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1 2016 National Postal Forum: Shipping Products with USPS Visibility Karen Key, Director Shipping Products and Services Juliaann Hess, Manager Mail and Package Information Systems March 20, 2016 Agenda Shipping Products Visibility for Shipping Products Questions 2 1

2 Shipping Services Overview USPS offers a variety of flexible Negotiated Service Agreement (NSA) shipping services options for businesses that need to get products to their customers quickly. Same Day Next Day Uses USPS last mile network to deliver products to customers in the designated service area on the same day which they are received. Shipments are delivered on same day if shipment arrives within designated acceptance hours. Shipments are transported via USPS to the Destination Delivery Units (DDUs) for next postal business day delivery, and will be delivered on the next day. The shipment must be sorted by 3-digit ZIP, machinable parcels, and be made up of parcels that weigh less than 25 lbs. Extended Coverage An extension of USPS ground shipping options that leverages USPS last mile delivery network. Approved USPS consolidators drop packages for delivery at key USPS facilities, including destination delivery units (DDUs). Pricing is based on weight and entry location. Priority Mail Metro Post Priority Mail Metro Post is a same-day package delivery service available to approved merchants or retailers that offer their products online and through retail locations. 3 Same Day Delivery Product Description Same Day service is a service offered for approved Negotiated Service Agreement (NSA) shippers only. Value Added Service that uses USPS last mile network to deliver products to customers in the designated service area on the same day which the shipment is received. 5 Digit ZIP Code Shipments delivered on same day if shipment arrives within the designated Same Day acceptance hours. Features & Benefits Intelligent Mail Package Barcode Electronic Verification System (evs) Schedule Facility Access and Shipment Tracking (FAST) appointments for same day delivery at destination delivery units (DDU). Same Day hours are in the Times Hours Module in Facilities Database (FDB). Shipper transports shipments directly to the designated DDU for same day service. Current Offering Eligible Mail Class Additional Combined Services Same Day Delivery Parcel Select Parcel Select Lightweight N/A Priority Mail First-Class Package Service First-Class Package Service up to 5 lbs 4 2

3 Same Day Delivery Competitor Products Competitors offer a variety of similar products. Competitor Service & Fee + Postage (2016) 1 UPS Express Critical- Customizable, same-day service. Base price for one package is $189 on website plus other delivery fees. Pricing on request 1. 2 Fedex Same Day: Custom service, quick quotes available on website, price depends on distance and shipping service required Courier Services: Major Retailers: The market for courier services is extremely fragmented by geography and locality. Due to that fragmentation, no major players exist, and generally rates depend on the contractual agreement for the services provided 2. Several major retailers have begun to test the waters with their own courier services in major markets 2. Some of these services are internal, and others leverage third party courier services. Sources: UPS Rate and Service Guide and FedEx 2016 Service Guide and company websites 2 February 2016 IBIS World Report: Couriers Local Delivery Services in the US Industry Report 5 Next Day Product Description Product for approved Negotiated Service Agreement (NSA) shippers only. FAST appointments for Next Day at destination Sectional Center Facility (DSCF). Shipper must arrive with shipments before designated acceptance time. Shipments transported via USPS to the DDUs for next postal business day delivery. Shipment must be sorted by 3-Digit ZIP, machinable parcels, and be made up of parcels that weigh less than 25 lbs. Features & Benefits Intelligent Mail Package Barcode Electronic Verification System (evs) Faster delivery to customers Easy solution for shippers Better customer Service Current Offering Eligible Mail Class Additional Combined Services Next Day Parcel Select Parcel Select Lightweight N/A Priority Mail First-Class Package Service First-Class Package Service up to 5 lbs 6 3

