Are You Ready for This? 2013 Industry Changes and Beyond!

ARE YOU READY FOR THIS? 2013 INDUSTRY CHANGES & BEYOND!

Alison Hall,

Director of Client Services –

Direct Mail Solutions

Steve Krejcik,

Director of Strategic Technical Business Development

June 18, 2013

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Alison HallAlison Hall, Director Client Services,Direct Mail SolutionsPitney Bowes Presort Services

Today’s Presenters

Steve KrejcikDirector of Strategic Technical Business DevelopmentPitney Bowes Presort Services

3June 18, 2013

Agenda

AGENDA

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USPS Network Consolidation and Service Changes

Mailpiece Design and Address Quality

USPS Promotions – connect the physical mail with digital world and save!

2013 & Beyond –Full Service IMb®,E-induction, & Seamless Acceptance

What? USPS is reducing cost structure by consolidating USPS processing

facilities

Why? 15.9 billion losses last year USPS

How? From 461 facilities in 2012 to 232 targeted in 2015 46 USPS processing centers consolidated in 2012 100 USPS processing centers targeted in 2013 March 28, 2013, USPS added an additional 53 USPS processing centers

to be accelerated and consolidated in 2013 from 2014 consolidation listing

USPS® Network Consolidation and Service Changes

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Phase I Winter 2013 Consolidations

About Tableau maps: www.tableausoftware.com/mapdata

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Click on the link for

Latest Mail Move Plan

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Mail Move Plan as of March 8, 2013

Consolidation sites scheduled for 2013

Site address, locale key, and the name of the activation (gaining) facility 

Workload migration “target” dates

Mail shape effected (e.g. letters, flats, parcels/bundles)

Process step/entry level ( e.g. originating, destinating, and DPS)

Mail Move Plan File Includes:

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Service Standards

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Service Standards

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Service Standards

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Mailpiece Design & Address Quality

Making your mailings and data work harder and better!

Folded Self-Mailers

Design Elements

Top Addressing Issues

Address Quality Foundation

Effective January 5, 2013

Definition: A folded self-mailer is formed of two or more panels created when a single or multiple unbound sheets of paper are folded together and sealed to form a letter size mailpiece

Complete details are listed at www.pe.usps.gov in DMM section 201.3.14 and 201.3.15

Folded Self Mailers

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Dimension Height – 3.5” to 6” max (new) Length – 5” to 10.5” max (new)

Weight – up to 3oz (new)

Paper cover basis weight - Book grade (Text, Offset) Basic Folded Self-Mailer design 70lb (new) min for 1oz mailpiece; 80lb (new) over 1oz up to 3oz

Newsprint paper allowed on quarter-fold design only 55lb minimum paper, 1.5 inch tabs required (new)

Closure Methods Glue - minimum 3 spots required (new); 4 spots if over 1 oz (new) Tabs – minimum 2 1” tabs required (new); 3 tabs when over 1 oz and/or optional elements

incorporated

Critical Design Element Changes

Changes to Dimensions,

Weights, Paper

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Folding Panels defined Minimum number of panels when folded is two For bi-fold, fold no longer allowed at top (new)

Flaps Horizontal fold (new)

Must be at least 1.5” long Must end 1” or more from bottom edge

Vertical fold (new) Must be folded from lead edge At least 5” at longest point No closer than 1” to the trail edge

Basic Design Elements

Changes to Closure Methods, Folding,

and Flats

Additional Elements (new) Interior Attachments Loose Enclosures Die Cuts

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Resourceswww.ribbs.usps.gov

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The quality of your address data directly affects the deliverability of your mail!

USPS® provides an extensive suite of Address Quality products and services; check out ribbs.usps.gov

USPS is committed to continuous address hygiene improvements to enhance the value of mail

Small efforts canbring big results!

Address Quality

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USPS® has determined that up to 23% of all mail contains addressing errors

Common errors:

Addressee moved …...…………………………………….. 2.4%

Directional/Suffix missing ..……………………….............. 6.0%

Street name/Number incorrect/invalid ..………................ 5.9%

ZIP Code™/City incorrect ……………………………….4.8%

Apt number/Rural Box number missing …...…………….. 4.5%

Total 23.6%

Address Quality

USPS—AEC and AEC II® User Guide, p. 3

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Inconsistent filling of fields

Missing gender indicator

Trailing space after name or address

Misspelled words/Improper abbreviations

Missing or wrong street, directional, prefix, suffix

City, state, or ZIP Code™ missing or in conflict

Missing or incorrect secondary address information

Incorrect company legal name or reference name

Dual names

Extraneous information in name field

Top Addressing Issues

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4% UAA Volume 2011/2012

Cost over$1.3 Billion

Undeliverable as Addressed (UAA) Mail

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Address QualityFoundation

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StandardizeStandardize CASS Certified SoftwareCASS Certified SoftwareTMTM

ValidateValidate

LACSLink®LACSLink®

DPV®DPV®

SuiteLink®SuiteLink®

UpdateUpdateNCOALink®NCOALink®

ANKLink®ANKLink®

ACSACSTMTM

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USPS Promotions –

Connect Physical Mail w/ the Digital World & Save!

