**Minutes of the**

**Mailers\' Technical Advisory Committee**

**October 27-28, 2004**

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

**Benjamin Franklin Room**

**Washington, D.C.**

**First Day**

###### WEDNESDAY, October 27

**Welcome/Introduce New Members**

**John Wargo, Chair, Postal**

**Bob O'Brien, Chair, Industry**

**Marty Emery, Vice Chair, Postal**

John Wargo called the meeting to order and welcomed MTAC members and
guests. On a somber note, he announced that Fred Seymour, a long-time
member of MTAC, had passed away since the last meeting. He also noted
that John Dillon will retire after 26 years as an MTAC member,
representing the periodical mailers and fulfillment managers. Finally
Cathy Pearsall-Stipek is also retiring. She had championed the concept
of vote-by-mail.

Marty Emery announced two new association executives: Becky Rhodes,
General Services Administration, and Bernadette Carlson, Gravure
Association of America. He also announced new MTAC representatives: Phil
Thompson, Gravure Association of America, and Brenda Rex, American
Bankers Association.

Bob O'Brien added his welcome and announced future 2005 meeting dates
(subject to Board approval): February 23-24, May 18-19, August 10-11 and
November 2-3. He opened the session presentations, introducing Ralph
Moden, who discussed the legislative outlook.

**Legislative Update**

**Ralph Moden, SVP**

**Government Relations**

Ralph Moden reminded attendees that two Postal Reform bills had been
unanimously reported out of committee in both the House and Senate. In
the last several months the committees have been working to refine and
align the bills, and the Postal Service has been active providing
information. He said that one issue being addressed in both bills is the
so-called "glitch" that relates to the escrow account. As written,
escrow premiums for retirees during the first nine months of 2006 would
be paid by the Postal Service, as would the payments to the fund itself
-- in effect, a double payment. The Postal Service has presented a case
which points to this oversight and it is likely that it will be
corrected in the final versions of the bills.

The administration has established a position with regard to the
military payments remaining with the USPS, and the budget effects of the
escrow. The administration also feels that the legislation does not go
far enough with regard to postal reform, and the differences between the
House and Senate and the administration must be resolved. Chairman
Collins (Senate) and Chairman Davis (House) have shown an interest in
raising the discussion to a policy level, above the basic budget issues.
Both are interested in accomplishing some progress in the lame duck
session, although there are some important areas of legislation that
will crowd the agenda (appropriations and intelligence community
issues).

Finally, Mr. Moden noted that the Postal Service had appealed a
requirement related to pre- and post-1971 employee retirement benefits
and the Board of Actuaries ruled against the Postal Service. During
discussion, Mr. Moden summarized a number of the legislative issues that
are important to the Postal Service such as the escrow dilemma and
competitive pricing.

**Surface Visibility**

**Cindy Mallonee, Mgr.**

**Logistics Systems**

Cindy Mallonee reported that Surface Visibility is a new program
approved by the Postal Service to be implemented in 2005. The goal is to
complement the various mail streams with accurate information to better
manage the surface transportation networks. This will require a unique
identifier on all transport equipment, from sack and trays to trailers.
Those IDs will be used to track mail at various key handoff locations as
well as check for quality to eliminate improper loads and wrong routing
on a real time basis. Finally, dock management will be improved by more
automatic data collection and by a management tool available to dock
employees and supervisors responsible for mail on the docks.
Implementation is scheduled for March -- October 2005.

The data collection will require a new 24-digit distribution label being
developed by the Intelligent Mail Group, and all mail transport
equipment, including owned and leased trailers, will have a permanent ID
label. It is anticipated that the label will be available for
customer-owned trailers in the future. That allows a quality check since
the system includes destination information for the specific piece of
equipment and the scan can verify that the equipment is headed for the
proper destination and can confirm when the equipment arrives at the
proper destination. The same applies to the mail being loaded, so that
the system will issue an alert if mail is being improperly loaded.

Mail will be coded as the process of shipping begins, at the sack/tray
level, and the system will be able to track each coded entity as it
moves through the transportation process. There is room on the label for
mailer ID with the concomitant potential for feedback to the customer.
The data will provide accountability, and the ability to analyze
transportation efficiencies.

