MINUTES

MAILERS TECHNICAL ADVISORY COMMITTEE (MTAC) MEETING

U.S. POSTAL SERVICE HEADQUARTERS

475 L'ENFANT PLAZA, SW, WASHINGTON, DC 20260

 

August 2-3, 2006

 

WEDNESDAY, August 2

 

Welcoming Remarks

Susan Plonkey, Chair, Postal

Joyce McGarvy, Chair, Industry

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Ms. Plonkey called the meeting to order. She reminded members that the MTAC Members Room (4841) is available to MTAC members when they are at Headquarters. She announced that the MTAC Leadership Group toured the FSS prototype in Indianapolis and members of the group would be pleased to share the experience with interested mailers. Also, six new MTAC work groups were established since the May meeting.

Ms. McGarvy announced the proposed 2007 MTAC meeting schedule: February 21-22, May 16-17, August 1-2 and October 24-25.

 

She introduced a new MTAC association executive, Erin Wilson of the National Association of County Recorders, Election Officials and Clerks (NACRC).

 

New MTAC representatives include:

 

Mike Herlihy American Business Media

Steve Piantanida National Catholic Development Conference, Inc.

Hugh Tolson National Association for Printing Leadership

 

USPS Financial Update

Robert J. Pedersen

A/Chief Financial Officer & EVP

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Mr. Pedersen presented financial data through the month of May. Revenues were $411 million above plan (3.8% over the same period last year SPLY); expenses were $281 million above plan (4.4% over SPLY) and net income was $1.6 billion, which is $130 million over plan. The escrow allocation is now $2 billion and will be increased monthly until it is $3 billion by year end.

 

First-Class Mail volume was down .6%, but, due in part to the recent rate increase, revenues were above SPLY by $470 million. Standard Mail volume increased 2.1% (partly because of a dramatic increased volume in May), with an increase in revenue of $599 million. There were increases in volume and revenue for Express Mail, Priority Mail and Package Services.

 

Year-to-date through May total revenues were $49.2 billion $12.3 billion retail and $36.2 billion commercial, and .7% other. The commercial revenue was about the same as plan (only .4% below plan, but a respectable $148 million). Retail, however, was more positive over half a billion dollars more than plan, up 4.4% over plan.

 

On the retail side, Click-n-Ship was up 55% vs. SPLY ($107.4 million in actual performance), PC Postage, including the eBay alliance, was up 61% vs. SPLY ($554 million in actual performance), Automated Postal Centers up 37% vs. SPLY ($267 million in actual performance), consignments up 4.6% vs. SPLY ($631.4 million in actual performance), Stamps by Mail up 103% vs. SPLY ($331 million in actual performance), but vending machines, probably affected by the Automated Postal Centers and consignments, were down 25% vs. SPLY ($322 million in actual performance).

 

Mr. Pedersen reviewed expenses, noting that compensation and benefits were $1.2 billion in actual performance, up 3.3% vs. SPLY; contract transportation $408 million in actual performance, up 11.4% vs. SPLY; other fuel-related costs $174 million in actual performance, up 16.7% vs. SPLY, and all other expenses were $174 million in actual performance, up 3.7% vs. SPLY. The total was $1.962 billion in actual performance, up 4.3% vs. SPLY.

 

Discussing the rate case, Mr. Pedersen commented that this rate plan has a historically low 1% contingency and a record low recovery of prior year losses. For comparison, the recovery for this plan is approximately $5 million versus $936 million in 1994, which also had a contingency of 2.0%. These are very low numbers, which testify to the dedication of the Postal Service to developing the lowest rates possible for its customers while also maintaining financial health.

 

The rate case assumes an ambitious cost reduction of a billion dollars a year, a high anticipated ROI on investments, and an assumption that the inflation rate will be kept under control and that the economy will continue to experience solid growth.

 

During discussion, Mr. Pedersen indicated that, even though it is a negative, the decline in First-Class Mail volume has been less than anticipated this year. Asked about ROI on capital investments, he said that for major systems, such as Flats Sequencing System (FSS), the ROI should easily be well beyond single digits; but for some investments related to preserving universal service a single-digit ROI would be difficult to exceed. Concerning fuel costs, Mr. Pedersen noted that an individual was appointed to focus on energy management, which includes both getting the least expensive energy and developing ways to conserve on energy use.

 

 

4-State Customer Barcode Update

Charlie Bravo

SVP Intelligent Mail and Address Quality

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Mr. Bravo commented that the 4-state barcode was first visualized in 2001 and on September 1 it will become reality. The OneCode vision is to have a single code for each mail type for letters and flats it will be the 4-state code. The name derives from the symbology that allows four different bar positions so that the barcode can contain more data the sender, the mail piece, a distribution code for sorting and routing, and encoded special services indicators and address change requests.

