MINUTES
MAILERS’ TECHNICAL ADVISORY COMMITTEE (MTAC) MEETING
475 L'ENFANT PLAZA, SW,
Welcoming Remarks
Susan Plonkey, Chair, Postal
Joyce McGarvy, Chair, Industry
Ms. Plonkey welcomed the MTAC members and guests. She announced that the MTAC Members’ Room (4841) was formally dedicated
and that members are welcome to enjoy the facility, which has been furnished with photographs of historical significance to MTAC’s forty years of
service.
Ms. Plonkey introduced Lynn Smith, recently appointed Acting Vice President, Delivery and Retail. She announced a new work group (# 103)
that has been established to address management of service performance reporting. In the next few days members of the MTAC Leadership Group will
visit the
Ms. McGarvy added her welcome and announced that a new association had been approved for membership by the Executive Committee – the
National Association for Printing Leadership (NAPL). Ben Cooper is the association executive and Don Landis is the new MTAC representative for NAPL.
Other new association executives:
Printing Industries of
Edison Electric Institute Becky Harsh
Association for Mail Electronic Enhancement John Sexton
Other new MTAC representatives:
International Mailers’ Advisory Group (IMAG) Karen Houk
Newsletter & Electronic Publishers Association Helen Hoart
Mailing and Fulfillment Service Association Steve Colella
American Business Media Michael McShane
Parcel Shippers Association Wendy Smith
Association for Mail Electronic Enhancement Pam Kalvaitis
Pharmaceutical Care Management Association Tom Underkoffler
Legislative Update
Thomas G. Day, SVP
Government Relations
Please click here to view presentation
Mr. Day announced that both the
House and Senate versions of the postal reform legislation had been
approved. In turn, a Conference
Committee
will work out the differences
between the House and Senate versions of the legislation. The Conference Committee will produce a
report; that single version
of the bill would then require
approval by both the House and Senate.
Senate leaders have already
named eight members (5 Republicans and 3 Democrats) to the committee. House leaders have not named
conference members as of this
date. Although the conference has not
been formally established, it has already been determined that Senator Collins
will chair. Much of the work is done informally before
actually appointing the committee members, a process that has already
begun. The minor differences
will be resolved first and the
Postal Service has been a contributor to that process. The more challenging issues will be addressed
when the committee is
formally appointed, although
even then most of the differences will have been informally resolved. It appears that the process should be
completed by June,
but if there are any delays the
legislation may be deferred until the fall.
The major issue preventing
agreement is financial relief in the form of the escrow requirement and funding
the Military Service obligation. The Bush
Administration is the major
player in that process – including White House Domestic Policy, White House
Legislative Affairs, Office of Management and
Budget, Office of Personnel
Management and the Treasury Department.
A recent revision to the scoring of the pending legislation should
reduce the level
of concern in the
administration. The Congressional Budget
Office scored S 662 as a $ 1.5 Billion impact to the federal budget in its
first 10 years.
$ 1.5 Billion in ten years is a
relatively insignificant impact to the federal budget.
The legislation envisions a rate
cap on major Postal Service products based on the CPI. A key issue related to the rate cap is the
rule for exigency;
or in other words under what
circumstances might the rate cap be waived.
The Senate version has very strict – “unexpected and extraordinary” –
language;
while the House version has a
more relaxed – “reasonable and necessary”.
Some type of compromise language is likely needed to bridge the gap
between
these two versions.
The pending legislation requires
a recommendation for revisions to accounting rules made by the Secretary of
Treasury, in consultation with the Postal
Service. These recommendations would be sent to the
Postal Regulator Commission for final approval. The Postal Service currently
follows generally accepted
accounting practices (GAAP) as
defined by the Federal Accounting Standards Board (FASB).
Among the key topics that might
be revised would be the methodology for cost attribution and cost
allocations. Currently, USPS cost
attribution stands
at approximately 58%. In order to preclude cross-subsidization, all
products and services must at least achieve cost coverage. The remaining 42% of institutional
costs are covered through the
markup on individual products and services.
USPS agrees that any effective
improvements to cost attribution should be implemented.
The basic premise of effective
cost attribution must remain as clearly demonstrated cost causality. However, methodologies for cost allocation
will always border on
arbitrary and can have
dramatically different outcomes depending upon the methodology chosen. Cost allocation methods could significantly
increase the cost
coverage requirements for a
number of products and services.
Another key topic is an idea
that is already being suggested, that
the Postal Service revise its accounting treatment of retiree health care
costs. The Postal
Service currently utilizes the
FASB rule for a multi-employer plan.
This accounting treatment was reviewed and concurred with the USPS
external auditor. A request
by GAO in 2003 caused an
additional review, which again confirmed the multi-employer plan was
appropriate. It has been suggested that
USPS should either change
to a single-employer rule,
despite the opinion of the outside auditor, or might be compelled to do so
through upcoming rule changes under consideration by FASB.
Such a change to accounting
rules would bring forward to the current fiscal year a liability of
approximately $ 65 billion. For some
reason, it has been suggested
that this potential financial
impact is the basis to forego the financial relief provided in HR 22 and S
662. The argument being, it is more
important to pass legislative reform,
even if it does resolve the
issue of escrow payments or funding of the military service obligation. Whether, forced to change accounting rules
and / or faced with enactment
of legislation that does not
return escrow payments and the military service obligation, the Postal Service
would be placed in an untenable financial position.
