# Presentation: 136289

## United States Postal Service and Electronics Recycling

- Dan Barrett, Manager, Business Development
- Casey Huron, Environmental Specialist
- Federal Environmental Symposium
- June 5, 2007

**Notes:**
Thank you for having me today.  I’m so happy to be here with you today to talk a little bit about how the Postal Service is addressing opportunities related to eScrap – both internally and externally.   

We really feel like the eScrap issue is a great fit for us – we’ve begun to some real activity, and we’re excited about the prospects as we move generate ahead.     

Let me start by telling you a little about how we got here.  Just over a year ago, I was asked by our Chief Marketing Officer, Anita Bizzotto to research the electronics recycling space .  Anita gave me two reasons why -- First, to see if there might be a traditional business opportunity for the Postal Service—and Second, to see if we could meet other goals toward corporate citizenship.

Almost a year later, I’m happy to report back to her that electronics recycling is an opportunity for the Postal Service along both facets.  It’s an opportunity for us to do something good, while we do what we do best – move packages and mail.  

Today, I want to talk to you about what I’ve learned over the past year and tell you what has worked, and the remaining challenges we share. 

##  Who We Are
 Environmental Focus
 Current Programs
 Emerging Green Returns Niche
 USPS Services
 Programs and Pilots
 Conclusion

-  Environmental Focus
-  Current Programs
-  Emerging Green Returns Niche
-  USPS Services
-  Programs and Pilots
-  Conclusion

- Overview

**Notes:**
This is essentially an outline of our story.  Why we think we fit as part of the solution to the electronics recycling problem.  

First is who we are.  We move packages and mail – it’s what we do.  And we do it  in large scale,  and a connection to the household that has been built and established over 200 years.   As you’ll see, we truly are as one of our old slogans suggested - Everywhere every day.

Another reason we feel like we are a fit  is our environmental focus.  We are already pursuing a robust range of programs related to environmental stewardship and a natural extension is to reach out to work with firms in the marketplace that share our environmental focus.

Solutions – We have products today that are convenient to access, easy to use and low-priced

Programs – We’ve tried some things already, perhaps in partnership with some of you in the audience.  Several efforts have worked and are still working well.

Future – We are willing to get out of the box and try new things such as a new green rate designed for environmentally sensitive products.  

## Break-even

- No Gov’t Subsidy
- No Cross-Subsidy
- Regulated Pricing

- _Financial Mandate_

- Quality Service & Value
- Secure Communications
- Universal Service
- Uniform Rates

- _Service Mandate_

- Who We Are

**Notes:**
Our mandate requires a delicate balancing act...

We are required to achieve universal service without government subsidy or cross-subsidy among products.  

What does Universal Service mean?  

What it means is that we’re everywhere – from Alaska to Puerto Rico – in every rural town and urban area, in every office building and household.  And we’re there six days a week.

And what are we doing while we’re there?  We’re delivering and picking up mail and packages...

## Network and Infrastructure

**Collection &**
**Acceptance**

**Processing Facilities**

** ****Transportation**

**37,000              Post Offices**

**278 Plants**
**177 P&DC**
**90 Proc & Dist Facil**
**21 Bulk Mail Cntrs**
**8 Aux Svc Facil.**
**  ****6 Internat’l Svc Ctrs**

-  **USPS Owned Trucks**
** ****Commercial Airlines**
** ****Partner Assets**
** ****Highway Contracts**
** ****Rail Contracts**
** ****Surface Contracts**

**Delivery Vehicles**

**170,000 City Delivery Vehicles**
**10,000 Rural Delivery Vehicles**
**50,000 Rural Carrier provide own vehicles  **

**300,000      Collection**** ****Boxes**

- Who We Are

**290,000             Letter Carriers**

**140 million      Addresses**

**Notes:**
Accomplishing our mission requires an extensive network that serves every household and business no matter where it is located.  This infrastructure is what makes the Postal Service unique.  

This infrastructure is also what we leverage as we approach the electronics recycling opportunity.  

There are two ideas I’d like to speak to here:
(1)  Convenience generated by our collection and acceptance presence.  

Opportunities to lower cost within our network

Speak to slide.

## The USPS corporate environmental vision is to be a recognized leader that proactively embeds sustainable environmental practices into products and services, balancing the needs of our employees, our business, and the communities we serve.  