 

The single code consolidates what are currently multiple codes and printed notations into one barcode, which frees up mail piece real estate and allows the mailer to choose a customized combination of coded requirements. The code will be useful to the mailer and the normal mail process, but it will also be helpful to the Postal Service for internal purposes (quality control, tracking, etc.).

 

On September 1, the use of 4-state barcodes will become available across the system for letters, and mail will be eligible for automation discounts. Mailers may use OneCode Confirm for First-Class Mail and Standard Mail or OneCode ACS for First Class Mail (Standard Mail in the fall of 2007). On March 1, a modification will allow mailers to use the 4-state barcode for sorting only or for services or both.

 

Mr. Bravo stated that letter mail testing has been successful with over 20 million pieces tested. Flats testing is under way and final specifications will be decided on by December 1. Flats should be included in the spring of 2007, with the same automation discounts and Confirm/ACS services that are available for letters.

 

Concerning OneCode ACS, the 4-state barcode will contain complete instructions (no additional notation on the mail piece), provide a higher electronic processing rate than the present ACS system, allowing the mailer to include other service requests in the same barcode, and address corrections will cost $.21 per address (the current $.75 for hardcopy will not apply since there is no hard copy involved), For Standard Mail we will have a human readable Address Correction Requested or similar notation in addition to the 4-state bar code. This will allow the Standard mailpiece to be forwarded rather than wasted.

 

Finally, Mr. Bravo described what the entire system would look like with coding and scanning throughout the mail process mail pieces, trays, containers, and certain transportation units. He indicated that the value of that environment was the rationale for eventual mandatory use of the 4-state barcode. He urged mailers to begin including the 4-state barcode in future planning, noting that more information is available on the RIBBS website (/onecodesolution/). The Postal Service plans to require the 4-state bar code to get automation discounts starting in January 2009.

 

Strategic Vision New Global Business Organization

Paul Vogel

SVP and Managing Director, Global Business

 

Mr. Vogel commented that international mail revenues are about $1.8 billion. It has become clear that there is potential for increased international volume and the Postal Service has committed to pursuing that objective. In the past the Postal Service has been more reactive than proactive with regard to international mail and that will change with the development of a strategic plan for improving both volume and service. The plan should be completed by the end of the fiscal year. He added that Tony Pajunas had been appointed to his previous position as VP of Network Operations.

 

Introduction

Tony Pajunas

VP Network Operations

 

Mr. Pajunas stated that he was looking forward to working with the MTAC members to continually improve network operations.

 

Legislative Reform Status

Thomas G. Day

SVP Government Relations

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Mr. Day discussed the ongoing postal legislation process, noting that the Senate had appointed its conference committee while the House has not. Despite the fact House conferees have not been appointed, it has been determined that Senator Collins will chair the Conference. Although House Conferees have not been named there have been a series of informal meetings of the committees and their staffs.

 

The legislation is on a very tight timetable; only September and the first week in October are available for conference activity because the legislators will return to their districts for mid-term elections. However, the legislation could be considered in a lame duck session. A lame duck session is probable, since there is other business that must be addressed before final adjournment of the 109th Congress.

 

Significant differences remain between the House and Senate versions and the position taken by the White House. Earlier in the year it was felt that, if the main difference financial relief, and especially the Military Service obligation could be resolved, the rest of the issues could be handled through negotiation. That is no longer the case, since additional issues have become more challenging as the players involved become more polarized.

 

The White House prefers the Senate legislation as the basis for negotiations. However some of the issues that the White House prefers are at odds with various interested parties CPI rate cap with strict exigency, direction to the arbitrator to consider the financial health of the Postal Service when rendering decisions, enhanced work sharing language, provision for negotiated service agreements (NSAs), and revised workers compensation rules.

 

Four unions and three management associations are opposed to strict exigency (fearing salary caps); individual mailers and trade associations take the opposite view; unions and management associations are critical of the direction to the arbitrator provisions and the workers compensation as it stands. It has been widely reported that United Parcel Service supports movement of single-piece parcels to the competitive products category, while unions, management associations and many mailers prefer that they remain in a market dominant category. There are significant differences in how the product is priced; whether in the Market-Dominant or Competitive product categories.

 

Mr. Day noted that, since the last MTAC meeting, the number of issues that must be resolved has increased, the differences among various constituent groups has become more extreme and finally the time to approve legislative grows shorter. More issues, more extreme positions and less time available lead to the conclusion that likelihood of passage is diminishing.

 

Despite the diminishing likelihood of passage, meaningful postal legislation can still be achieved in the 109th session of Congress. No one should consider this legislation dead; there is still significant time and opportunity for enactment. Up until the time of adjournment of the 109th Congress, anything is possible.