Mr. Day commented on the current
rate case, an 8.5% calculation based on internal analysis of financial
requirements, versus the current legislation’s proposed
CPI cap method. He compared the historical rate increases
since 2002 which were developed without a CPI cap limitation. The rate increases since 2003 amounted to
13.9% (5.4% implemented on
period, the total rate increase
would have been 15.8%. Mailers would
have paid roughly $1.6 billion more during that same period. Any suggestion that pending legislation
will result in dramatically
different results on average is shown to be wrong when actual increases are
compared to CPI.
A question arose about another
filing for a rate increase, beyond the one just approved by the Board of
Governors. Mr. Day noted that the
Senate’s version does
allow the Postal Service to file
another rate case within a year of the legislation being enacted. While it cannot be guaranteed that another
rate case would not be filed,
the facts point to no additional
rate filings under current statute. If
the pending legislation is to be enacted, it must take place in 2006, thus the
timeframe for an additional
rate filing would have to take
place in 2007. It should be noted that
the most recently approved rate filing of 8.5% utilizes 2008 as the test
year. Thus the most recently
filed rate case envisions
revenue requirements into 2008. The
single major caveat would be a change to the financial relief granted in HR 22
or S662. If either escrow relief
or the return of the military
service obligation to the Treasury is withdrawn from the final legislation
enacted, then the revenue requirement in 2007 and 2008 would change
and potentially require an
additional rate filing under current statute.
As always the final determination on such a decision would remain with
the Board of Governors.
USPS Financial Update
Robert J. Pedersen
Acting Chief Financial Officer & EVP
Please click here to view
presentation
Mr. Pedersen summarized the
financial state of the Postal Service – that both revenue and volume are increasing,
that expenses are also increasing
(exacerbated by inflationary
pressures), and that year-to-date there is a small net gain after allowing for
the escrow obligation.
Year-to-date, revenues are
slightly over $37 billion, about 1% better than plan and 2.9% over the same
period last year (SPLY). Expenses are
$35.6 billion,
0.4% above plan and 4.2% above SPLY. Therefore, net income is $1.57
billion,slightly better than plan but below SPLY. The $1.5 billion escrow allocation reduced
the net gain after escrow
allocation to $74 million. Mr. Pedersen
added that the escrow payment is an actual cash amount to be set aside at the
end of the year, and
not a non-cash accrual. Concerning expenses, the largest increase was
in compensation and benefits ($817 billion, up 3.1%), but the largest
percentage increases
were in transportation and
fuel-related costs (11.7% and 18.1% respectively). The transportation and fuel increases cause a
trickle down effect on CPI and therefore
increased retirement benefits.
Mr. Pedersen reviewed volume for
the first half of the year, noting that First-Class Mail was down 1.3%, a
smaller decline than anticipated.
Standard Mail,
the largest volume component of
the mail, increased only 1.5%, half of the expected increase. However, Priority Mail and Express Mail
volume surged well above
plan – 7% versus 2.4% and 3.9%
versus 0.2%, respectively. Packages
increased 3.6% and Periodicals decreased 0.8%, both about in line with
expectations.
Recalling the dire predictions of
volume declines for First-Class Mail in the late nineties, Mr. Pedersen pointed
out that the decline has been much smaller than
predicted and, in fact, the
decline rate has moved toward zero in the last few quarters. Standard Mail has maintained a positive
growth over the past several years.
Total volume of 109.2 billion
pieces in the first half of Fiscal Year 2006 is 0.2% better than SPLY, and
revenues were up 2.9%. The Postal
Service now
processes mail for 145.1 million
delivery points, up 1.9 million vs. SPLY.
A healthy housing industry over the past decade has helped sustain
robust growth in
delivery points. Finally, he noted that total factor
productivity is up .3% for the period,and output per work hour is up 1.2%, both
versus SPLY.
During discussion, Mr. Pedersen
explained that part of the rationale behind the “forever stamp” involves the
elimination of certain high cost/low return
transactions, such as
individuals who buy two-cent stamps after a rate increase.
Rate Case
Stephen Kearney, VP
Pricing and Classification
Please
click here to view presentation
Mr. Kearney announced that the
rate case was filed on May 3 and it contains over 4,000 individual rate
elements. The rationale for the
rates is that pricing should
support growth and efficiency, and promote improved address quality. This rate case focuses more on shape-based
pricing, and less on the
traditional weight considerations. It includes
more incentive-based pricing plans to encourage mailers to redesign
their mailings to achieve
greater efficiency. There are also
incentives to encourage address quality improvements.
Mr. Kearney began with
First-Class Mail, which accounts for about half of Postal Service
revenues. There is an emphasis on
shape-based,
rather than weight-based rates,
partly because it was determined that certain large but lightweight pieces
actually cost more to process than some
smaller, heavier pieces. The focus was on aligning the rates with the
actual costs of processing the various types of mail. The proposed rates for
First-Class Mail are – single
piece, $.42, postcard $.27 and $.20 per additional ounce. The same principles apply to work share
mail. There is a
new business parcel category
with three levels of sortation. The
relatively higher increases for parcels are based on bringing the costs of
handling
in line with the rates. There are some incentives to encourage
mailers to reconfigure parcels as flats or single-piece First-Class Mail.
Priority Mail rates also have
been calculated to reflect actual costs, especially for large, lightweight
pieces. There are lower rates for
some heavier items. That is, the size and dimensions of a package
have more impact on rates than just the weight.