[Please click here to view the
presentation](../MTAC1004/MTAC%20S.V.%2010272004%20%20%201255pm.PPT)

**Integrated Financial Plan**

**Richard J. Strasser, Jr.**

**Chief Financial Officer and Executive Vice President**

Updating the financial results, Richard Strasser reported that the
September unaudited results show revenues at \$5.8 billion, 2.5% better
than plan and 0.9% higher than September 2003. Expenses were higher than
plan (2.7%), but 1.4% lower than the same period 2003. The net loss for
September was \$60 million, \$13 million more than the plan. Total
volume for September increased 4.4%, with the anticipated decrease in
First-Class Mail and increases in Standard Mail and Priority Mail. The
positive trend continued in workhours, with September YTD showing a
decrease of 21 million workhours, 3 million above plan. Total workforce
is currently at 707,000 career employees. The official audited financial
report should be ready for submission to the Board on December 7, after
which it will be released.

Turning to 2005, Mr. Strasser provided an overview of the Integrated
Financial Plan (IFP) as it was presented to the Board of Governors in
September. Reviews of all three components of the 2005 IFP were
provided: operating, capital investment and the financing plans. The
Transformation Plan included a five-year reduction of accumulated costs
of over \$14 billion, a goal that should be exceeded if current trends
continue. Fiscal Year 2005 will be the third year with no rate increase.

The operating plan is based on a number of assumptions. Advertising mail
is forecasted to increase in volume, as First-Class Mail declines.
Economic factors assumed in the plan are; a general inflation rate of
1.9%, continued job growth at a lower rate of increase than early in
2004, and a slight growth in retail sales. It was also assumed that
there would be no unusual expenses related to extraordinary events (such
as the anthrax incident) and no additional expenses are included for
Postal Reform, if that occurs in the next year.

Mr. Strasser indicated that the 2005 IFP assumed 2004 net income between
\$2.4 and \$2.8 billion. The projection for 2005 is for total revenues
to be about \$68.3 billion, with expenses nearly equaling revenues,
resulting in a near breakeven year. Total mail volume increased through
2000, decreased in 2001 through 2003, and increased slightly in 2004.
Total mail volume for 2005 is forecast to increase slightly from 2004
and is expected to be about the same as 2000, about 207 billion pieces.
However, Mr. Strasser described a significant difference in the mix or
makeup of that volume between 2000 and 2005. Although total volume is
similar, in 2005, for the first time Standard Mail volume will be
greater than First-Class Mail. At constant rates, the mail mix shift
means that although we will have similar volume, revenue declines by
\$4.9 billion. To offset only \$3 billion of this would require
productivity increases of 5% a year, every year, an outcome that is not
realistic.

Moving to expenses, Mr. Strasser indicated that Cost of Living
Allowances (COLAs) and employee and retiree health benefit premiums paid
by the Postal Service is projected to increase about \$700 million and
\$800 million respectively in 2005. Management has little or no control,
over those impacts. COLA increases are impacted by the change in CPI.
The September COLA alone will have an impact of almost \$500 million
versus the recent \$100 million to \$200 million impacts, as a result of
increased fuel costs. Normal salary increases are projected to cost
\$1.3 billion. This increase is driven by negotiated general increases
and other benefits. Non --personnel costs are expected to increase \$400
million, workload by \$200 million and other costs by \$600 million.
These increases total \$4.0 billion but all are before cost reduction
efforts. To offset any of the increased costs, the Postal Service relies
mainly on workhour savings, because about 80% of expenses are labor
costs In 2005, cost reductions of \$1.4 billion are planned, reducing
the expenses growth to \$2.6 billion. \$1.1 billion of the total cost
reductions will be generated by management efforts and the remainder
comes from capital investments, including flats automation, the
automating of mail forwarding operations, and materials handling and
retail equipment.

Mr. Strasser summarized the 2005 operating plan by indicating: mail
volume is projected to grow by 0.7%, an increase of 1.6 million delivery
points, and a reduction of 23 million workhours. This will result in a
Total Factor Productivity improvement of 0.9%.

Turning to the Capital Investment Plan, Mr. Strasser stated that
projects with positive returns on investment (ROI) have been and will
continue to be supported. Commitments for crucial customer service
facilities will be made. Funds have also been reserved for insuring a
safe working environment for employees and customers (even though the
request for congressional appropriations to cover some of the expenses
related to the earlier terrorist attacks has not yet been forthcoming).
Finally, funds for improved management information systems will be
committed in 2005.