- The USPS corporate environmental vision is to be a recognized leader that proactively embeds sustainable environmental practices into products and services, balancing the needs of our employees, our business, and the communities we serve.

- Vision

- Environmental Focus

## Focus:
Sustainability
Clean Air
Clean Water
Recycling and Pollution Prevention

- Sustainability
- Clean Air
- Clean Water
- Recycling and Pollution Prevention

- Environmental Policy and Programs

- _Highlights:_
- Environmentally preferable stamps and packaging
- 37,000 alternative fuel vehicles
- 1M tons of wastepaper & other materials recycled annually
*WasteWise* Partner of the Year, Hall of Fame

- Environmental Focus

**Notes:**
Notes:
Packaging:  We’ve been looking at the packaging materials we provide customers to use with Express and Priority Mail to enhance the environmental characteristics of the material inputs we use like inks and adhesives. 
USPS is the first and only shipping or mailing company to earn “Cradle-to-Cradle” Certification based on the quality of raw materials used to produce Priority Mail and Express Mail envelopes and boxes. They’re 100% recyclable. And, more than 15,000 metric tons of carbon emissions will be prevented annually. 

Stamps – linerless labels, safer adhesives, soy-based ink

Alternative fuel vehicles:  The nation’s largest fleet, these vehicles are powered by electric batteries, compressed natural gas, ethanol, and biodiesel fuel to produce substantially less pollution.

Buildings going green:  Environmentally friendly features such as fiberglass insulation made with recycled glass; extensive natural lighting; more efficient, thermal window frames to reduce air leakage; alternative forms of energy for operations, including solar and geothermal systems; and water tanks to harvest rainwater from rooftops to reuse during dry periods. 

Recycling:  We recycle approximately one million tons of wastepaper, cardboard, plastics, cans, and other material, resulting in millions of dollars in revenues and cost avoidance annually, and reducing the use of landfills. 

## 
Electronic Equipment Recycling Partnerships

Topeka Area Retarded Citizens
475,000 computers recycled (FY05-FY06)
Dovebid Inc.
63,000 computers and printers reused (FY04-FY06)
Extreme Recycling Inc.
1,800 tons of e-waste recycled (FY04-FY06) 
UNICOR, Federal Prison Industries
1,200 tons of e-waste recycled (FY02-FY06)

- Electronic Equipment Recycling Partnerships
- Topeka Area Retarded Citizens
- 475,000 computers recycled (FY05-FY06)
- Dovebid Inc.
- 63,000 computers and printers reused (FY04-FY06)
- Extreme Recycling Inc.
- 1,800 tons of e-waste recycled (FY04-FY06)
- UNICOR, Federal Prison Industries
- 1,200 tons of e-waste recycled (FY02-FY06)

- Current Programs

**Notes:**
Management of electronics generated internally
The USPS established a contract with DoveBid, Inc. in 2004 to perform web cast auctions with equipment that was usable and salvageable. The excess computer equipment is transported nationally from various USPS facilities throughout the nation to Topeka, KS where the Topeka Material Distribution Center (MDC) receives the equipment for preparation for sale. All equipment is advertised “as is/where is”, eliminating logistics as a cost to the Postal Service since the buyer is responsible for shipping and transportation costs from its location.  The selling of the computers at fair market value raises the possibility that the computers will remain in operation rather than cannibalized and taken to a landfill.
TARC -  Topeka Association for Retarded Citizens, Industries (TARC) and the MDC located in Topeka, KS.  TARC Industries/Employment Services (TIES) is a non-profit sheltered workshop that provides employment opportunities and work related experiences for persons with developmental disabilities.  Their mission is to enhance the lives of people with developmental and related disabilities and their families, with service, support, advocacy and community involvement.  Today, they provide support by de-manufacturing electronic equipment to prepare it for recycling or data eradication.  The work is carried out in an enclave created for them in 2003 by the Postal Service.  This enclave is located at the MDC site at Forbes Field in Topeka, KS.  
It has provided 20 individuals the opportunity to work within their community and along side non-disabled workers. Their tasks include stripping down selected CPUs to the component level for both recycling and resale purposes; performing testing, cleaning and repackaging CRT monitors for inventory stocking purposes; and are utilized for the removal of sensitive data from hard drives from specific electronic equipment (CPU and Server Units) identified for destruction.   All non-usable material is recycled. 
Extreme Recycling Inc., formerly Extreme Dream, to recycle excess/obsolete postal commodities including electronic equipment.  Extreme Recycling has been recycling computer and electronic equipment since 1995.  The Postal Service and ER work proactively together to meet each of the stringent demands related to the controls and security of equipment such as equipment that is branded or not eradicated of data.  All material that is received, recorded and deemed recyclable is shredded, utilizing a Tryco Untha RS50 shredder in conjunction with a magnetic separator.  The shredding process reduces the material to a raw component level for consolidation and transportation to their refining partner.  Their refining partner is an international company located in both the US and Canada who further refines the commodity.  Ferrous and non-ferrous metal is processed locally. 
The partnership with ER has resulted in recycling cost avoidance in several areas.  They are located in close proximity to the Topeka MDC which results in lower transportation costs and a shorter travel distance for pickups.  The reduction in transportation contributes to less fuel consumed and air pollution generated.  ER’s recycling process, methodology and culture ensures that postal material will not end up in a landfill, thus, avoiding landfill costs and environmental fines.  Recycling and labor costs have been averted due to zero incidents of data breach. 
A Memorandum of Understanding (MOU) was created between the USPS and UNICOR in 2001, renewed in 2004 and again in 2006 through 2009, to recycle and reuse our surplus electronic equipment.  Recycling takes place at UNICOR recycling factories with no equipment, parts or residual materials being sent to landfills.  UNICOR has seven recycling facilities located throughout the US.  The MOU is a “no cost” agreement to both the USPS and UNICOR. 