Therefore, a large
lightweight package would be
priced the same as if it contained a normally heavier content (a typical
practice of most commercial carriers).
As a consequence, some heavier
packages may cost less under the new rates than they do under the present
rates. The dimension/weight
formula encourages mailers to consider changing the characteristics of a package to take advantage of lower rates. Our proposal includes
making
the successful Flat-Rate Box experiment a permanent part of the Priority
line-up.
Mr. Kearney noted that Express
Mail rates would increase partly because of transportation/fuel costs, but the
incremental increases
based on weight are less than the current rate formula. A noticeable change in Express Mail is the new 1-pound rate to fill the gap between
1/2 pound
and 2 pounds. Currently, anything over a half-pound is charged the 2-pound
price.
In Standard Mail, rates have been
revised to reflect the changes in technology and operations during the past
several years.
There are a number of changes in
the new rate scheme, including incentives to increase drop ship mailing, more
presort options, a
distinct price schedule for
parcels (much like Parcel Post), and a new, hopefully short-lived “Not
Flat-Machineable” rate. The rate for
DDU letters has been eliminated,
and there are differential prices for pieces with detached mailing labels.
Mr. Kearney explained that the
new Periodicals rates were designed to encourage efficiency and simplicity
(through containerization
and drop shipment). There is a new “container charge” of $.85,
but its impact is considerably reduced when mail is presented on pallets
instead
of in multiple sacks. Drop ship incentives have been enhanced,
particularly for high editorial content periodicals.
Finally, rates for package
services have been designed to improve efficiency and to streamline product
offerings.
Retail Bound Printed Matter will
be eliminated to simplify options for the retail customer, and there are
incentives for DDU
and DSCF entry. Barcodes will be required on all Parcel
Select pieces.
Mr. Kearney described other
features of the rate case that support improved address quality and reflect the
modernized services
developed during the last few
years. Our proposal includes a low-cost One Code Address Change Service
(ACS) option and will allow us to
electronically note the incorrect address on
a letter, and then electronically send the corrected address to the mailer at a
much lower cost
than today. A First-Class Mail mailer may receive two notices without
charge (then $.05 per notice), and the Standard Mail mailer will pay $.02
for two notices (then $.15 for
additional notices). Electronic ACS
notification for First-Class Mail has been substantially reduced, from $.21 per
notice to $.06 ($.25 for other
classes), and manual paper notifications have been reduced from $.75 to
$.50. Certified Mail and paper Return
Receipt have increased slightly,
but Express Mail and electronic return receipt have been reduced.
Mr. Kearney commented that it
will probably take about a year for the rate case to be implemented. During discussion it was observed
that there are substantial differences
in the impact of the rate case of Confirm customers, depending on the mailer’s
use profile. Asked about
rates for flats and periodicals,
Mr. Kearney stated that there would probably be eligibility for rates similar
to First-Class One Code if similar handling
technology was available. He noted that the makeup and preparation
rules were now under consideration, and should be published in the Federal
Register in the fall. He anticipated no significant changes.
Update on Co-Palletization and Co-Mailing
Marc McCrery, Manager
Operational Requirements and Integration
Please click here to view
presentation
Mr. McCrery defined flat mail
co-palletization (bundles of Periodical or Standard Mail with different titles
combined on a destination pallet)
and co-mailing (multiple
titles/versions combined within presort destination bundles) The purpose of co-palletization is to reduce
the number of
containers, increase the use of
pallets, eliminate residual mail, and provide greater discounts for drop
shipment. The benefits of co-mailing
include
fewer sacks and bundles,
increased presort discounts, refinement of the sort level on pallets and
increased use of drop shipment.
Co-palletization and co-mailing
of mixed classes increases the opportunity to consolidate the flats mail
stream, reduce the number of
containers required, move mail
from sacks to pallets, move toward shape-based processing, increase the number
of discounts available to mailers,
and move mail closer to
destination. The Postal Service has
invited mailers, printers and transportation providers to participate in a
pilot test for
mixed-class co-palletization and
co-mailing (Periodicals and Standard Mail flats), which should be completed by
the fall. Then regulations will be
published in the Federal
Register and the service should be available during 2007.
MTAC Association Presentation
Derrick Miliner, Director Mail Management Policy
General Services Administration
Please click here to view
presentation
Mr. Miliner described the scope of GSA’s
responsibilities, which include Public Building Service, the Office of
Government-wide Policy (OGP),
and two areas that will be combined under
the title Federal Acquisitions Service (the current Federal Supply Service and
Federal Technology Service).
His office, the OGP, advises federal
agencies on mail management, as well as aircraft management, motor vehicle
management administrative
policy and real property management. That includes regulations, identification of
best practices, support of collaboration among federal agencies, and
data management and performance
measurement. In the area of best practices,
the OGP encourages sharing knowledge and the development of
innovative policies, practices and efficient
processes. To support these goals, two
awards are made every other year at the biennial Federal Mail
Symposium (the next in spring 2007). The Federal Mail Manager of the Year Award
and the Federal Mail Center Excellence Award each carry a
cash stipend of $2,500. Several federal groups meet during the
Symposium – a Regulation Working Group, a Best Practices Working Group
(which decides on the two awards), and the
Interagency Mail Policy Council (to which vendors, the public and others are
invited).
