generalized markup language (SGML) in the eighties (supported
by the two major standards organizations, ANSI and ISO), to the
mid-nineties, when IDEAlliance introduced extensible markup language
(XML), which is now the standard for most IT systems.

IDEAlliance has participated in or driven the development of a large
number of standards and best practices, with an emphasis on developing
standards that move across the entire supply chain.

Finally, Mr. Steinhardt announced that the highest IDEAlliance award,
the Donald A. Mumma Award, was presented to Marc McCrery in 2005.

[Please click here to view the
presentation](../../MTAC0805/steinhardt.ppt)

**Electronic Mail Substitution Model -- Study Results**

**Michael Reynolds, Director Strategy, Pitney Bowes**

Pitney Bowes conducted a study on the effect of the electronic
communications revolution on mail volume and characteristics. Mr.
Reynolds presented the results of that study, which included a number of
conclusions:

Electronic substitution is not easily defined, and its effects are both
positive and negative, and varied as to what is actually affected.
Hand-held computer phones have replaced the PC and laptop to some
extent, the newspaper and the television news programs to some extent,
and that substitution has been a long evolving process.

E-mail, supposed to be the end of hard copy mail, has become a major
carrier of unwanted ads (spam), deceptive and fraudulent personal
offers, and the carrier of sometimes very damaging infections that can
harm computers. Individuals have become suspicious of e-mail and
friendlier to the well-designed mail piece, which often invites
recipients to visit a web site. In fact, Internet advertisers and
marketers are increasingly turning to direct mail to "prompt"
individuals to visit an Internet site. Some electronic transactions
actually create more mail (Netflix creates a two-way flow of mail based
on an electronic transaction). Many Internet transactions end up
requiring one or more mailed communications.

True, electronic transactions are on the increase -- bill paying,
automatic deposits and debits, tax filings, consumer shopping, etc. --
and there will be a negative effect on some First-Class Mail. But
neither mail nor e-mail is a monolithic entity that can be moved by one
or two influences. Rapid substitution can occur when there is a simple
set of alternatives, but most issues in the mailing industry are much
more complex.

**National Postal Forum -- Orlando**

**Susan Plonkey, Postal Chair**

Ms. Plonkey invited MTAC members to put the Postal Forum in Orlando,
April 2-5, 2006, on their calendars. The National Postal Forum is the
premier trade show for the mailing industry. The Postal Service is
interested in new and original presentations highlighting the value
chain for both mail execution and mail applications and is encouraging
increased participation from customers and partners. There will be an
opportunity for the industry to demonstrate new concepts and promote new
products and services. There will also be a new Hispanic track and
increased involvement by the major mailing associations. Finally, the
high quality of the keynote speakers and the entertainment will be
maintained.

[Please click here to view the presentation](../../MTAC0805/NPF.ppt)

**Streamlining Verification (WG \# 93)**

**David Steinhardt and Pritha Mehra**

Work Group \# 93 will determine how to guide future technology to
enhance the acceptance, verification and induction process. The ultimate
goal is to provide a seamless acceptance process by leveraging USPS mail
bar-coding initiatives and mail processing technologies to produce a
dynamic automated mailing verification process. By using *PostalOne!,*
Surface Visibility*,* mail planning and postage payment information and
leveraging mail processing operational container and piece level data
scans, an automated verification process is envisioned to validate that
mail is being processed according to the postage rates collected.
Starting with a single mail class to demonstrate the verification
process, the work group will define seamless acceptance of mail, map a
process for Standard and Periodical Mail, and determine the value to the
Postal Service and mailing industry for making the effort to implement
the change -- the quid pro quo. It will look at electronic payments of
postage, electronic interfaces with customers, verification of mail
induction, delivery verification, and a feedback process for customers
that is as close to real time as possible. The work group is looking at
strategies to enable seamless acceptance -- including issues related to
work sharing.

[Please click here to view the
presentation](../../MTAC0805/#93wg update streamline ver.ppt)

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

**Phil Thompson and Pritha Mehra**

The work group has revised its original mission to take a broad look at
Postal One! and is now focusing on specific software releases. The 9.0.3
release was particularly problematic and the work group is using lessons
from that experience to smooth the release of 10.0, expected in December
2005. The work group's main goal now is to address improvements in the
Centralized Payment Process (CPP), and that will require a careful look
at the special requirements of Periodicals, including the definition of
what as issue really is, and the needs of mailers who have multiple
publication sites. The testing will be more carefully planned, first
with a pre-test within the Postal Service and then a longer test with
much greater industry participation.