 

Mr. Day addressed a continuing myth of pending postal legislation. There is nothing in the legislation, if passed, that would prompt the Postal Service to amend/reduce its current rate case. On the contrary, if the legislation does not satisfactorily address financial relief, there would probably be either an amended rate case or an additional rate case following passage of the current case to generate the additional revenue requirement.

 

 

National PCC Day

Alixe Johnson

Manager, Customer and Industry Marketing

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Ms. Johnson described National PCC Day, the Postal Services anchor event for the fall. The theme is Americas Partnership and will begin with a live telecast from Arlington (Texas) Convention Center, hosted by the Dallas-Fort Worth PCCs, where Postmaster General Jack Potter will deliver the keynote address. In addition to Dallas, two remote sites will be part of the broadcast: Lambeau Field in Green Bay, WI where DPMG and COO Pat Donahoe will be featured and Miami, FL, hosted by Anita Bizzotto, USPS EVP and CMO. The PCC Day celebration will be viewed across the country by more than 200 PCCs and thousands of PCC members with 21 USPS Officers participating at various events across the country.

 

Association Presentation

Major Mailers Association

Mury Salls, President

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Mr. Salls stated that the Major Mailers Association was formed to represent large mailers in the telecommunication and cable industries. The Association focuses on issues related to mail service quality and rates that affect large First-Class Mail mailers. To qualify for membership, companies must mail at least a million mail pieces a month. MMA members account for 95% of all telecommunications billing mail, and 90% of all cable billing mail.

 

The Association is run by volunteers from the member companies and the focus operational, with four standing committees. The Addressing Committee telecommunications and cable companies have lines into nearly every home and business in the United States and the Association is therefore a rich resource for projects involving address quality. The Committee and members have worked with the Postal Service and other entities that rely on correct addresses to improve address databases. The Technical Committee has been involved with transportation networks and with the seamless acceptance process. The Remittance Committee focuses on the more than $2 trillion in annual bill payments that are returned to the member companies. The Delivery Performance Committee has been working with MTAC and the Postal Service on Confirm.

 

The MMA provides a monthly information call service to its members, during which the committees report on activities and current events of interest to member companies. The important future issues of importance to the Association include seamless acceptance, and the benefits/liabilities of mail.dat and web services to First-Class Mail mailers. PostalOne! transportation tracking is important to members and they have been active in a number of Postal Service projects and pilot tests. There is also interest in delivery performance because member companies typically generate mail continuously and deliver it to the Postal Service on very short time schedules. Certain members are participating in the MLOCR pilot program.

 

Mr. Salls mentioned that members are concerned about undeliverable as addressed (UAA) mail since it imposes a significant cost on operations. A member study was recently completed that will create a profile of UAA billing mail. The analysis and results should be released in September. It is hoped that the profile will provide ideas on how to reduce UAA.

 

During discussion, Mr. Salls responded to a query about how the members felt about electronic billing. He commented that the benefits of eliminating the mail versus the marketing disadvantage of losing the monthly contact with customers is an ongoing discussion. He felt that if First-Class Mail rates became burdensome, some companies would begin to make that transition, adding that there is usually a flurry of invitations for customers to convert to electronic billing after each rate increase.

 

There was a brief discussion about vendors combining billings into one mailing (e.g., a cable company and a local utility). There are receivables issues that discourage that practice (who gets paid first, etc.) and there is consideration of the shock effect when customers get combined billings that may be perceived as being larger than normal when combined.

 

Association Presentation

Association of Priority Mail Users

Joyce Bagby, President

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Ms. Bagby stated the Association of Priority Mail Users (APMU) believes that Priority Mail is considered a successful product and the Associations mission is to preserve its usefulness and work to make it an even better service. APMU was organized in 1993 and joined MTAC the following year. Its mission is to support Priority Mail at competitive levels of rates and service, and to keep members informed about mailing issues. There are two current priorities to obtain open-and-distribute discounts for Priority Mail, and to promote rates that reflect the difference between commercial and retail use of Priority Mail.

 

Ms. Bagby listed the past presidents and current officers and staff, noting that many had taken part in the MTAC process. APMU maintains an aggressive communication program with its members and interested individuals in the Postal Service and the mailing industry. Regular e-mail is used to inform about current events of interest, minutes of the Board of Governors regular meetings are prepared and distributed, written reports on APMU activities are regularly released to members and the public, special bulletins are published when urgent issues arise, and regular breakfast briefings are held at which senior Postal Service executives are invited to speak. Finally, there is a regular meeting held on Monday of each MTAC meeting week. APMU represents its members to the Postal Service, the Congress, GAO and at Postal Rate Commission hearings.