Objective: Increase the long-term value of mail

Highlight new technology and best practices

Encourage and accelerate industry innovation

Increase relevancy and engagement with consumers

New in July – May participate in multiple promotions on the same piece

Insight: Mail is Still Highly Valued

80% look at their mail daily – as a valuable news resource

75% like to see what’s in the mail

63% of mail is kept at least 2 days

Source: USPS 2011-2012 Mail Moment Survey

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2013 Promotions Summary

Name Registration Promotion Discount Description

Product Samples

5/1 – 9/30 8/1-9/30 5% upfront discount

For marketing parcels that contain samples

Picture Permit* 6/1 – 9/30 8/1-9/30 Up to 2 cents per piece

Custom permit indicia

Emerging Technologies*

6/15 – 9/30 8/1-9/30 2% upfront discount

Augmented Reality, Near Field Communications

Mobile Buy-It-Now

9/15 – 12/31 11/1-12/31 2% upfront discount

Integrated mobile shopping technology

* Requires special approval prior to mailing

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2014 Promotions Ideas

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Email [email protected]

Emerging Technology Mobil But-It-Now Product Samples

[email protected] Picture Permit

Documentation https://ribbs.usps.gov/index.cfm?page=mobilebarcode https://www.usps.com/business/promotions-and-incentives.htm

USPS Promotion Resources

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2013 and Beyond

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Full Service IMb

e-Induction

Seamless Acceptance

USPS has announced that Full Service IMb will be required to receive automation discounts after January 26, 2014

How will USPS measure quality and what are the consequences?

Validations - Today and in 2014New Validations - January 26, 2014Postage Adjustments - July 27, 2014

Full Service IMb

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Full Service Verifications – Today and in 2014

Automation Verification – Existing Verifications Mailpiece preparation including dimensions, shape, weight, and flexibility Barcode quality Content Presort makeup Automation eligibility

Existing Thresholds Apply

Mailing Falls Below Thresholds Returned for Rework Additional Postage at the applicable rates in January Examples:

Poor Barcode quality = % of pieces at Non-Automation Rates

Poor Presort quality = % of pieces at FCM Single Piece Rates

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Full-Service Acceptance - Existing Verifications Documentation not submitted electronically

Container placards are inside or covered by shrink-wrap

No Intelligent Mail container barcodes on the container placards Initial Sample = 1 Container If in error, select additional 3 containers More than 2 total errors = Failure

No Intelligent Mail tray barcodes on the tray/sack labels Initial Sample = 3 Handling Units If one or more in error, select additional 3 Handling Units More than 3 total errors = Failure

No Intelligent Mail tray barcode on the mailpieces Initial Sample = 30 Mailpieces 4 or more in error = Failure

Mailing Falls Below Thresholds Returned for Re-work Additional postage at the non-automated rates in January

Full Service Verifications – Today & in 2014

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Full-Service Electronic Verification - New Verifications Validation of the Information contained in eDoc Data is aggregated over a one-month period Displayed in the Mailer Scorecard by CRID Develop reasonable thresholds In the October release, PostalOne! will display the projected invoice from

full-service electronic verification failures Removal of full-service and automation rate Only mailpieces with verification errors above the preliminary threshold

Within 48 hours after the eDoc is processed the following occurs: Full-Service eDoc verification

Check every container, handling unit and piece in electronic documentation and evaluate for specific errors

Trend results are monitored for at least one month

Full Service New Validations January 26, 2014

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Full Service New Validations - January 26, 2014 All validations are performed by checking against values provided in the eDoc

Validation What is it?