The capital investment commitment plan for 2005 calls for \$1.85 billion
in automation and mechanized equipment, approximately doubling the
amount committed in 2004. There will also be increases in commitments
for facilities improvement. Plan commitments for vehicles is \$115
million in 2005. Support and retail equipment commitments will remain
about the same as in 2004.

Outstanding debt as of September 30 of 2003 was \$7.3 billion. Reviewing
the Financing Plan for 2005, Mr. Strasser indicated that an additional
\$800 million in debt could be retired after \$5.5 billion was repaid in
2004. This would bring the debt outstanding as of September 30, 2005 to
\$1.0 billion.

He noted that the Postal Service Board of Governors had approved the
2005 integrated financial plan on September 14.

[Please click here to view the
presentation](../MTAC1004/MTAC102704%20cd%20Strasser%20%20135pm.PPT)

**Consistency**

**Stephen Kearney, VP**

**Pricing and Classification**

**Sherry Freda, Mgr.**

**Mailing Standards**

Stephen Kearney discussed specific efforts that will improve consistency
in working with the Postal Service. The efforts include reorganization
of the units that issue mail classification decisions, clarification of
certain mailing standards, and improvement in communications with major
mailers.

The functions of the Rates and Classification Service Centers and
Nonprofit Service Center, previously independent units under the VP
Pricing and Classification,have been consolidated into a single center,
the Pricing and Classification Service Center (PCSC), under the Manager,
Mailing Standards. The new service center will belocated in New York
City . Staffing will not be reduced, and those already in the Centers
will be invited to move to New York.

There will be two units in the new PCSC -- Mail Classification and
Centralized National Cases. The latter will be organized by industry
segment. This new business model and will provide a single point of
contact for mailers in each particular segment, and ensure consistent
communication on a national basis.

Mr. Kearney discussed the current revision of the Domestic Mail Manual,
which will be based on shape, class of mail and topic. The current
revision, mainly for commercial mailers, should be released in early
2005. Standards related to the various types of mail have been
reorganized into chapters based on shape: retail
letters/cards/flats/parcels; discount letters and parcels; discount
flats; and discount parcels. Additional chapters will deal with
standards that apply to all mailing services, additional mailing
services, and special standards.

Mr. Kearney noted that the final rule clarifying the circumstances when
personal information may be included in Standard Mail has been published
in the Federal Register. He described the significant improvements that
were adopted after review of over 400 comments on the initial proposal
DO The new rule will become effective on June 1, 2005, to allow mailers
ample time to budget and plan future mailing campaigns.

Mr. Kearney also discussed a proposed rule regarding the inclusion of
certain checks in Standard Mail (blank checks, balance transfer checks,
etc.). The proposal would require the mailer to include an ancillary
service endorsement to ensure that the checks are delivered to the
addressee or returned to the sender. Although no major problems are
anticipated, this ruling will deter criminal activity with regard to
illegal access to the checks. If the proposed rule is adopted, it is
anticipated that it would be effective on June 1, 2005.

The MTAC Work Group #86, Consistency of Mailing Standards and Business
Mail Acceptance, developed a number of recommendations that involve
consistency, especially in communications. Mr. Kearney expressed
appreciation for that effort and noted that most of the recommendations
were being adopted.. Specifically, the work group recommended
communication via e-mail to advise mailers about revisions to the DMM,
new Federal Register notices and to disseminate Customer Support
Rulings. Other vehicles used will include Postal Bulletin, Postal
Explorer (online) and RIBBS.

During discussion, Mr. Kearney assured members that the new PCSC would
work with mailers with regard to timeliness of rulings, special
requirements of mailers, and dissemination of information.

[Please click here to view the
presentation](../MTAC1004/MTAC%201027%20230pm.ppt)

**Corporate Automation Plan Update**

**John Rapp, SVP**

**Operations**

John Rapp presented an overview of the Delivery Point Packaging (DPP)
system, the Flats Sorting System (FSS), and a brief comment on Automated
Parcel Processing System (APPS).

DPP begins with automation equipment that can sort both letters and
flats into a single delivery point set of mail that can be packaged by
some means to allow the carrier to handle only the complete addressee
package of mail on delivery. It eliminates the manual selection of an
addressee's mail during the delivery process. It also eliminates manual
casing and the in-office handling of separate letters and flats, and
reduces the number of mailpieces handled by the carrier and others in
the sorting process.