 

Ms. Babgy closed by underlining the importance of MTAC to the Association and its members for the education and information provided, for the ability to network with Postal Service staff and industry colleagues, and for the opportunity to participate in MTAC work groups that are concerned with Priority Mail rates and service issues.

 

Seamless Acceptance and Induction:

 

Optimizing Parcel Preparation and Entry for Seamless Acceptance (New WG # 109)

Chris Finley, Wendy Smith and Jim Cochrane

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Ms. Smith and Mr. Cochrane described the goals of this new work group. It will look at seamless acceptance and electronic documentation, payment solutions and the distribution network, which will involve parcel preparation and entry. The work group will seek to identify approaches to accomplish optimal parcel preparation, specify work share discounts, and develop ways to notify customers of any changes in preparation specifications. And it will look at expanding electronic verification and postage payments.

 

The work group hopes to encourage a dialog between the Postal Service and industry concerning network locations and the timing to establish regional distribution centers. Then, when the data is available, the work group will try to continue the dialog with regard to costs and operational implications. The objective is to develop a plan to meet the Postal Service goals for network alignment to optimize parcel preparation and entry, while keeping the work share pressure points in mind. The first work group meeting is scheduled for August 21 and the initiative should be completed by year end.

 

Advance Notification Streamlined Verification (WG # 102)

Cindy Mallonee and Pritha Mehra

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Ms. Mehra commented that this work group is concerned with First-Class Mail mailers interest in advance notification, pre-notification, simplifying acceptance and visibility. Its first meeting on May 16 defined the vision and strategy, and the first action item was to determine what mailers are already doing in these areas. Several members of the work group agreed to complete a survey as a baseline of information. The results were encouraging because it appears that much of the information that will be provided electronically is provided today in paper reports. The work group will then look at what the Postal Service needs to properly plan for advance notification. Then the task will be to harmonize the two sets of requirements.

 

The work group meeting on August 1 resulted in discussing a complete laundry list of the data elements needed for pre-notification, seamless acceptance, payments and visibility. There are systems in place to capture the information such as FAST, mail.dat, and PostalOne!

 

Ms. Mallonee discussed the data elements that would constitute the basis for development of the final product. The data elements relate to induction location, date and time, any changes that may be required in the induction schedule, the physical parameters of the mail (size, shape, volume, containers, etc.), address and service information, and any special handling requirements.

 

The next meeting is in Dallas (including a site visit to view surface mail scanning). The work group will continue to refine data and processes as it moves toward its final report.

 

During discussion, asked about the small mailers, Ms. Mehra commented that simplified approaches like the Postage Statement Wizard will be leveraged to cover small volume mailers.

 

Seamless Acceptance for MLOCR Environment (New WG # 100)

Jay Gillotte/Pritha Mehra

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Mr. Gillotte reported that Phase One is well under way. This has involved loading files into the PostalOne! test site, specs for refining the software, and integration of a mail,dat capability, which will be completed by November 2007. Phase Two is also in progress with data from the MLOCR mailer providing presort data, mail piece count and information of short trays. The data was collected from two weekly mailings from each pilot participant, who began the pilot program in May 2006. Samples are run through Merlin as a comparison control. So far the data indicates that presort is possible. Other positive accomplishments of the pilot effort include piece counts to identify short trays, verification of OCR machine reading accuracy, and validation of the POSTNET codes.

 

The work group plans to expand the pilot test from two to four sites, including tray scans, and finally explore a postage assessment approach, which is a sensitive issue because there must be consistency from class to class. Ms. Mehra added that there is a serious concern about postage assessment because, under the present system the mailer can take back the mailing for further processing; under the new system that will happen and postage will be processed at the revised rates.

 

Streamline Acceptance/Verification of Periodicals (WG # 99)

Scott Lorenz/Pritha Mehra

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Mr. Lorenz stated that the work groups objective is to develop a way for mailers to use PostalOne! for payments regardless of how they are currently making payments. Since the last MTAC meeting the work group has defined ownership of final inputs and edits whatever the source. Working out the ad percent adjustment was challenging, but the work group arrived at a possible solution, a ready-to-accept status for containers that are ready to mail but which might need a last minute ad percent revision.

 

The work group met before the MTAC meeting to validate the process flow and a report is ready that includes specifications for modifying PostalOne! The pilot test was completed in July. Mr. Lorenz discussed several postage payment scenarios developed by the work group to compare how different situations would be processed once the system is in place. By November the work group should be able to complete its final report. There are a few open items to be addressed final design of the postage register, including an effort to get the primary auditors to agree that postage statements on PostalOne! are acceptable to auditors in general.

 

Asked about when to expect implementation, Ms. Mehra commented that the PostalOne! release 11.0 will bring in mail.dat for First-Class Mail mailers in November, and that will be followed by attention to the rate case and then a modification for payment simplification. Then attention can be directed to the Centralized Postage Payment (CPP) mailers issues and that will probably be in mid-2007.