## 
InkJet/Cell Phone Customer Mailback Program

InkJet cartridge mailback program since 1999
Cell phones recently added
Mailing envelopes distributed via counter display at USPS retail units
37 active USPS Districts, about 50% participation

- InkJet/Cell Phone Customer Mailback Program
- InkJet cartridge mailback program since 1999
- Cell phones recently added
- Mailing envelopes distributed via counter display at USPS retail units
- 37 active USPS Districts, about 50% participation

- Current Programs

**Notes:**
Management of electronics generated internally
The USPS established a contract with DoveBid, Inc. in 2004 to perform web cast auctions with equipment that was usable and salvageable. The excess computer equipment is transported nationally from various USPS facilities throughout the nation to Topeka, KS where the Topeka Material Distribution Center (MDC) receives the equipment for preparation for sale. All equipment is advertised “as is/where is”, eliminating logistics as a cost to the Postal Service since the buyer is responsible for shipping and transportation costs from its location.  The selling of the computers at fair market value raises the possibility that the computers will remain in operation rather than cannibalized and taken to a landfill.
TARC -  Topeka Association for Retarded Citizens, Industries (TARC) and the MDC located in Topeka, KS.  TARC Industries/Employment Services (TIES) is a non-profit sheltered workshop that provides employment opportunities and work related experiences for persons with developmental disabilities.  Their mission is to enhance the lives of people with developmental and related disabilities and their families, with service, support, advocacy and community involvement.  Today, they provide support by de-manufacturing electronic equipment to prepare it for recycling or data eradication.  The work is carried out in an enclave created for them in 2003 by the Postal Service.  This enclave is located at the MDC site at Forbes Field in Topeka, KS.  
It has provided 20 individuals the opportunity to work within their community and along side non-disabled workers. Their tasks include stripping down selected CPUs to the component level for both recycling and resale purposes; performing testing, cleaning and repackaging CRT monitors for inventory stocking purposes; and are utilized for the removal of sensitive data from hard drives from specific electronic equipment (CPU and Server Units) identified for destruction.   All non-usable material is recycled. 
Extreme Recycling Inc., formerly Extreme Dream, to recycle excess/obsolete postal commodities including electronic equipment.  Extreme Recycling has been recycling computer and electronic equipment since 1995.  The Postal Service and ER work proactively together to meet each of the stringent demands related to the controls and security of equipment such as equipment that is branded or not eradicated of data.  All material that is received, recorded and deemed recyclable is shredded, utilizing a Tryco Untha RS50 shredder in conjunction with a magnetic separator.  The shredding process reduces the material to a raw component level for consolidation and transportation to their refining partner.  Their refining partner is an international company located in both the US and Canada who further refines the commodity.  Ferrous and non-ferrous metal is processed locally. 
The partnership with ER has resulted in recycling cost avoidance in several areas.  They are located in close proximity to the Topeka MDC which results in lower transportation costs and a shorter travel distance for pickups.  The reduction in transportation contributes to less fuel consumed and air pollution generated.  ER’s recycling process, methodology and culture ensures that postal material will not end up in a landfill, thus, avoiding landfill costs and environmental fines.  Recycling and labor costs have been averted due to zero incidents of data breach. 
A Memorandum of Understanding (MOU) was created between the USPS and UNICOR in 2001, renewed in 2004 and again in 2006 through 2009, to recycle and reuse our surplus electronic equipment.  Recycling takes place at UNICOR recycling factories with no equipment, parts or residual materials being sent to landfills.  UNICOR has seven recycling facilities located throughout the US.  The MOU is a “no cost” agreement to both the USPS and UNICOR. 