Mr. Miliner explained that his office is
promoting the increased use of data in the management process. Mail is a vital
part of the federal
business and there is an extensive program
to disseminate information throughout the federal system – through policy
advisories, an active list
serve of over 2,000 users from various
agencies and the private sector, and through quarterly meetings of the Interagency
Mail Policy Council
and the Federal Mail Executive Council.
The GSA is developing a web-based
performance support system to coordinate the annual mail management report that
large agencies
submit electronically or by mail. Finally, there is a new study on
undeliverable mail, a small but costly problem in the federal mail system.
During discussion, Mr. Miliner explained
that mail is processed differently in the 202-205 ZIP codes, in which it is
still irradiated. An off-site
facility opens all congressional mail, which
may result in a delivery delay of two or three days.
Association Presentation
Thom Roylance, President-Elect
National Association of College and
University Mail Services (NACUMS)
Please
click here to view presentation
Mr. Roylance explained that university mail systems handle three types of mail – inter-campus mail (which does not enter the USPS
mail process), outbound and inbound mail. Mail services are similar to those provided by the Postal Service and most operations are non-profit.
Before the regional association began forming there was little information sharing among colleges and universities. In 1978, some East Coast
institutions began talking about developing an association, and out of that a number of regional associations were created. A list serve, College
and
University Mail (CUNIMAIL), was begun at the
professionals the first national association was established, the National Association of College and University Mail Services (NACUMS).
The Association was incorporated in 1995.
The goals and objectives of NACUMS include enhanced communications among members and with the mailing industry as a whole,
increased training and educational opportunities, support for the mail services profession (mentoring, providing a forum for professionals, and
supporting their efforts to improve mail services at their institutions).
Mr. Roylance noted that there are a number of regional associations affiliated with NACUMS, which has been a member of MTAC since
NACUMS has a task force to improve addressing formats for colleges and universities, and it sponsors an annual industry benchmarking meeting
and an annual conference. There are about 600 individual members representing over 350 institutions in nearly every state.
Mr. Roylance pointed out that colleges and university mailing services handle a substantial amount of mail annually – over 17 billion pieces
and $3.2 billion in revenue for the Postal Service. In the future NACUMS will continue to expand its membership, enhance industry relationships,
and serve as an educational resource for the professional involved in college and university mail. He added that there are specific issues that are
of concern to NACUM members. One concern is that a Postal Service policy now defines some private apartment complexes as “dormitories,”
even though the students are tenants who live off campus. That creates issues related to security and delivery. Also, the Postal Service considers
a delivery completed when it is processed at the last Postal Service facility, even though the actual delivery to the institution may occur a day or so
later. That complicates delivery confirmation, which is often a parent concern. NACUMS is also interested in the impact the Internet has had on
college mail volumes, since students are avid users of text mail and e-mail, and most college catalogs, applications, grading reports and so on are
provided on web sites or through e-mail. Finally, NACUMS continues to be involved in improving address quality and in promoting more effective
mail forwarding.
Review of First-Class Mail
Maynard Benjamin, President
Envelope Manufacturers Association
Please
click here to view presentation
Mr. Benjamin explained that the focus of the First-Class Mail Summit was to address the issues of building First-Class Mail volume and value.
There were twenty participants, none of whom were associated with the Postal Service. Considering volume trends, the year 2005 was a pivot point,
when Standard Mail exceeded First-Class Mail volume. Currently it takes three pieces of Standard Mail to contribute the same revenues as one
piece of First-Class Mail. As that volume trend continues, the average per piece profitability of total mail volume will decrease. One approach to
offsetting this situation is to look at how to increase the value of First-Class Mail.
The
are finding that some companies are actually charging a fee to send a check through the mail. Even so the mailed bill (presentment) is still the norm.
And even though about 64% of households have Internet access, most do not use it for business purposes. There are issues of trust, safety and liability.
Financial and managerial individuals are more likely to move to electronic commerce, while marketers and consumers are more reticent. Nonetheless,
the Internet is a mature technology and its use will continue to increase slowly unless there is some impetus to move more rapidly into electronic
payments (e.g., a dramatic increase in postal rates). The big question is how high those rates must be to create a significant change.
The
shown that the look and feel of a mail piece affects its perceived value to the recipient. About 65% of the cost of mailing is postage, so mailers may use
the remainder to enhance the end user value of the envelope – through use of color, personalization, and other effective marketing processes. Mailers
also agree that the value of the mail can be increased by more flexibility in choosing mail services – allowing them to select and pay for only those
services that are advantageous – delivery time, forwarding, UAA information, use of Planet Code, variable pricing for distance mailed (since it costs
the same to send a letter around the corner as it does across the continent), etc. – so that providing a menu of services rather than a few bundled
services might reduce costs. Innovations may also affect the volume trend – imaging documents for hard copy delivery only at the destination,
using invisible inks for bar codes and giving up the space reserved for bar codes, incorporating bar codes and other information in stamps or indicia,
allowing Postal Service customers to design their own stamps, etc. The intelligent mail process can make a major positive impact on the value of the
mail, but there are also issues of privacy and security that mailers will consider. Businesses are becoming more sensitive to the value of the material
inside the envelope, and are putting more marketing and other information on invoices and bills.
Mr. Benjamin noted that the Postal Service has been a leader in enhancing the value of the mail, especially through the increased use of
information-rich bar codes and extensive tracking and reporting services. He added that there will be more summits in the future that will look more
closely at innovation and ways to create higher value for First-Class Mail.