 

Streamlining Verification (WG # 93)

Debbie Cooper/Bob Galaher

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Mr. Galaher reported that work group 93 was established to enhance verification, particularly drop ship and mail induction. Three teams tackled the job, two of which have completed work a vision team to develop an overall approach, a barcode team to evaluate barcode quality, and a concept and design team that still has a few issues remaining. It is still working on the electronic 8125 and finishing open business issues rules and processes for electronic information exchange. Other issues have been identified and handed off to other groups, such as the automated postage adjustment process, sibling and original container differentiation, and handling unscheduled drop ship arrivals in the eDropShip environment. The Phase 2 eDropShip pilot project is creating the discount validated electronic 8125, the processing of surface scan information, working on entry point conflict/resolution data, and identifying and resolving any gaps in the business process.

 

Next steps continue the pilot programs, move testing to PostalOne! out of the test site, and providing the work groups final report.

 

 

Service Measurement and Improvement:

 

 

Service Performance Reporting Process Standardization (WG # 103)

Ellenor Kirkconnell and Jim Hess

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Mr. Hess noted that this was a new work group announced at the last MTAC meeting, but it has held a number of meetings since then. It is addressing standardization of service performance reports and data to enhance the credibility and usability of this important industry information. There needs to be a way to coordinate the various data resources of the Postal Service and data gathered by members of the mailing industry who collect and analyze performance data within their own companies.

 

Ms. Kirkconnell commented that the work group had discussed the importance of developing a method to identify actionable data versus data that may not be actionable but that has value for other purposes. One possibility would be to develop a mechanism by which data could be posted to RIBBS. The kinds of data that might be useful would include tracking information location and type, for example and information about service impacts rerouting, facility availability, etc. Although it is not yet clear what information the industry could provide, the work group is in the process of trying to identify the kinds of data that companies collect that might be useful.

 

Mr. Hess suggested that important information could be disseminated through RIBBS, e-mail alerts, a variation of ePubWatch, and through services provided by the BSN. The work group will also look at some of the established information vehicles Surface Visibility, CONFIRM, seamless acceptance, etc.

 

Sales Group New Position, Manager of Business Partner Strategies

Anita Bizzotto

Chief Marketing Officer & EVP

 

Ms. Bizzotto announced that the Sales Group has established a new position, Manager of Business Partner Strategies, and has appointed Sherry Suggs to the position. She will develop relationships with members of the mail service industry to help grow business for the mutual benefit of the mailers and the Postal Service.

 

Recognition of R.R. Donnelley and Other Comments

Postmaster General, Chief Executive Officer John E. Potter

 

Mr. Potter expressed appreciation for MTACs continuing support and contribution. He briefly discussed service and service measurement, emphasizing that the goal of the Postal Service is to be transparent and provide mailers as much information as possible. He added that the same goal might be appropriate for the mailers as well, since providing complete information about the mail process included data that comes from the mailers the types of sorts selected, address list quality, printer and other vendor reliability, and especially the impact of seasonality. Seasonality affects both the Postal Service and mailers.

 

Mr. Potter commented that being able to see the entire mail stream would be valuable to both the Postal Service and the mailers. The process should be two-way, and when merged, becomes an extremely valuable resource for all to derive benefit.

 

Mr. Potter then recognized R. R. Donnelley, represented on MTAC by Clarence Banks, for developing a concept called OneSite that is an important first step for the industry in the creation of that kind of transparency. He presented a special Innovation Award to Mr. Banks, for R.R. Donnelley, for its OneSite Mailing Campaign Tracking Tool.

 

On a separate topic, Mr. Potter announced the successful negotiation of a number of contracts with major commercial carriers, including United Parcel Service, FedEx, American Airlines, Continental and others. These are relatively long-term contracts extending out a number of years that provide stability to transportation planning.

 

He mentioned other important issues on the horizon upcoming labor contracts are due for renegotiation, postal reform legislation is still pending, and there is a need to continue to innovate to further enhance the mailing industry in the 21st century.

 


THURSDAY, August 3

 

 

Flats Sequencing System (FSS)

Indianapolis Test Update and Next Steps

Rosa Fulton

Executive Director, Flats Sequencing

 

Ms. Fulton described the FSS prototype test machine that is about half the size of the production version. The Indianapolis test took place from April 7 through June 10, covering three ZIP codes and both city and rural carrier routes. The test looked at machine performance, impact on mail processing, impacts on city and rural delivery and customer service areas.

 

The machine performance was measured and sort accuracy was satisfactory (98.5%), acceptance rate was a little lower than expected (90%-93%), and throughput was acceptable (an average of 800 pieces per hour). Ms. Fulton showed photos of the normal casing process and the reduction in workload during the test the photos showed a dramatic reduction in the handwork when flats were presorted to delivery point sequencing prior to handing off to the carrier.