The work group has identified 32 issues that must be addressed, 19 of
which must be fully resolved before 100% postage payment under Postal
One! can be accomplished. Six of the 19 are directly related to
Periodicals. Once 10.0 is released the work group will end and a new
work group will take on the next release.

[Please click here to view the
presentation](../../MTAC0805/MTAC%20#84 Workgroup update.ppt)

**Association Presentation -- Continuity Shippers Association (CSA)**

**Coleman (Bill) Hoyt, Executive Director**

Mr. Hoyt explained that the CSA was established nine years ago to
represent an area of mail that had not been represented by any other
association -- small parcels, including Standard Mail parcels, Media
Mail parcels, and Bound Printed Matter parcels.

When the CSA was formed, MTAC focused mainly on Parcel Post. The CSA
represents parcel subclasses which together generate many times the
volume of Parcel Post. The CSA has focused on small parcel mail
classification, preparation and automation, and

has opposed any effort to absorb the small parcel subclasses into the
Parcel Post classification. Early activities included participation in a
number of rate cases, including

one important success, the introduction of Bulk Parcel Return Service.

**Service Performance Reporting Process Standardization (WG \# 94)**

**Mury Salls and Bob Fisher**

This new work group will address the fact that there are many different
types of service data and reports that are not standard, that are not
available to all parts of the mailing industry, and that apply to all
kinds of mail. The lack of a cohesive data system makes it difficult for
the Postal Service to effectively use a great amount of available
information to improve service in a unified way. The work group will
look at developing standard criteria for mailer-generated reports that
would be useful to the Postal Service; improving the process of sharing
data; evaluation of the potential for a data clearinghouse that would
enhance data sharing; and industry concerns with the Confirm
certification process.

Important issues include Confirm and the limited availability of shared
reports that apply to only a small segment of what is being mailed under
Confirm; the fact that the mailer is the proactive user (implying that
the Postal Service needs to look at becoming more involved in this
process); and the visibility of the system and other reporting programs.

After a review of the work group's charge, an agenda will be finalized
and the work group will publish a revised issues statement.

[Please click here to view the
presentation](../../MTAC0805/MTAC%20WG94%20Aug17.ppt)

**Update -- Negotiated Service Agreements (NSAs)**

**Mike Plunkett, Manager, Pricing Strategy**

Mr. Plunkett reported that five NSAs have been negotiated and business
results of the three implemented are exceeding expectations. In moving
forward with NSAs, there is hope that future agreements, with these five
serving as precedents, can be negotiated more readily and while reducing
the costs to the customers.

Mr. Plunkett described the advantage of having NSAs within the Postal
Service, because of the relationships that are forged through such
agreements. The customer maintains superior address management and very
high quality mail preparation, while increasing mail volume to do postal
incentives. It is a win-win situation.

There are a number of open issues that still need to be addressed --
Postal Service business goals, resource management, how to work with the
PRC and/or how to respond to a possible new regulatory authority if
pending legislation changes the business environment.

[Please click here to view the
presentation](../../MTAC0805/plunkett.ppt)

**Second Day**

###### Thursday, August 18

**Opening Remarks**

**Joyce McGarvy, Industry Vice Chair & Treasurer**

Ms. McGarvy called the meeting to order and announced that Don Harle had
been elected the next Industry Vice Chair & Treasurer at the business
meeting.

## 

## EMIR Bundle Breakage Blitz

## Bob Fisher, Manager Service Performance Improvement

## Sue Redman, eMIR Program Manager

The Blitz survey was completed on August 5 and it included 127 sites
which generated 2,737 reports identifying 3,296 issues. Aside from
providing important data, the exercise will contribute to a more
efficient use of eMIR in the future.

Shrink wrap accounted for over 28% of the problems, but it is used on
less than 20% of the bundles --a significant issue. Rubber bands
accounted for 30% of the problems (slipping off and breaking) but
accounted for only 10% of the bundles. Plastic straps account for 26% of
problems but are used on 80% of bundles (including bundles with both
straps and shrinkwrap).

The breakdown of the reported problems based on various characteristics:
80% Standard flats, 19% Periodical flats; 67% coated stocks, 18%
uncoated, 5% individual polywrap; 30% bundles on pallets, 33% bundles in
sacks,37% container not identified.