During discussion, Mr. Benjamin observed that the new, larger bar codes would impact the current dimensions of the #10 envelope, which
will probably have to be redesigned in the near future.
Service Measurement and Improvement:
Management of Service Performance Reporting (WG # 103)
(formerly referred to as Standardized Reporting of Service
Performance)
Ellenor Kirkconnell and Jim Hess
Ms. Kirkconnell announced the formation of this new work group and invited interested MTAC members to contact her
at ellenor@nonprofitmailers.org. The first meeting will be held on June 1 at USPS Headquarters and there will be a teleconference
capability for those unable to make the trip. Mr. Hess announced that the Postal Service had put together a 5-6 person team to support
the work group.
Ms. Kirkconnell read the issue statement: The mailing industry creates many different types of service data and service performance
reports. The lack of credibility and absence of standardization often makes it difficult for the Postal Service to be responsive to these reports.
The lack of actionable data on which service performance measures could be enacted is frustrating for both the mailers and the Postal Service.
Thus, the desired results will be to develop a protocol using “industry gathered” delivery data to identify problems and perform diagnostics.
Implied in the work group charter is that the data will be similarly formatted, presented in a timely fashion, and will allow the Postal Service to
take corrective action.
There was a brief discussion on the similarity of the work group’s mission to that of Work Group 94, and Ms. McGarvy explained that
the latter work group’s mission turned out to be so broad as to dilute its effectiveness. Therefore, this more narrowly defined mission should result
in a positive result.
Seamless Acceptance and Induction:
Advance
Notification Streamlined Verification New WG # 102)
John Sexton,
Cindy Mallonee and Pritha Mehra
Please click here to view
presentation
Mr. Sexton explained that the First-Class mailers had indicated
an interest in the surface and air visibility available through the FAST
system.
He stated that the first steps will be to determine that
the system is able to integrate First-Class mailers. The work group discussed that issue at its
first meeting and developed a proposal for consideration –
to define capabilities of advance notification, streamlined acceptance and
visibility for First-Class
Mail. That became
the mission statement, and the work group agreed that electronic advance
notification would have to be created using current tools
(mail.dat, web services and postage statement wizard). The infrastructure for including First-Class
Mail must be developed. The work group
will look at
the current FAST capabilities, the MPTQM quality process,
the possibilities related to business mail acceptance, the relationship to
Confirm, and working
out the advance notification with mail service providers
and mail owners. The work group expects
to issue a final report in September 2007.
Seamless Acceptance
for MLOCR Environment (WG # 100)
Jay
Gillotte/Pritha Mehra
Please
click here to view presentation
Mr. Gillotte announced that the work group was looking at
how to convert the current paper-driven reporting system to an electronic
reporting process.
In the early pilot program, two mailers are identifying
changes that may be required to mail.dat and PostalOne! One participant has been able to generate
electronic mail.dat reports.
In the next phase, there will be a proof of concept that
the seamless acceptance and verification process is feasible, and in that phase
the pilot program
will look at the business mail entry (BME)
acceptance/verification process, the use of electronic documentation from
mailers direct to the Postal Service, generation
of electronic postage statements from electronic reports,
and a process to verify mail (including as many automated steps as
possible). The goal is simplified
acceptance/verification for MLOCRs. The work group will address the areas most
easily automated first – piece count, presort, automation capability and bar
code
quality. The more
challenging areas include address accuracy, shape and weight considerations,
accurate postage and dealing with non-automated mail.
Moving forward it looks as if the process will rely on the
4-state barcode (although other code combinations are possible), and there will
be a number
of steps in the final testing process: electronic mail documentation, mail entry and
tests (MERLIN), reconciliation of mailer reports, and Postal Service scans
and MERLIN data analysis, verification of presort at the
tray level, and ultimately transfer of the data to verify proper mail
quantities for rate qualification.
The first pilot mailing began on May 4 and the analysis of
that data and the development of criteria for the next pilot test phase is in
process.
Then the work group will look at the actual relationships –
how the mail is handled, where it is tested and verified, and how postage
adjustment will be made.
Streamline
Acceptance/Verification of Periodicals (WG # 99)
Scott
Lorenz/Pritha Mehra
Please
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Mr. Lorenz commented that the work group has agreed that
mail.dat will be the primary tool for the acceptance/verification process. It has
completed reviewing bookweight and ad percentage and work
remaining is to examine the final, consolidated process to calculate and verify
postage in
as short a time line as possible.
The work group has issued a document that defines and
tracks the bookweight process, including the use of mail.dat, and has developed
a
worksheet for DMU clerks that supports the use of the new
electronic file created in the DMU. It
has determined how ad percent can be captured and
transmitted to the responsible end user in the process (the
printer or PostalOne!).
The work group continues to work on the reports, how to
finalize ad percentage and how to get that information to the responsible end
user.
The next major step is to validate the process and conduct
a pilot test. Mr. Lorenz added that it
is important to gain the confidence and cooperation
of the audit bureaus.
Welcome/Messages
Don
Harle , Vice Chair, Industry
Alixe Johnson,
Vice Chair, Postal
Mr. Harle called
the meeting to order and announced that, in the future, there would be a new
procedure for posting minutes. Within
a week of the
meeting, the speakers’ PowerPoint presentations would be posted to the
RIBBs web site. Then the written,
detailed minutes
would be posted as
soon as available. The highlights would
not be provided for future meetings.