 

Function 4 activity involves the manual unbinding of flats by clerks prior to delivery to the carrier for casing, a labor intensive process. During the test a typical daily load of 700 bundles was reduced to about 40 bundles that required manual casing a significant reduction.

 

The test also involved assessment of flats with regard to address quality, placement, address label print quality, and location of the address elements on the label. Elements that create problems for the OCR scanners include font size less than 8 points, horizontal spacing between characters, vertical spacing between lines, any large gap between the city and the ZIP code, and extraneous information printed near the address by the mailer (e.g., ad messages). Finally, the quality of the printing can cause problems (blurring of characters, skew, reflectance, etc.). In addition, there are errors made by the mail preparer that affect proper sortation and the ability to deliver the mail to the carrier. For example, the test revealed incorrect street numbers, missing address elements (like the street number or street name), misspelled street names, etc.

 

The factor that saves much of this mail from becoming undeliverable as addressed (UAA) is the extra effort of the regular carrier, who may interpret some of the errors and still deliver the mail piece. However, if the mail is run through a sorting machine, such as the FSS equipment tested, it would be rejected and the carrier would never see it.

 

The results of the test showed that 70% of the mail was barcoded. Of that mail, 70% had an 11-digit barcode, 25% a 9-digit barcode, and 5% a 5-digit barcode. Of all the barcoded mail, 91% was accurately barcoded that is, the barcode reflected the complete address. The barcode errors for 5-digit and 9-digit were nominal, less than 0.2%; but 8.7% of the 11-digit addresses were in error. Of the latter group, 47% of the mail had an error in the +4 segment of the barcode, 30% in the delivery point, 4% in the zone and, surprisingly, 18% at the SCF level.

 

Ms. Fulton commented that there would be a follow-up test at the Dulles facility for comparison. That next step involves a year-long full-scale pre-production FSS machine test, which should be completed by June 2008. During that time the Postal Service will address the transition to the new system, and will work with business partners and MTAC during the process. During discussion, Ms. Fulton noted that this test only looked at how the system responded to the address characteristics and was not concerned with address databases or overall address quality.

 

Pricing Update

Joe Moeller

Manager of Pricing

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Mr. Moeller discussed the rate case, which promotes shape-based pricing, a focus on incentives within the subclasses, an increase in mailing choices, innovations (such as the Forever Stamp), and new low-cost address change options. Concerning the time line, the rate case was filed on May 3 and the PRC has ten months to hear the case (it is 30% through that process). There have been 54 interveners, and 26 of them have filed 2,600 interrogatories. Hearings begin August 3 and run through the end of the month. The Postal Rate Commission (PRC) will render its recommendation in early March, 2007, and the Board of Governors should render its decision shortly thereafter. Implementation is expected by May or June 2007.

 

There are a wide variety of issues, and the Federal Register process will begin shortly. The proposed standards may be published by late September, and the Postal Service appreciates everyones patience. Anyone interested in the details of the case can find information on the Postal Rate Commission web site (www.prc.gov) -- click on Rate Case 2006. There is a wealth of information including the list of interveners, the interrogatories and responses, hearing schedules, etc.

 

New Standard for #10 Envelope

John Schlich

MTAC Representative for the Envelope Manufacturers Association (EMA)

 

Mr. Schlich announced that the industry, through the EMA, has agreed to revise the manufacturing specifications for the standard #10 window envelope. The current window is placed 7/8-inch from the left side of the envelope and -inch from the bottom. The left measurement will remain the same, but the bottom measurement will be changed to 5/8-inch from the bottom fold. The window size will remain the same 1 1/8 inch by 4 inch. Although the current specifications work well for most situations, there is some equipment that has a 1/16-inch tolerance that sometimes results in an obscured barcode.

 

Mr. Schlich commented that the change would apply only to off-the-shelf standard #10 envelopes and not smaller or larger window envelopes. Major mailers may continue to order custom envelopes.

 

During discussion, there was a suggestion that envelope manufacturers and sellers advise customers to run tests on envelopes before ordering. This is especially important when mailers begin to use the new 4-state barcode.


Association Presentation

National Association of Advertising Distributors (NAAD)

Keith Judkins, Executive Director.

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Mr. Judkins explained that, before NAAD became an official association representing mainly mailers of advertising materials, the seminal organization was composed of companies that distributed ads door-to-door during the 1940s. That group evolved until 1979, when the NAAD was incorporated. There are 16 member companies.

 

The Associations main mission is to develop and maintain a national residential database for the benefit of its members. Members contribute to the maintenance and the database contains nearly every deliverable residence address in the country. Other marketing tools made available to members include mapping and demographic tools.