Some changes would apply -- an 11-digit barcode would be required, there
would be increased 5-digit sortation by the mailer, and the mailer would
realize rate savings.

Mr. Rapp conceded that mailers had expressed a number of concerns, all
of which are being considered -- the manner of packaging, the
arrangement of mail in the package (although letters would never be
inserted in flats), what delivery areas would be affected, since some
would not be cost effective for the DPP process. The Postal Service is
conducting marketing research to answer some of these concerns. The
first step was to conduct focus groups to see how recipient customers
would react to packaged mail. The survey contractor is currently
analyzing the data. Preliminarily the proposal seems acceptable to
recipients.

Research and development efforts are in progress to help develop a basis
for making a decision. The design and simulation evaluation has been
completed, and it will be followed by a "test bed model", a mock-up that
will be completed by January 2006. If that limited configuration is
successful, then a prototype operation will be built in mid-2007,
followed by a field test in 2008. Mr. Rapp noted the relatively
long-term requirement for complete evaluation of the DPP process.

A second option is FSS, a proposal that would develop a machine to
sequence only flats. With 51 billion flats processed each year, about 44
billion are actually cased by hand and elimination of that process would
be a major savings. Although little would change as far as the in-office
process of casing mail, there would be a reduction in the time required
by the carrier to handle mail during the delivery (street) process.

The evaluation process is a condensed version of the DPP process -- a
prototype demonstration by September 2005 and a field test by March
2006. Similar changes would be required by mailers -- the 11-digit
barcode, increased 5-digit sorts, with concomitant rate savings.

Finally, Mr. Rapp commented on the Automated Package Processing System
that is now being installed in several locations (one in the Twin Cities
is up and running). Deployment should be completed by late 2005. APPS
handles a wide variety of mailpieces and allows inline optical scanning
with recirculation of any package with an uncertain barcode. An
important objective of APPS is to reduce the use of sacks.

In closing, Mr. Rapp promised MTAC regular updates on equipment
development and the decision related to the use of that equipment,
adding that it is important for mailers to be fully aware of the
possible changes that may affect the way they prepare mail.

[Please click here to view the
presentation](../MTAC1004/J%20Rapp%20MTAC%20Oct%202704%20CAP%20Phase%202%20%20%20%20300pm.PPT)

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

**Sue Taylor, Sherry Freda and Pritha Mehra**

Sue Taylor reiterated the work group mission, "To identify
inconsistencies in mailing standards and business mail acceptance and
determine what resolutions can be made to make things more consistent."
She reported that the work group had met six times, and is now focusing
on developing a document describing accomplishments. Some of these
accomplishments include publishing the final rule clarifying the when
personal information may be included in Standard Mail, redesigning the
Domestic Mail Manual to support the consistent application of Mailing
Standards, enhanced employee training, specifically in areas identified
by the workgroup as a problem with consistent interpretation, and
publishing a table regarding surcharges. Further, the workgroup will
include accomplishments concerning a new Merlin web site (which will be
available in November), and enhancement of the BMA web site,. There is
already a "mystery caller" program that contacts 100 sites per district
per quarter, supported by a Gallup survey of 100,000 customers (about
10% respond). Finally, the DM 109 (Business Mail Acceptance SOP) is
being improved, reinforced by a training program for employees.

The work group has reviewed drafts of the revised DMM, and looked at the
web version. Webcasts have been designed on a number of related topics.
Concerning communications, Pete Stark previewed a new and improved
search engine on the usps.com web site, which was installed in
September. It allows a much more sophisticated search process. Mr. Stark
invited comments pro and con about the search engine.

Finally, the BSN online communications process has been improved to
provide information about impacts on service caused by "incidents"
(terrorist attacks, bomb threats, etc.) and "situations" (weather,
strikes, etc.).

[Please click here to view the
presentation](../MTAC1004/MTAC%20Week%20Presentation%20Oct%20340pm.ppt)

**Improving the Change of Address System for Colleges and Universities
(WG #90)**

**Thom Roylance**

Thom Roylance explained that this new work group intends to evaluate the
possible impact of including student changes of address in the National
Change of Address (NCOA) database. It applies mainly to mail delivered
to students who live on campus and whose mail moves through the
university mail system. A major problem is that there is limited address
maintenance in those systems such that students who have long since
graduated still receive UAA mail at the university, most of which is
discarded.