National Postal Forum (NPF) --
Alixe Johnson
Please
click here to view presentation
Ms. Johnson announced that the
next Postal Forum would be held in
She commented that the 2006
Postal Forum held in
(more than the goal of 2,500),
and 6,580 individuals participated. With
a goal of 490 exhibit booth sales, 163 vendors reserved 556 booth slots.
There were 138 workshops, more
than ever before, 12 business tracks, and 11 certificate programs. Next year there will be more certificate
programs and some level of
knowledge validation will be included in the program. Finally, the symposia program was excellent
and well
attended – Marketing to
Hispanics, Address Quality, Global Packaging, and Periodicals.
The exhibit hall had exclusive
hours with good attendance, including regular raffle drawings topped by the
giveaway of a new Mustang
convertible. The Industry Pavilion was a hit and will be
repeated next year. The PCC Leadership
Conference was well-attended and the level
of education and networking was
improved over last year. The National
PCC Day, the Fall anchor event, will be held in Dallas-Ft. Worth on
September 20.
The calendar of events includes
a call for papers (May 15) due by June 30 with final selections announced by
mid-August. The
teaser promo will be sent on
September 1, followed by the catalog of workshop/symposiums/special sessions,
etc. on October 1, and the
Area Coordinators will tour the
Forum site on November 8.
CASS-certified ZIP + 4 software with Primary Number Confirmation-
Use
in
Jan Caldwell and George Hurst
Please click here to view
presentation
Mr. Hurst announced that Primary
Number Confirmation functionality will be incorporated in all
CASS/MASS-certified ZIP+4 address
matching software and will be
required on all automation rate Mail after
undeliverable as addressed (UAA)
mail by 2010 and a recent study revealed that UAA mail may cost USPS $1.9
billion affecting 9.6 billion
pieces of mail. Estimates are
that the UAA cost to industry of wasted production and sales opportunities
exceeds USPS costs.
CASS-certified ZIP+4 address
matching software is a range-based product that assigns a +4 code for an
address within a specified
geographic area (e.g. numbers
between 1200 and
Number Confirmation using DPV
technology can identify those non-existent addresses. All CASS vendors already
have this capability built
into their software today as an
optional feature. Effective
to confirm the Primary Number of
an address in order to assign a ZIP+4 Code to it. When records are checked, one of several
codes will
indicate the condition of the
address – invalid primary number, valid primary/secondary numbers, valid
primary number only, etc. There are
about 20 codes that indicate the
quality of an address. Mr. Hurst
indicated that the new CASS requirement only applies to the Primary Number
of an address (usually street
number, e.g. 123 main street, where “123’ is the street number). The Secondary
number, which is usually the
apartment or suite number, is
not part of this requirement.
Ms. Caldwell commented that DPV,
as an optional product, has been available for years and some mailers have been
using it to improve
mailing list quality, a trend
that has been increasing. The Postal
Service has ascertained that the USPS addressing products are 99.91% accurate
for primary numbers. She also offered that the time required to
add a new address to the addressing products is about 21 days. Mailers have
suggested that the new
confirmation requirement will cause ZIP+4 coding rates to drop by 5%. This was not verifiable by the Postal
Service.
It is possible that Mailers are
including secondary numbers in their checks and, since the secondary numbers in
addresses are less accurate
and complete than primary
numbers, failing codes may be returned, which indicates this figure. As stated, secondary number confirmation is
not required under the new CASS
requirement. Additionally, examining some 337 billion addresses that were DPV
processing via NCOALINK
licensees, the Postal Service
showed a 98.1% confirmation of primary numbers, and one major mailer conducted
an independent study that
resulted in a 99.2%
confirmation.
Ms. Caldwell outlined the
benefits – reduced UAA mail, improved delivery operations, and increased
delivery point sequencing. She added
that one factor affecting UAA
mail is the retirement of carriers who, because of their experience, had been
delivering mail that should have been
UAA because of a minor defect in
the primary or secondary numbers. Ms.
Caldwell urged mailers to be proactive toward the upcoming change.
Run DPV now to identify and
correct bad primary numbers on their addresses and take advantage of AEC (I and
II) to get the correct address.
Then when the process becomes
mandatory in 2007, the mailing lists will be dramatically improved and the
impact will be minimal.
During discussion, Ms. Caldwell
conceded that the error rate for the secondary numbers was higher than for the
primary numbers, but
in the immediate future there
will not be a similar requirement for secondary numbers. Ms. Caldwell agreed that a correct secondary
number is
an important factor in achieving
a significant reduction in UAA mail. She
also added that there was a product, SuiteLink, that will assist in
providing
accurate secondary numbers for
business addresses, which will be released later this year.
Restoration of Periodicals (letters and flats) and Standard
Letters to
Alice VanGorder, Manager
Business Service Network Integration
Please click here to view presentation
Ms. VanGorder presented an
overview of a program to enhance delivery of Periodicals and Standard Mail to
the
recalled that in late August a series
of hurricanes, Katrina being the most damaging, virtually shut down Postal
Service operations in the New
delivery points were difficult
to confirm. An embargo on Standard and
Periodical Mail (Letters and Flats) was imposed in September for all 700, 701,
704 and 706 ZIP Codes. By May, 704 had been fully restored, but
specific codes in other areas were still closed down. By April 28, operations were
reinstituted and by May 1 a mail
restoration program was announced. The
primary process of the program was an address cleansing process to identify
addresses actually receiving
mail. Non deliverable addresses were
flagged in the Address Management System to reduce the volume of mail that
would
end up UAA for whatever reason
the address was no longer valid.