## Emerging “Green” Returns Niche

- Environmentally motivated returns...
- Inkjet and Toner cartridges
- Obsolete electronics
- Compact Fluorescent Lighting (CFL’s)
- Prescription Drugs

## Over 400 million ink and toner cartridges used annually by consumers and businesses
Cell phone life span ≈ 1.5 years; 130 million more cell phones obsolete this year
500 million PC’s will have become obsolete from 1997 – 2007
100 million CFL’s sold annually; Wal-Mart pledges to sell one bulb to each of its 100 million customers
Everything from aspirin to Zoloft found in rivers and streams...

- Cell phone life span ≈ 1.5 years; 130 million more cell phones obsolete this year
- 500 million PC’s will have become obsolete from 1997 – 2007
- 100 million CFL’s sold annually; Wal-Mart pledges to sell one bulb to each of its 100 million customers
- Everything from aspirin to Zoloft found in rivers and streams...

- Emerging “Green” Returns Niche

## Emerging “Green” Returns Niche

- Environmental toxins drive focus...
- Example:  Obsolete electronics
- < 1% of total municipal solid waste, according to EPA
- As much as 70% of toxins that go into landfills
- Limited awareness, convenient disposal options
- Legislation at state level (CA, ME, MD, WA)

## 
USPS as Environmental Partner

USPS resources to collect, transport electronics
Meet shared environmental objectives
Fits USPS identity and core business
Postal Service executive support

- USPS as Environmental Partner
- USPS resources to collect, transport electronics
- Meet shared environmental objectives
- Fits USPS identity and core business
- Postal Service executive support

- Emerging “Green” Returns Niche

**Notes:**
We have valuable assets and resources all over the country  that can be leveraged...

We are already doing things to become more green...

There is interest at the top of our organization to engage...

## Factor
Convenience, Ease of Use....................
Low Price.......................................... 
Track and Trace................................ 
Trusted Brand...................................
Speed in Delivery.................................

- Maximizing Consumer Response

- _Factor_
- Convenience, Ease of Use....................
- Low Price..........................................
- Track and Trace................................
- Trusted Brand...................................
- Speed in Delivery.................................

- _Importance_
- High
- High
- Medium
- Medium
- Low

- Emerging “Green” Returns Niche

**Notes:**
Speed in delivery... 

I’d like to talk to this for a minute.  From what we’re hearing from you in the marketplace, there doesn’t appear to be too much time sensitivity toward when you get these items back.

I’ll get back to this later, as a possible opportunity for cost reduction.

## Emerging “Green” Returns Niche

| Core Value Item | USPS | Comments |
| --- | --- | --- |
| Retail Access | √ | USPS has 37,000 owned and operated retail outlets; Its next closest provider has about 4,500. |
| Drop Boxes | √ | USPS has over 300,000 drop boxes; nearest provider has about 48,000. |
| Pick-Up Service | √ | USPS delivers and picks up Monday – Saturday without additional fee; other providers often impose an additional fee for pickup at the household |
| Daily Delivery Points | √ | USPS delivers daily to 139.4 million addresses; nearest provider delivers to 6.7 million per day. |
| Couriers | √ | The USPS employs over 290,000 carriers; nearest provider employs about 85,000  |
| Pricing | √ | The USPS uses a straight-forward pricing approach; Others often use accessorial charges ranging from rural, residential, and extended area surcharges |

- USPS Fit – Convenience

## Recycler-Directed

Recycler pays postage upon receipt

Recycler controls label distribution
(with order, by mail, email, online or fax)

Recycler controls level & cost of service

Convenient entry options for the consumer

- Recycler pays postage upon receipt
- Recycler controls label distribution
- (with order, by mail, email, online or fax)
- Recycler controls level & cost of service
- Convenient entry options for the consumer