An effective solution would benefit mailers, who would save assets by
not generating UAA mail; the students, who might like to receive some of
the mail now not delivered; the university, which would save on reduced
handling and processing costs; and the USPS, because forwarded mail
would be reduced and additional postage could be collected for certain
types of mail.

The work group met for the first time at the Postal Forum. NACUMS
colleges and universities were contacted about providing support in the
data collection effort. An early result was the development of an
estimate that at least 250 million UAA pieces of mail are handled each
year. Reducing that amount by only 10% would save about \$5.5 million
annually.

Mr. Roylance described a university survey to grade mailers by industry
segment about the quality of the mailers' efforts. In general, the
universities gave the mailers a C average, although the publishing
industry received a slightly higher grade, a C-plus, as did the larger
mailing companies as compared to small and medium mailers.

Preliminary findings by the work group suggest that universities must
adopt zip+4 codes, and develop an online capability for communicating
with the Postal Service. Next steps include looking at security and
privacy issues, evaluation of the effects of a university having a
unique zip code, and continuing to build the data gathering relationship
with universities to enable further development of issues and potential
solutions.

[Please click here to view the
presentation](../MTAC1004/WG90%20Report.ppt)

**Coding Accuracy Support System -- Refinements and Awareness (WG #89)**

**Cynthia Harrelson and Ruth Jones**

Cynthia Harrelson reported that, in addition to concerns about
consistency among CASS software programs, including standards for
grading software, the work group became aware that awareness and
education were important aspects of an effective CASS. Over
three-quarters of the issues submitted to the work group for
consideration related to awareness and most of those issues came from
MTAC members, probably one of the most informed audiences.

The first work group meeting was held in August in Memphis and 45 issues
were reviewed, whittled down to 24 that specifically applied to the work
group's mission (two more were added later). The issues were separated
into five categories to be addressed by two teams -- education and
response (led my Wanda Senne) and CASS, developer and vendor (led by
Joel Thomas).

Ruth Jones reported that the second meeting was held on September 30 in
Alpharetta, Georgia. The two teams addressed the 26 issues and, with
subsequent teleconferences, worked through all of them. The teams also
identified a number of venues that would be appropriate for the
education/awareness aspect of the process. Two more meetings are
scheduled in November to address each issue in detail and hopefully
begin to develop more detailed analysis of each.

[Please click here to view the
presentation](../MTAC1004/WG89Oct04%20%20%20410pm.ppt)

**Electronic Mail Improvement Reporting (WG #55)**

**Joyce McGarvy and Pat Killeen**

Joyce McGarvy announced that the work group would finally sunset, having
created an effective system to solve problems arising from mailings that
failed to pass through mail processing properly. The final report of the
work group's product will be posted on MITS in the near future. A video
was shown that demonstrated the eMIR process by which problems with
mailers' submission can be identified and the mailer notified. One
especially effective aspect of the electronic reporting process is the
ability to include electronic images (photos) of the problematic mail so
that the mailer can see clearly the issues. Joyce McGarvy noted that the
reporting package for the customer through the eMIR system has not been
fully designed, but a follow-on work group can address that project.

Susan Redman discussed the release of eMIR in the Postal One!
environment, which has been done on a phase-in basis. It requires
training of Postal Service employees, which is now under way. The eMIR
interface with the BSN has been successful, the digital images are well
received by both Postal Service employees and customers, and it is
anticipated that when some minor issues have been resolved the number of
participating customers will be increased. One positive aspect of the
system is that, for major mailers, issues may turn up in a number of
facilities, and they can be rapidly identified and resolved.

**Barriers to Address Quality (WG #88)**

**Jody Berenblatt**

 

Jody Berenblatt reported that the work group has sunset. She noted that
the work of the work group was completed on time and will be reported on
the MTAC website as soon as possible.  Twenty-five issues have been
ranked and outlined in the final report.   The number one issue
identified is the need to retain an address within both the physical and
electronic space constraints.  Others include exploring methods to
improve matching intelligence associated with secondary address elements
currently available on USPS files, taking into consideration the need to
increase utilization of complete and correct addresses, the need to
minimize mismatches, and the appropriate industry role taking into
account privacy issues.