 

NAAD was one of the first associations involved in MTAC. MTACs interest in address quality is one of the resource areas that NAAD can support. The Association also supports MTAC by encouraging member participation and by distributing MTAC information to its members.

 

MTE Forecasting and Tracking (WG # 108)

Kevin McPhillips and Jo Ann Miller

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Mr. McPhillips explained that the work group is going to look at ways to plot mail transportation equipment (MTE) availability and ensure efficient and timely delivery to customers. Lack of MTE can range from a minor inconvenience to a real business emergency. In fact, the Postal Service expends substantial effort and significant expense to provide customers with needed MTE in a business emergency.

 

A planning meeting on July 6 defined the basic objectives to answer the questions who needs what, and when and where do they need it? The planning group arrived at three specific objectives to develop a system that identifies future requirements and create a plan to make purchases six months in advance; to develop a way to anticipate customer needs so an inventory response can be made on two or three weeks notice; and to develop a model that will reveal trends that apply to specific classes of mail.

 

The work group will need assistance in developing a survey to get at valid answers to the who, what, when and where questions. It will also look at development of an awareness campaign so that both customers and the Postal Service will be more informed about MTE issues. Finally, the solutions must be ongoing and adaptive to changing circumstances.

 

FAST/Surface Visibility for Parcels (WG # 107)

Carol Kliewer and Pranab Shah

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Mr. Shah explained that the theme of the mission statement is to integrate the requirements and feedback of parcel shippers into the FAST process. There should be improvement to the drop ship process to help improve workload management in the various processing centers.

 

Ms. Kliewer reported that an initial telecom was held to discuss proposed membership and work group objectives. There is representation from PostalOne!, Intelligent Mail & Address Quality, Electronic Verification System (EVS) and Operations. There is a need to include someone from Package Services. There are a number of major companies participating from the industry, including Clarke American, Pitney Bowes, Endicia, Newgistics and others. Additional corporate volunteers are needed to ensure a balanced work group.

 

Improve and Integrate Data Sources that Facilitate Optimal

Mail Preparation and Induction (WG # 106)

Brian Euclide and Bob Galaher

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Mr. Euclide said it has become clear that there are many information resources in the Postal Service and in industry. Except within the Postal Service few communicate with each other. This silo effect is the characteristic of the overall information resource in the Postal industry that the work group will address. If information can be integrated (shared) the process of mail preparation, drop ship, and overall mail movement and tracking can be improved. The work group will look at methods to facilitate information exchange, and identify changes that would be needed in business rules and processes.

 

The work group will begin by defining the problem and determining the needs of the Postal Service and the industry. The work group has met twice (July 18 and August 2) and the general scope of the work was defined identifying the stakeholders, looking at current conditions, identifying business needs, and then developing a set of recommendations. The work group began to discuss business processes that include current high-level planning within the Postal Service, available data sources, quality control, the character of current data elements, and the need for a common language because there are a wide variety of players.

 

One specific and important business need is to develop a system that allows a mailer to create a container of mail and determine exactly where it should be entered into the Postal Service system to obtain the most advantageous discounts.

 

The work group has made a start at identifying business rules that impact the issues timing of data entry, updates, timing issues that relate to mail preparation and scheduling, contingencies, and data ownership and responsibilities. All of these issues will be on the work groups agenda. The time line for the final product has not been determined.

 

Developing an Interface to the AFSM 100 Automated Induction Process (WG # 96)

Mike Winn and Dave Williams

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Mr. Williams reported that two tests are planned to determine how best to move the flats output from a mailers facility into the Postal Services P&DC that will process the mailing. The first test will involve a major mailer who will place loose flats in automation compatible trays (ACTs), load the ACTs onto a specially designed Dolly Dock that can be wheeled onto a vehicle and transported to the P&DC. Once there, the Dolly Dock will be moved to an automatic induction (Ai) system where the ACTs will be automatically unloaded and sorted on the AFSM Ai.

 

The second test involves equipment that will automatically unbundle strapped flats (no shrink-wrap, place the pieces into ACTs, for automatic unload on the AFSM Ai.

 

These tests will occur on August 23.The work group can visit the test facility, Southern Maryland P&DC, to preview the Dolly Dock process on August 17. Then on September 14 the work group will meet via telecom to work out the work groups final report, a draft of which should be completed by November 1. When submitted to MTAC for review, the tasks related to this work group will be taken over by the FSS work group.

 

FAST for Periodicals (WG # 95)

Ted Freedman, Cindy Mallonee and Carla Siniscalchi

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Mr. Freedman commented that FAST allowed the Postal Service to know when periodical mailers would appear at loading docks since there was no prior notification required for that mail class. At a future time that notification will be required. The work group is ready to conduct a pilot program in the New York area that will identify the relationships of the players, the logistics and scheduling issues, and facilitate mailer registration through PostalOne!