Mailer IDMailer ID provided in the IMb, IMtb, or IMcb is valid and registered with the USPS Mailer ID system

Service Type IDService Type ID provided in the IMb is valid, appropriate for the class of mail, and appropriate for the service level of the mailpiece

By/For Mail Owner and Mail Preparer are provided for each mailpiece

Unique ContainerBarcode

IMcb is unique across all mailings from all eDoc submitters for the past 45 days

Unique TrayBarcode

IMtb is unique across all mailings from all eDoc submitters for the past 45 days

Unique Piece IMb is unique across all mailings from all eDoc submitters for the past 45 days

Co-Palletization Co-palletization files are submitted within 14 days for trays/virtual sacks marked for co-palletization at origin

Entry Facility Entry facility provided in eDoc (Locale key or ZIP Code) is a valid USPS facility

Scheduled ShipDate

For USPS Transported containers that do not receive scan at arrival to USPS facility, scheduled ship date/time is within 48 hours of finalization date/time.

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The Mailer Scorecard provides a dashboard view summarizing performance

Allows comparison across facilities

Conditional formatting provides a trending view across months

Drill reports provide a way to determine specific mail preparation errors

Available for any company that submits electronic documentation

Data grouped by eDoc submitter CRID

The Mailer Scorecard

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Go to Business Customer Gateway: https://gateway.usps.com

From menu on left, click on “Mailing Services” Click on “Mailing Reports (PostalOne!)” Click on “Mail Quality Reports” Click on “Shared Reports” Click on “Mailer Scorecard” Click on “Mailer Scorecard” again Select a month to review Click “Run Document”

How to Access The Mailer Scorecard

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Mailer Scorecard User’s Guide https://ribbs.usps.gov

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Full Service Mailer Scorecard (Available today)

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USPS will establish and publish thresholds during the first six months of 2014 based on a statistical analysis of actual mailer quality.

Example thresholds can be found in the scorecard

Full Service Thresholds

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eDoc evaluation based on monthly average Not individual mailings

Postage adjustments occur if a particular error is over the threshold

Number of pieces in error times the difference between postage affixed and the presort rate

Example: 10,000 piece mailing with 11% error while threshold is 10% and postage claimed is $.36.

1,100 pieces in error X (.433-.36) = $80.30 Additional postage due

Full Service Postage Adjustments - July 27, 2014

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All postage assessments will be performed at the eDoc Submitter CRID level

Mailers will have 10 days to review the invoice and all mail preparation errors:

During this period of time, mailers can elect to dispute errors If contested, invoice will be placed in a dispute queue report made available

externally

Full Service Postage Adjustments - July 27, 2014 Invoice Generation Timeline

End of Invoicing Period

(Month End)Invoice

Generation

10 Days

Pay/Dispute Invoice

VAEVerification

Assessment Evaluator

10 Days

Update/Reject/Close DisputeBMS Reviewer

5 Days

Pay InvoiceVAE

3 Days

If unpaid, invoice will be marked as overdue

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In-House solution Control over the mail Added costs for capital and IT Complicated requirements USPS Risk

Full Service Implementation Options

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Presort Bureau No capital investment Improved postage rates due to increased qualifications Reduce operational labor Move Update compliant Current with USPS® rules & regulations Presort Bureau will interface with USPS

Automated mailing requirementsFull Service requirementsMail acceptance

Visibility with Intelligent Mail® You can start today

Full Service Implementation Options

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Intelligent Mail Services Email: [email protected]

Web: https://ribbs.usps.gov

Phone: 800-522-9085

Full Service & Intelligent Mail Resources

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eInduction

eInduction will streamline the induction of drop shipments and expedited plant load mailings

This optional program goes live later this year

Eliminates need for 8017 and 8125

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The eInduction Process

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Seamless Acceptance

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Seamless Acceptance - How it Will Work

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Seamless Acceptance

Verifications results on the Seamless Acceptance Scorecard & Dashboard/Reports Users will be able to access detailed information about mail quality

Verifications are performed on data from mail operations by comparing MPE scan data to the information submitted in eDoc for the following categories:

Barcode Scan Rate Undocumented Mail Presort

Entry Location Move Update Duplicates

Postage Affixed Presort Duplicates

Postage Payment Method

Content Piece Weight

Barcode Construct Undocumented Mail

Verifications are performed by comparing data collected through FS-IMD sampling to the information submitted in eDoc for the following categories:

Sampling Verifications

MPE Scan Verifications

Reporting

June 18, 2013

Alison HallAlison Hall, Director Client Services,Direct Mail SolutionsPitney Bowes Presort [email protected]

Questions?

Steve KrejcikDirector of Strategic Technical Business DevelopmentPitney Bowes Presort [email protected]

50June 18, 2013

www.pb.com/mailservices

THANK YOU.