**Second Day**

###### THURSDAY, OCTOBER 28

**Address Element Correction (AEC) Phase II**

**Jan Caldwell, Mgr.**

**Address Management**

**Mike Spates**

**Delivery**

**Wayne Orbke**

**Product Management**

  

In 2003, USPS licensees were able to ZIP+4 code 95% of the 336 billion
address records processed, and delivery point validate 90% of the 336
billion address records processed.  Conversely that meant that they
failed on 19 billion ZIP+4 addresses and 32 billion DPV confirmations.

 

In June 2003, the Electronic Uncoded Address Resolution System (eUARS)
was initiated.  The eUARS allows electronic submission of bad change of
addresses to the local carrier for resolution (correction or
confirmation that the address cannot be corrected).  The eUARS resolved
90% of NCOA records submitted to the carriers.

 

For years mailers have been able to send a postcard to the local carrier
for correction, and the carrier would enter the correction and return
the card -- a very labor-intensive process and one that could be
duplicated many times by different mailer inquiries.  Now the Postal
Service is enhancing the eUARS process by providing for mailer inquiries
about bad addresses.  The mailer inquiries will be routed under eUARS 
and the correction entered into a historical database ***one time. ***
Subsequent mailer inquiries would bounce off that entry and not go to
the carrier again. 

 

The Postal Service will benefit by a constantly growing database of
accurate addresses and major labor savings will be realized because
carriers will not make repetitive corrections to the same bad address. 
Mailers will be able to improve their address lists and reduce UAA
costs.  Rates for the service have not been determined, but the goal is
to begin the service in early 2005.

 

Mike Spates discussed the importance of carrier knowledge, much of which
was not previously properly accessed, especially when the local carrier
would recognize a bad address and case it properly without notifying
eUARS.  This system will begin to move that knowledge into the
historical database

 

During discussion, Jan Caldwell emphasized that, although mailers may
well get some corrections that include a previously missing apartment
number, the system is not designed for submission of lists *en masse*
for the purpose of obtaining apartment numbers.

[Please click here to view the
presentation](../MTAC1004/AECII%20Oct%2004%20MTAC%20%20805am.ppt)

 

**Marketing Update**

**Stephen Kearney, VP**

**Pricing and Classification**

Stephen Kearney began his presentation with a quotation: Pricing is the
moment of truth -- all marketing comes into focus in the pricing
decision.

The Postal Service has adopted a three-part pricing strategy that relies
on simplification, customization and pricing that encourages efficiency.
Examples of the approach to simplicity are the revision of the DMM to
make it easier to use, the Priority Mail flat rate box, and the
availability of electronic return receipts. Aside from making the DMM
easier for to use, "A Customer's Guide to Mailing and "A Guide to
Mailing for Businesses and Organizations" have been published for the
consumer and small business owner.-- books that focus on the needs of
these customers "A Customer's Guide to Mailing", DMM 100 has been
printed in Spanish and Chinese as well an English. Simplicity and
convenience has been added to Priority Mail with two new flat-rate box
options. One box is shaped like a garment box and is ideal for clothing,
books, board games, and relatively thin items. The other box is similar
to a shoe box and easily holds merchandise such as shoes, model cars,
and taller items. Both shapes have similar cubic inch dimensions. The
postage for a flat-rate box is \$7.70, regardless of weight or
destination. The electronic return receipt was designed for convenience
and economy and is particularly easy to use if the customer is
comfortable with online applications (the receipt, including an
electronic image of the signature, is returned to the customer by
e-mail). The cost is \$1.30 versus \$1.70 for the standard green card
receipt.

Customized services have been designed for mailers with special needs.
Although only a few negotiated service agreements (NSAs) have been put
together, they have the potential to benefit the customer by customizing
services and rates and the potential to increase mail volume and
contribution of institutional costs (both Postal Service requirements).
The first NSA was with Capital One, now almost a year old. A report of
results will be developed for the Board, after which it will be released
as a public report. Another approach to customized service involves
mailing standards, some of which have been developed to reflect the
unique needs of certain major customers (although available to any
mailer interested).

Parcel Return Service was developed to respond to the needs of a
specific industry segment, sellers whose products may be frequently
returned through the mail by buyers. The arrangement combines a reduced
rate and customer work-sharing (mainly picking up returns at various
Postal Service facilities rather than having the returns delivered by
carrier).