 

The pilot will last about three months, after which it will be expanded to include any mailer who desires to participate (about January 2007). FAST for periodicals will be implemented system-wide by July 2007, at which time any mailer who wishes to use drop ship must be registered to participate.

 

The Postal Service has committed to an internal training program to emphasize the importance of periodical mail and the need to facilitate the timely handling and delivery of periodicals.

 

Ms. Siniscalchi discussed next steps, including a process whereby the scheduler can create a shell appointment that will allow mail preparers to fill in the details. The Postal Service is working with IDEAlliance to develop a schedule to deploy mail.dat for periodical mailers by January 2007.

 

Improving the Drop Ship Process (WG # 87)

Anita Pursley, Cindy Mallonee and Carla Siniscalchi

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Ms. Siniscalchi discussed the fall mailing season and how FAST can help the Postal Service plan for that heavy mail season by collecting input from mailers about last years experiences and this years plans. FAST can also provide information about changes in slot and volume capacities, and levels of declined appointments. FAST is already conducting biweekly calls to ensure awareness and response to changing conditions.

 

There is now a web-based training course to help companies learn more about FAST. User guides are also on the web and they are regularly updated. In August, a maintenance release will provide a number of new or enhanced capabilities, and in early 2007 the remaining DDUs will be included in the FAST system. There will be a test in September to test the activation and communications process for that change. By then information will be disseminated about the time line for the national activation, and the BMEUs will have handouts about registering on PostalOne! and about how to get FAST training.

 

Ms. Pursley announced a work group meeting on August 15 in Chicago. The meeting will focus on the clarity and simplicity of the mailer rating process and a pilot program to test mailer ratings will be planned. Data quality issues will also be addressed.

 

Efficient Dissemination of Addressing-Related Information

in Emergencies/Disasters (New WG # 105)

Jeff Stangle & Steve Lopez/Ed Wanta & Darron Holland

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Mr. Stangle explained that the work group would focus on how address-related information would be communicated during an emergency or disaster, like the Katrina hurricane. This new work group had its first meeting on August 2 and industry members present discussed their experiences during the Katrina emergency, expectations versus what actually happened, and the work group tried to identify possible interim actions for the upcoming hurricane season. Some of the ideas included getting concise information out in as timely a way as possible, developing alternative information venues, and addressing specific issues such as what to do about mail already prepared when the emergency hits and how to communicate with the end users (the mail recipients).

 

Mr. Wanta commented that the work group was concerned about issues that related to the Katrina experience, including internal Postal Service communications related to address information (e.g., field to HQ, etc.), better ways to communicate, defining appropriate information to release, and standards for the release of information.

 

The work group defined important areas of challenge availability of information during an occurring natural disaster when facilities may be damaged and personnel may be displaced; how to deal with the current hurricane season that may introduce emergency situations before the work group can complete its report; and the challenge of communicating with state, local and federal agencies.

 

Individuals interested in participating in this work group should contact the co-chairs.

 

List Certification (WG # 104)

Chris Lien/Charles Hunt & Jim Wilson

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Mr. Lien explained that list certification concerns supporting deliverable as addressed mail. The work group felt it was more appropriate to think in terms of a list of certified addresses rather than a certified list of addresses. The certified address should contain an indicator that shows that certain verification procedures were applied to create the certification.

 

The 22-member work group identified a number of key stakeholders end user mailers, service bureaus, list providers, software vendors and various groups within the Postal Service. The next meeting by telecom will be on August 22.

 

Mr. Lien suggested that certification is more than just the tools used in the process (CASS, ACS, AEC II) and the list certification system must include a description of the process (when and how to use the tools). There should be a feedback loop to keep the addresses up to date, especially the more unusual addresses. Finally, it is important that certified addresses be placed on mail pieces properly.

 

Address Location for Flats Sequencing System -FSS -(WG # 101)

James West/Marc McCrery

 

Mr. West commented that the work groups goal is to evaluate the operational and financial consequences of address label placement on flats in the FSS environment. The report will present various options, but make no specific recommendations. The work group has met to discuss the issues, has conducted a survey, and evaluated the survey responses. It feels there is enough information to prepare the final report, which should be ready for review within six weeks.

 

Mr. West commented that there were some common concerns that the work group considered clear space around the address, font sizes, and the quid pro quo if mailers agree to accommodate the Postal Services requirements. The mail class most affected by the requirements will probably be periodicals, since their address placement is the most varied among flats.

 

The report should be ready for MTAC review by the next meeting.

 

Adjournment

Don Harle

 

Mr. Harle adjourned the meeting at 11:30 a.m.