As a means of improving bundle integrity, a *PostalOne!* release will
prompt a focused verification when a mailer had a previous eMIR issue,
which will trigger a required physical inspection of the mailing.
Repeated similar problems from a mailer will prompt a Postal Service
response.

Finally, to enhance customer communications, the Postal Service is
sharing more of the data as it is collected and analyzed and is
providing educational programs at various venues (focus groups, PCCs,
BMA Days and on the website). There is now electronic availability of
the *Postal One!* eMIR customer reports, which are presented in various
formats -- aggregate and individual customer reports.

[Please click here to view the
presentation](../../MTAC0805/MTAC_Bundle_%20Breakage%20RF.ppt)

**Address Accuracy: Improving the Change of Address System**

**for Colleges and Universities**

**Thom Roylance, Jim Wilson and Frank Spencer**

## This test program looked at how existing Change of Address (COA) systems (FASTforward, PARS and NCOA^Link^) would affect the forwarding process at four universities, involving student volunteers who submitted COA forms that allowed their mail to pass through Memphis for monitoring. The specific system effecting the forwarding of the mailpiece could then be identified.

##  Only 241 pieces of mail went through the process, 125 First-Class pieces, 114 Standard and 2 packages. The COA systems that affected the mail \-- FASTforward accounted for about 8%, and PARS only 2.5%. The main volume of nearly 90% was handled by NCOA^Link^ and that indicated that having COA data in that system offered an improved capability for all users. 

## The work group expected mailers would receive more timely information about address changes, universities would have less undeliverable as addressed (UAA) mail, students would receive their mail faster, and the Postal Service would reduce handling requirements. There were some issues that will complicate any major implementation -- universities have widely varying policies with regard to mail retention, time allowed for forwarding, how ancillary endorsements are handled (or not handled at all), and the fact that some universities use official Postal Service forms that can be misleading to the student.

[Please click here to view the
presentation](../../MTAC0805/MTAC%2008-18-05#90.ppt)

## Address Quality Methodology (New WG\`# 97)

**Address Quality Tools -- Move Update (New WG \# 98)**

## Charlie Bravo, Nick Barranca and Joe Lubenow

## 

Two new work groups will consider address quality. One (WG \# 97 -
Methodology) will look at the steps that mailers use to prepare and
submit mail, and the tools that are helpful to them. The important
issues that will be addressed are documenting address quality, mailing
list certification, how to increase complete addresses (including all of
the elements needed to insure proper delivery), and electronic mail
stream address validation (beyond Merlin, for example). The goals
include a 50% reduction in undeliverable as addressed (UAA) mail by 2010
and universal use of accurate 11-digit barcodes.

Work group #98 will look at tools to help mailers improve address
quality to reach the goals set by work group \# 97. The first focus will
be on making Address Change Service (ACS) more useful for Standard
mailers, developing electronic-only ACS options, getting corrected
information back to the mail list owner, and issues related to manual
returns. The target completion date is March 2006 and volunteers are
needed for both work groups.

[Please click here to view the
presentation](../../MTAC0805/MTAC%20Addressing%20Presentationwg97.ppt)

**Address Element Correction II Update**

**Rick Arvonio, Manager, Product Management**

**Jan Caldwell, Manager, Address Management**

A product requested by the mailing community, Address Correction Element
II, is now available. Mailers may submit bad addresses that apparently
cannot be corrected by the existing computer-based address quality
systems. After an initial screening through AEC I or the AECES
historical file described below, the address is sent to the local
delivery unit, who will either provide a valid address or confirm that
the address cannot be corrected. All corrected addresses are sent to an
historical file -AECES to eliminate duplicated efforts on the part of
the carriers.

There are fees involved -- the existing \$15/1000 for AEC I plus \$0.25
per record corrected or indicated as not correctable - \$25 minimum
submission. Mailers may submit any number of addresses (but only 15,000
will be processed per day). If the carrier handles the inquiry and
either returns a good address or confirms the address is not good, there
is a \$.25 fee. However, there is no charge if the address is corrected
through the AECES historical file , post office box exclusions and
unique occurrences (colleges and military APOs).

In the pilot test, 90% of addresses were resolved, 60% were improved
and- delivery point confirmed and the rest were not capable of
resolution (address does not exist/- not recognized in the delivery
unit).