4 Next Day Delivery Competitor Products Competitors already offer similar services. Competitor Service & Fee + Postage (2016) Next Day Air Early AM Delivery next day by 8 AM. 1 Next Day Air Delivery guaranteed next day by 10:30 AM. Next Day Air Saver next day by 3:00 PM. First Overnight Delivered the next day by 8AM. 2 Priority Overnight Delivered next day by 10:30 AM. Standard Overnight Delivered the next day by 3:00 PM. Sources: 2016 UPS Rate and Service Guide and FedEx 2016 Service Guide 7 Next Day 5 Digit ZIP Code Next Day Flow Diagram 5 Digit ZIP Code Deliver Shipment to DSCF 5 Digit ZIP Code Secondary Logistics Provider prepares shipments by 5 Digit ZIP Code 5 Digit ZIP Code 5 Digit ZIP Code 8 4

5 Features & Benefits Extended Coverage Product Description Extended Coverage Service is an extension of USPS ground shipping options that leverages USPS last mile delivery network. Approved USPS consolidators (NSA shippers) ship packages using their own transportation network, and drop/tender packages for delivery at participating USPS facilities, including destination delivery units (DDUs). Pricing is based on weight and entry location. Intelligent Mail Package Barcode. Electronic Verification System (evs). Extended coverage delivery service for Parcel Select package shippers, including Parcel Select Lightweight shippers with an approved Negotiated Service Agreement (NSA). Shippers will use the Facility Access and Shipment Tracking (FAST) program to schedule an appointment at a parent DDU. Must drop packages at the parent DDU during the identified time threshold for next-day delivery. Current Offering Eligible Mail Class Additional Combined Services Extended Coverage Parcel Select Parcel Select Lightweight Priority Mail First-Class Package Service First-Class Package Service up to 5lbs N/A 9 Extended Coverage Flow Diagram Extended Coverage 3 Digit ZIP Code 3 Digit ZIP Code Deliver Shipment to DDU 3 Digit ZIP Code Secondary Logistics Provider prepares shipments by 5-Digit ZIP Code. 3 Digit ZIP Code 3 Digit ZIP Code 10 5

6 Features & Benefits Priority Mail Metro Post Product Description Priority Mail Metro Post is a same-day package delivery service available for approved merchants or retailers that offer their products online and through retail locations. Orders are received at the centralized delivery hub and delivered either on the same day or next day. Carriers depart from the delivery hub to deliver the Priority Mail Metro Post packages between 3 and 8 PM. Intelligent Mail Package Barcode. Electronic Verification System (evs). Quick Delivery to customers. Works well with pick and pack operations. Ideal for large shippers in metropolitan areas. Approved NSA. 11 Metro Post Competitor Products Competitors offer some form customized same day city courier service. Competitor Service & Fee + Postage (2016) 1 Part of UPS Express Critical Service: Premium pricing, available on request Courier Services: Same Day City: Available in most major cities within the United States. Prices available on request, vary by service type and location 1. The market for courier services is extremely fragmented by geography and locality. Due to that fragmentation, no major players exist, and generally rates depend on the contractual agreement for the services provided 2. Sources: UPS Rate and Service Guide and FedEx 2016 Service Guide and company websites 2 February 2016 IBIS World Report: Couriers Local Delivery Services in the US Industry Report 12 6

7 Agenda Visibility for Shipping Products Intelligent Mail Package Barcode USPS Tracking Visibility Enhancements Coming Attractions Questions 13 INTELLIGENT MAIL PACKAGE BARCODE What is it? The Intelligent Mail Package Barcode (IM pb) is the critical bridge between physical packages and digital information required to enable world class service and tracking for our package products. 14 7

8 World Class Visibility and Service 100% Visibility Customer Value Business Value A unique tracking barcode on every package Full end-to-end tracking Tracking included for all shipping products* Rich digital information improves CX and performance Creates value! Essential to compete Offers transparency and predictability Foundation for shipping industry Track all volume More data to support customer service Information about reliability Manage networks and logistics Correct problems Identify pinch points Innovation opportunities USPS Tracking is included at no additional charge for all packages except Standard Mail parcels. 15 Delivery Sortation System New Parcel Sorters 2017 Prototype to Debut Future Vehicles PASS USPS Technology Investments Ring Scanners IMDAS Real-Time Scanners Mobile Delivery Device (Replaced Real- Time Scanners) Product Tracking & Reporting (PTR) System 16 8