The embargo remains in effect,
although there is an exception for Periodicals (letters and flats) and Standard
letters if the mailer takes advantage of
the cleansing program. A similar exception for Standard flats should
be available by early June. The
procedure for participating in the program requires
registration with the
“yes” or “no” or a code denoting
mail is undeliverable because of a pending address change. Currently, 44
mailers have established 204 accounts and
submitted 330 files of which 252
were processed and returned. The other
files were rejected because of format or other errors. Almost a million records
have been processed and about a
third were tagged “yes,” a third “no”, and a third were undeliverable because
of pending change of address. In all,
64.3%
of any mail sent to those codes
would have been non deliverable without the cleansing program.
During discussion, Ms. VanGorder
and Ms. Caldwell discussed various aspects of the address change process.
Association Presentation
Joel Thomas, Executive Director
National Association of Presort Mailers
Please
click here to view presentation
Mr. Thomas stated that the NAPM
was established in 1981 and joined MTAC in 1986. He reviewed the objectives of the NAPM – to
represent
presort mailers, to improve the
relationship between the USPS and NAPM members, to support professional and
ethical business practices, to provide
education concerning USPS
services and regulations, and to support efforts by the Postal Service to
improve service and lower costs for presort mailers.
On the whole, NAPM members rely
on multiline optical character readers (MLOCRs) to presort mail. A major part of the members’ business
is mail consolidation. The average mail consolidation bureau
processes mail for about a hundred customers in a day, and there are about 200
bureaus.
So 20,000 mailers consolidate their mail down
to two hundred mailings to take advantage of presort and work sharing
discounts. Many are small mailers
who could not do it any other way.
Although it is difficult to
pinpoint mail volume processed through consolidation, it appears to be about 35
billion First-Class letters a year,
or about two-thirds of all
automation First-Class Mail. Members are
increasingly accepting Standard Mail letters for consolidation.
NAPM represents its members and,
allied with other interested associations, has participated in every rate case
since its founding, working
successfully to increase work
share discounts for automation mailers.
Also, a substantial effort is devoted to working with the Postal Service
on rules
and regulations since, next to
rates, they have a significant impact on the cost of doing business.
Optimization of Preparation and Entry
Developing an Interface to the AFSM 100 Automated Induction
Process (WG # 96)
Dave Williams/Mike Winn
Please click here to view presentation
Mr. Williams noted that the work group is looking at ways
to make the automated induction (Ai) process for the AFSM-100 as efficient
and economical as possible to reduce costs for both the
Postal Service and mailers. The first Ai
deployment is about half completed;210 systems
for 59 sites will be installed by
calendar year 2007.
The work group has begun looking at the combined cost to
mailers and the Postal Service. Part of
that study is an assessment of bundle breakage,
which may cost as much as $114 million a year. The work group is approaching the issue at
the processing level, looking at flats containers that allow direct
induction to the AFSM-100, and at the mailer level, looking
at how preparation might be changed to make the process more
efficient and less vulnerable to breakage.
In July, a “Dolly Dock” test will assess loading loose
flats on a specially-designed dolly dock that holds 12 trays. The docks will be
transported to a
facility in
automated debundling of strapped bundles on pallets, which
would then be placed in automation-compatible trays (ACTs) that are, in turn,
automatically loaded
on the dolly dock.
FAST for Periodicals (WG # 95)
Ted Freedman/Cindy Mallonee/Carla Siniscalchi
Please click here to
view presentation
Mr. Freedman
explained that the work group is responsible for developing a proposal for including
Periodicals in the FAST process. In
the FAST process,
both appointment level and content level information is provided to USPS. The appointment level information includes
the date,
time and entry
point for the drop shipment. The content
level information includes the mail class, shape, containerization and
volume. Currently,
both sets of data
are provided by the scheduler. With the
inclusion of Periodicals in FAST, USPS will provide a method for the mail owner
or
preparer to provide
the content level information, while the scheduler creates the appointment
level information.
The work groups
will look at recurring appointments, one-time appointments, use of mail.dat, a
mailer’s unique recurring sequence ID,
and the use of
PostalOne! as a communications venue.
Once in FAST, appointment scheduling will be available, as well as
information about
redirection when
required, and visibility for mail owners and preparers concerning reports.
Progress to date
includes continuing work with mailers to help them use FAST, continued
investigation into using mail.dat in the co-palletization
environment, and
final specifications for mail.dat and recurring appointments. The Postal Service is working with the
IDEAlliance on change requests
and a schedule to
deploy mail.dat and web services.
Software development will begin by the end of May, and recurring
appointment requests will be
available at the
end of October. Finally, a pilot test
will be conducted to allow some publishers time to register with PostalOne! and
get ready for
scheduling
appointments.
Improving the Drop Shipment Process (WG # 87)
Anita Pursley/Cindy Mallonee/Carla Siniscalchi
Please click here to view presentation
Ms. Pursley outlined the accomplishments of the work
group that include the deployment of the Facility Access and Tracking System,
integration of FAST with PostalOne!, barcode
specifications for mailer placards, and an update to the Publication 804, Drop Shipment
Procedures
for
Destination Entry.