Finally, the Postal Service has begun accepting customized mail ad
pieces (usually die-cut and/or irregular shaped) for high impact
advertising. Customers who use this option are being asked to report
response rates to help the Postal Service determine whether the custom
service should be expanded.

The third marketing strategy encourages efficiency. Co-palletization of
periodicals is an attempt to provide greater flexibility to mailers and
to reduce the use of sacks in processing periodicals. Another proposal
that will be on the agenda for the next rate case is a redesign of the
rate case process that would result in a two-phase increase, equal rate
increases each year, which go into effect on a pre-specified day and
allows mailers to plan and prepare for the rate changes.

Finally, Kim Parks commented on the holiday season ad campaign that will
feature two 15-second television ads that encourage online transactions
with the Postal Service (services such as stamp purchases,
click-and-ship, etc.)

[Please click here to view the
presentation](../MTAC1004/MTAC1028_smk1027%20%20850am.ppt)

**National Postal Forum (NPF)**

**Marty Emery, Mgr. Customer & Industry Marketing**

Marty Emery reported on the success of the September 2004 Washington DC
National Postal Forum and that the symposium program and PCC Leadership
Conference were well attended. Over a thousand professional certificates
were awarded for attendees who participated in the business tracks. He
noted that the only Postal Forum in 2005 will be held in Nashville next
year and he encouraged all to register early.

Marty Emery reported that over 6,300 attended the Postal Forum, almost
twice the number of previous Forums; 839 went to the various symposia;
and 250 attended the PCC Leadership Conference. The inclusion of
symposia was new and very successful since it was clear that many who
signed up for the Forum did so because of this innovation. There were
also 13 business tracks.

Product previews and learning labs enhanced the usual exhibits. Finally,
the NPF greatly improved its web site, which should be very valuable to
those attending the next Postal Forum in Nashville. Two new symposia
will be added, one for printers and one for those interested in mail
research and intelligence. That symposium will provide a focus on the
EMA Foundation's outstanding Final Report of the Intelligent Document:
The Internet Thing.

[Please click here to view the
presentation](../MTAC1004/MTAC%20Oct%2028%20NPF%20Presentation%20%20%20935am.ppt)

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

**Anita Pursley and Cindy Mallonee**

Anita Pursley reiterated the purpose of the work group, to look at
delays in mailing related to delivery of mail to facility docks and to
assess the impact of DOT's service hours change (loading and offloading
not counted as on duty times). One aspect of improving efficiency is the
replacement of DSAS with FAST (Facility Access and Shipment Tracking).
FAST is designed to allow dock and plant managers to access accurate
data related to inbound mail volumes and composition. It is also
possible to develop an incentive system to encourage mailers to be
accurate in making appointments and estimating the mail that is coming
into the facility.

Currently the local facility determines the number of appointments based
on the number of pallets that can be handled in the work day. FAST will
expand those criteria to include volumes of mail and the shape and
presort level of the pallets. Appointment availability under FAST will
reply on a rating for each mailer based on responsiveness to scheduled
appointments and accuracy of the load description entered for that load.

Anita Pursley discussed the rating system in detail, noting that a
number of factors figure into the rating: on time arrival based on the
scheduled appointment, accuracy of load description, time of
notification, and method of notification (electronic submission
preferred). A pilot test is scheduled to begin in January with final
implementation beginning in March 2005, to be completed by mid-summer.

After the presentation there was an extensive discussion about the
rating system, which appears to require a considerable amount of
administrative effort to maintain, and the effect on certain mailers who
may not be able to comply with the requirements because of their own
customer demands. It was agreed that the issue would require additional
consideration before the rating system is finalized.

[Please click here to view the
presentation](../MTAC1004/MTAC%20Oct%2028%20%201015am.ppt)

**PostalOne! Postage Payment & Statements -- Approach & Design (WG \#
84)**

**Dan Minnick and Pritha Mehra**

Dan Minnick announced that ***Postal One!*** Postage Payment and
Statements has become a reality, but there are gaps that prevent full
realization of the anticipated potential. In support of that success
potential, Work Group #84 has completed assessment of 12 issues related
to Standard Mail and shared the recommendations with the Postal Service.
In Phase II, the Work Group will now tackle 24 issues related to
Periodicals. This will include working on solutions that could take
advantage of both the USPS\' success in integrating both Mail.dat and
Web Service supplied data into a single Postal One! database and the
emerging use of XML messaging.