[Please click here to view the
presentation](../../MTAC0805/AECII_MTAC_Aug2005.ppt)

**Association Presentation -- American Bankers Association**

**Irv Warden, Associate General Counsel**

The ABA was founded in 1875, and represents a very broad industry that
includes community and regional banks, savings institutions, trust
companies, and some credit-related service companies. The ABA offers its
members the usual services \-- a 345-member staff (including a
compliance hotline), web-accessed member-only information, training
programs, regular e-mail notices and communication, professional
continuing education courses, and insurance programs.

The ABA's activities in the postal arena are mainly related to rates and
regulations and the usual venue for that participation is the courts or
with the Postal Regulatory Commission. Annually, banks send over seven
billion pieces of mail involving over \$2.5 billion in postage. There is
increasing advertising mail on the credit card side, but decreasing
volume in financial documents like checks, statements and disclosure
documents.

[Please click here to view the
presentation](../../MTAC0805/SlidesforIrvWarden%20(2).ppt)

**Developing an Interface to the AFSM 100**

**Automated Induction Process (New WG \# 96)**

**Mike Winn and Dave Williams**

New work group #96 will look at a new interface, the automated induction
process to the AFSM 100. There is significant labor related to getting
bundles and packages ready for the AFSM 100 and loading them onto the
equipment. This automated induction will eliminate the need for labor
(up to four individuals) and introduce an automatic feed process for the
equipment. The work group will look at how to make the whole process as
efficient as possible.

[Please click here to view the
presentation](../../MTAC0805/MTAC%20Work%20Group%2096.PPT)

[Please click here to view the
presentation](../../MTAC0805/AI%20with%20CG.mpg)

**Alternative Packaging Materials for Parcels (WG \# 91)**

**Val Scansaroli**

Mr. Scansaroli announced that work group #91 is going to "sunset",
partly because it never developed momentum and the issues that would
have been covered will be assigned to other work groups.

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

**Anita Pursley and Cindy Mallonee**

FAST has been deployed mainly in the Northeast, and full deployment will
be completed by the end of November. There are 128 active facilities
that have handled 9,004 appointments (260 are recurring appointments),
and there are 913 registered Postal One! users. A few problems arose
about inconsistencies in the indicated volumes versus slots available at
various facilities (still being resolved), and a number of customer
inquiries are being compiled into a consolidated report file. There were
also help desk issues that should be resolved in the next week or so.
The use of Web Services has been limited, but the Postal Service is
providing assistance in setting it up and testing it for customers. Over
240 individuals have attended training and more sessions are scheduled
through September (BSNs are helping identify best locations for future
classes).

Surface Visibility has been deployed and mailers in certain areas may
begin using pallet barcodes. A few mailers have already prepared the
barcodes and will participate in a preliminary test of the service. New
users should submit the barcode for Postal Service verification. Surface
Visibility should be fully deployed by late November.

[Please click here to view the
presentation](../../MTAC0805/MTAC87%20081805.ppt)

**FAST for Periodicals (WG \# 95)**

**Ted Freedman and Cindy Mallonee**

FAST will eventually accommodate all classes of mail; Periodical Mail is
next in line. The work group has reviewed the FAST system as it exists
for Standard Mail, looked at Surface Visibility and its opportunities
for Periodicals, and talked about the needs of the various kinds of
publications -- daily, weekly, bi-weekly, monthly, etc. Some issues have
been identified -- recurring and standing appointments, creating
visibility for sacks, and tracking mail handled by consolidators. The
work group will now begin to identify specific requirements for
integrating Periodicals into FAST.

[Please click here to view the
presentation](../../MTAC0805/MTAC95%20081805.ppt)

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

**Joe Lubenow and Marc McCrery**

## The work group will "sunset", but new work groups may be established to continue work on similar issues. There were several issues that work group \# 81 successfully addressed. To optimize the Automated Package Processing System (APPS) equipment two Federal Register notices will be published shortly as a result of the work group's efforts -- a final rule specifying bundle address label visibility and a proposed performance standard for bundle integrity (that is, bundles, however secured, must remain whole when dropped from a height of four feet to a hard surface). The work group contributed to the reduction in sacks by developing new schemes to move mail to pallets, and a proposal to completely eliminate sacks with 24 pieces or fewer (which would eliminate over 50 million sacks). 

Two issues were not resolved and should be carried over to new work
group efforts -- mixed ADC/mixed BMC pallets, and
co-mailing/co-palletization of multiple mail classes.

## Adjournment 

## The meeting was adjourned at 11:00 a.m.