The work group is now addressing problem facilities as
identified by mailers. There were 50
sites ranging from the more easily resolved
situations
in which high rejected appointments were matched by relatively low facility
volume, and acceptance of unscheduled arrivals to the more
challenging
situations of high volume and high levels of rejected appointments. Over 300 appointment slots were opened in the
review process, and
complaints
have decreased to an all-time low.
Ms. Siniscalchi announced that the Drop Entry Point System
(DEPS) should be on line by June 4. It
superimposes mail redirections on
the ZIP file and provides an earlier warning
system that was not available before.
The CDs that were previously distributed will soon be discontinued;
downloads
of the Product are available now free of charge without any password
requirement. There is information about
DEPS on RIBBS
(under
FAST/Surface Visibility). FAST
enhancements allow customers to create (depending on availability), update or
change appointments up to an
hour
in advance.
In response to mailer inquiries, label lists are the
baseline for the drop ship product, and the list will be expanded to include
annex and
alternative
processing facilities. The work group
will explore possibilities for information to be included in the product, and
to integrate the Label List
into
FAST. Finally, the Postal Service is
developing a web-based training course that will be available in July.
During discussion, Ms. Siniscalchi assured members that
USPS facilities would be reminded to keep posted contact information current.
Ms. Siniscalchi also asked that customers keep
their contact information current, and update through PostalOne! as needed.
Seamless
Acceptance and Induction:
Streamlining
Verification (WG # 93)
Debbie Cooper and
Robert Galaher
Please click here to view
presentation
Mr. Galaher focused
his presentation on the Concept Design and Test subgroup, since the other
subgroups have completed work. The
subgroup was
looking at processes for automated verification for Standard and Periodicals
mailers and how to develop a proof of concept for automated
verification using
pallet barcodes. The subgroup decided
that current systems can support the seamless acceptance process. Mailers would submit
information to
PostalOne! and mail.dat. will be able to verify mail. Then shippers would schedule through FAST,
mailers would submit postage
payments which
would be incorporated intoan electronic Form 8125. Shipments are scanned and verified, after
which the data becomes available.
Ms. Cooper
commented that three mailers at three different USPS facilities cooperated in a
pilot project – exchanged information, created a
container-specific
e8125, made appointments, and the scans provided data for analysis and
reports. The test revealed low scan
rates (partly because of
network
connectivity issues) and some problems scanning through shrink-wrap. The process was also new and unfamiliar to
the facilities. There are a
few technical data
issues that relate to conflicts among ZIP CIN, Label List and Drop Ship File
and the work group will address those issues.
On the business
side, the reporting process requires some changes, and shared roles (and
division of responsibility) need to be examined.
When the Design and
Testing Final Report is submitted, the work group will sunset. Pilot testing for Phase II will begin in June
(pre-induction event
reporting,
appointment updates, testing mixed loads after the PostalOne! release, and
post-induction processes).
During discussion
there was a question about whether the proposed pallet scans would involve a
fee, since there is discussion in the current
rate case about
charging for certain scans. It was
suggested that a passive scan process (e.g., RFID) might be more efficient and
economical than the
planned active
scan. Asked about barcode verification
at destination and the issue of an arriving at an incorrect facility, Mr.
Galaher conceded that there
might be a business
need to deal with an automatic postage adjustment when mail ends up at the
wrong destination, or developing a way to offer
alternatives to the
mailer.
Address Accuracy:
Address Quality Tools – MOVE Update WG #
98 and
Other Comments by Joe Lubenow
Please click here to view
presentation
Mr. Lubenow indicated a resolution statement for Work
Group # 98 “Address Quality Tools – MOVE Update” would soon be provided to
reflect
completion. Mr.
Lubenow then discussed the address quality issues as they relate to the current
rate case, R2006.
Address Quality Methodology (WG # 97)
Chris Lien
Mr. Lien reported that the address quality and best practices report prepared by the work group has been published on RIBBS. The work group
has released its final report and has provided a resolution statement to reflect completion. There are two best practices that the work group considers
worthy of further consideration and development: the list certification concept and the expansion of information dissemination.
Flats
Sequencing System
Address Location For Flats Sequencing System (FSS WG # 101)
Marc McCrery and James West
Please
click here to view presentation
Mr. West explained that when the concept of flats sequencing was first envisioned in 2003, vendor testing took place in the ensuing few years,
and full FSS deployment is now anticipated by the end of 2008, pending board approval. Work Group # 101 is charged with looking at address placement
on machinable flats, which involves coming up with requirements that the mailers can buy into. A major consideration is the “marketing space” that labels
often detract from.
Mr. McCrery outlined various options. Although the technology allows some flexibility, there are several requirements that are not easily
changed – bound edges of publications must be similarly aligned with the address appearing on the top third of the pieces without reading upside down,
although the address may be placed on the back or front of the piece. There are fewer alignment restrictions for envelopes or shrink-wrapped pieces,
with these mail pieces able to be oriented such that the address appears in the top third of the mail piece without reading upside down.
A survey has been developed and is being distributed by a number of MTAC member associations. The early responses indicated mailer
concern about any significant change, including the fact that in some configurations the address must be printed upside down. Mr. McCrery indicated
that the survey would be completed by the end of June and members were invited to submit comments.
Adjournment
Don Harle
Mr. Harle adjourned the meeting at