- USPS Services

**Notes:**
Part of the value of our returns solutions is that they allow you, the recycler, to have a great deal of control without sacrificing customer convenience

Recycler controls:
   Label distribution  - with purchase, by mail, email, online or fax 
  Level & cost of service 
  Where returns go

Convenient entry options:
Drop it in a collection box
Hand it to their letter carrier
Bring it to any Post Office location 

## USPS Products for e-Waste Returns

  Merchandise Return Service
  Parcel Return Service 
  Return Bulk Mail Center (BMC) Option
  Return Delivery Unit (RDU) Option

-   Merchandise Return Service
-   Parcel Return Service
-   Return Bulk Mail Center (BMC) Option
-   Return Delivery Unit (RDU) Option

- USPS Services

**Notes:**
We essentially have two main returns solutions – one that leverages our entire network end-to-end and another work-share product where the packages are picked up by the recycler or agent at a point within our network... 

## Merchandise Return Service

- Post Office

- Post Office

- Recycler

- P & DC

- Origin Bulk
- Mail Center

- P & DC

- Destinating Bulk
- Mail Center

- USPS Services

**Notes:**
This is a simplified version of how a returned ground parcel flows through our system today.

As you can see, there is extensive handling and transportation involved in this process.  

(Talk through process.)

The office serving the recycler will calculate the postage for the returns, and the recycler will pay.  

## Parcel Return Services (PRS)

Workshare program for returns 
Rates based on cost avoidance:
Return Delivery Unit (RDU)
Return Bulk Mail Center (RBMC)
Drop-ship in reverse – bulk pickup at a delivery unit or bulk mail center

- Workshare program for returns
- Rates based on cost avoidance:
- Return Delivery Unit (RDU)
- Return Bulk Mail Center (RBMC)
- Drop-ship in reverse – bulk pickup at a delivery unit or bulk mail center

- USPS Services

**Notes:**
Parcel Return Services is our work sharing product that akllows for some cost savings.

There are two choices:  One in which pieces are picked up from us at the origin delivery unit, (post office with delivery operations) and another in which pieces are picked up at the Bulk Mail Center nearest origin.

Most of the activity we’ve seen here related to electronics is the Bulk Mail Center option

I’ll try to speak a bit further to the difference between the two, and how they compare to Merchandise Return Service.

## USPS Services

- Parcel Return Service – RBMC Option

## USPS Services

- Parcel Return Service – RDU Option

## Programs and Pilots

- Returns envelope/label inside the OEM box
- Returns label via web sites
- Prepaid boxes purchased off the shelf at retail
- Post Office-based returns program

- Current Activity

## Active since 1999 with plans to expand based on last spring’s RFI... 
  Targeting select items – ink, toner, cell phones
  Negotiating with partner(s) 
  Co-marketing relationship
  Lobby presence based on office size 

-   Targeting select items – ink, toner, cell phones
-   Negotiating with partner(s)
-   Co-marketing relationship
-   Lobby presence based on office size

- Expand Initiative in Post Offices

- Programs and Pilots

## Programs and Pilots

- “Green Rate”
- Delivery is not time-sensitive...opportunities for cost avoidance?
-   Trapping at the origin delivery unit
-   Collection, aggregation at BMC

**Notes:**
The point I’d like to make here is that we are willing to get creative and do things differently...

Earlier, I spoke to the absence of time sensitivity on these items...Perhaps some other operational model is in order to support the need?

But what I can’t do is ask our field operations to learn a new process and hold things aside and have no adoption of the new process by the market...  

Instead we’d like to be very collaborative with you and have a few of you come stand next to us as we try to flesh this out.  One way we tried to start the dialogue was through the RFI we issued, and some discussions are continuing there...

But if you’re interested in sharing ideas, please see me after the session.

## 
Handling internal electronic waste in a responsible way  
Household take-back programs fit who we are
Existing programs are handling returns successfully today
National reach, convenience can be leveraged for  expansion
Exploring new lower cost options for partners that share our commitment.  

- Handling internal electronic waste in a responsible way
- Household take-back programs fit who we are
- Existing programs are handling returns successfully today
- National reach, convenience can be leveraged for  expansion
- Exploring new lower cost options for partners that share our commitment.

- Conclusion

**Notes:**
So, to conclude...I just want to affirm one last time that we really feel strongly about the eScrap opportunity