The Periodicals phase will be similar to the Standard Mail discussions.
Initially the Work Group brainstorms possible issues, prioritize them
and chooses an individual to develop a preliminary proposal for
resolution. Then the work group reviews the proposal and sends a final
version to the Postal Service. Within the current phase, the Work Group
has identified 24 issues, including such basics as what is an "issue" or
an "edition"? Agreeing on these definitions is essential to achieving
broad electronic Payment and Statement exchange success.

At the last meeting the work group discussed changes that have occurred
in the last year. Web services and Mail.dat are critical sources of data
and ***Postal One!*** has developed a means to integrate those diverse
resources. Understanding how to successfully use the resource is a
critical requirement for having all transactions come under *PostalOne!*
Payment and Statements. To make the electronic Payments and Statements
process more accessible and efficient the Work Group can take advantage
of the emerging Mail.dat messaging (using XML) that will bypass the need
to move large amounts of data for every process step.

**Parcel Delivery Performance & Statements -- Approach and Design (WG \#
84)**

**Chris Finley and Bob Fisher**

Bob Fisher stated that the work group was making good progress in
developing processes to insure quality and efficiency in delivering
packages to the DDU accompanied by the required 8125. It will continue
to work on a number of processes, including conversion to eVS and a
series of reports that can be used by consolidators to improve their own
processes.

Bob Fisher reported that the work group is facilitating sharing of
performance data with consolidators on a weekly basis, especially
whether packages are arriving in the company of the form 8125. There is
a report that includes manifests which have no start-the-clock (8125)
scans.

The work group is refining an arrival quality measurement, considering
what to do with packages that do not arrive with an 8125, working on
reports that focus on all pieces and reports that support 8125 scan
performance. The start-the-clock process of eVS must be finalized and
tested. Reports are being used to resolve issues at the earliest points
in the process. There are issues to resolve for DDU entry of Standard
packages. Processes are in place for the fall mailing season. Finally,
the work group is looking at the changing nature of the consolidator
industry that is resulting from mergers and purchases.

Mr. Fisher noted that the work group would sunset in January.

[Please click here to view the
presentation](../MTAC1004/WG82%20Bob%20Fisher%20%201055am.PPT)

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

**Joe Lubenow and Marc McCrery**

Marc McCrery outlined some of the recently completed initiatives of the
work group, including the full merging of AFSM 1000 flats to facilitate
movement of the heavier periodicals to the delivery unit, which reduces
delays in delivery. Another initiative is the reallocation of firm
bundles with regard to the 5% limit calculation. And finally there is
the recent rule change that allows In-County Periodicals to be dropped
off at DDUs without sacking or palletization.

Comments on the Federal Register notice on address visibility have been
accumulated and are being considered. In effect, the ruling states that
the label must be readable and not obstructed by shrinkwrap material or
strapping. The work group will also look at the OEL format, support
implementation of the 3-digit bundle scheme for flats (that consolidates
two or more 3-digit ZIP Codes within bundles to align with automated
processing), and assess the L009 new labeling list to improve
efficiency, reduce partial tubs, and increase economies of scale for
mixed/residual bundles of flats.

The work group will also look at ways to reduce the use of sacks,
including some of the ideas discussed above. There will also be
consideration of expanding co-palletization of mixed classes. Farther
out, the work group may look at reintroduction of mixed/residual
pallets, since the APPS equipment can process bundles at a significantly
higher productivity rate vs. existing equipment.

[Please click here to view the
presentation](../MTAC1004/flat_op_10_28%20%201115am.ppt)

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

**Martin Bernstein and Vinnie DeAngelis**

Vinnie DeAngelis reported that the redesigned Confirm Delivery vs.
Service Goal reports are available online in less than a minute, a
significant reduction in report time from the last MTAC meeting when the
reporting time was about 45 minutes. First-Class Mail and Standard Mail
are available in separate reports. The certification process is
progressing, although the process is currently somewhat cumbersome. The
work group is addressing that issue and a more efficient reporting
process should be available before the target date for availability to
all subscribers, February 2005.

[Please click here to view the
presentation](../MTAC1004/MTAC%20041028General%20Session1135am.ppt)

## Adjournment 

## 

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