9 MGM2 IMpb Benefits and Features Access to the best prices for package products End-to-End tracking information at no additional charge* Proactively manage expectations you and your customers know when to expect your packages to arrive Access to Priority Mail baked-in insurance up to: $50 for Retail and Commercial Base Pricing $100 for Commercial Plus customers Note: Some restrictions apply Address information in shipping files supports efficient sorting to carrier delivery routes, using data instead human memory Three digit service type codes identify product and service Required for new products, services, features *USPS Tracking is included at no additional charge for all packages except Standard Mail parcels. 17 Final Rule IMpb required for Presort and entry discounts SEP 2011 Advanced Notice New IMpb Standards to Enhance Visibility FEB 2013 IMpb Timeline Final Rule IMpb on all parcels, Compliance Thresholds, Non-Compliance Fee, address and/or 11-Digit DPV ZIP Code, IMpb required for CPP and CBP prices, Barcode all metered parcels DEC 2013 IMpb Final Compliance Threshold Levels Non-Compliance Fees, Address and/or 11- Digit DPV ZIP Code Required in files JAN 2015 Target Date Non-Compliance Assessments for 3 new IMpb Quality Metrics SEP 2010 Advance Notice JUL 2016 APR 2011 JAN 2012 APR 2013 JAN 2014 JAN 2016 Proposed Rule IMpb required for Presort and entry discounts IMpb 1.0 Final Rule Implemented Proposed Rule IMpb for All Products Compliance Thresholds and Non- Compliance Fee Address and/or 11-Digit DPV ZIP Code Required in filesbarcode all metered parcels Final Rule Implemented $0.20 Non-Compliance Fee Competitive Products only Introduced 3 IMpb Quality Metrics: Barcode Quality Shipping Services File Quality Address Quality 18 9

10 Slide 17 MGM2 Keep and improve Michael Miguelez, 3/7/2016

11 IMpb Compliance Current Metrics February % 97% 98% Threshold Threshold Threshold 98.98% 92.79% 96.74% 86.36% Timeliness Source: Product Tracking & Reporting Packages With IMpb* Shipping Services File v1.6 or higher Address and/or 11-Digit DPV ZIP Code *Commercial parcels only Note: Timeliness not factored into performance 19 IMPB COMPLIANCE QUALITY METRICS OVERVIEW Address Quality Shipping Services File Quality Barcode Quality % FEB 2016 ACTUAL TARGET: 89% % FEB 2016 ACTUAL TARGET: 91% % FEB 2016 ACTUAL TARGET: 95% Measures percent of addresses* with enough information to validate to the unique exact 11-digit DPV ZIP Code when matched against the AMS Database. Benefits: Operational efficiency Enables personalized features such as My USPS Avoids operational costs (Manual scheme lookup/pres Keying) Improves deliverability Measures percent of manifest records that pass key package level detail validations mitigating potential errors when processed in the PTR Database. Benefits: Supports timely postage payment and revenue assurance Enhances tracking and customer experience Provides digital awareness of packages that will be delivered by USPS Facilitates better workload planning Eliminates need for manual counts Enables better analytics, insights, decisions Measures percent of tracking numbers that pass key validations for format and uniqueness* without errors or warnings when manifests are processed in the PTR Database and physically scanned. Benefits: Critical for visibility and the customer experience Creates the digital trail Supports payment and revenue assurance Facilitates operational efficiencies Foundational for current and future product offerings

12 IMpb Compliance Quality Metrics 95% 96% 93% % 89% 91% Collaborate with Industry 21 MGM23 IMpb QUALITY NON-COMPLIANCE ASSESSMENT Collaborative Implementation Approach Work with Industry via MTAC Work Group to simplify IMpb Compliance for Manifest, Barcode, and Address Quality assessments Collaborate on which items to measure and thresholds Highest volume and impacts Straightforward Low contention Ensure no duplicate assessments Agree on compliance threshold for each IMpb Quality Metric for out years Reasonable and achievable IMpb Compliance Quality assessments begin July

13 Slide 22 MGM23 Keep Michael Miguelez, 3/7/2016

14 Secure File Transmission Protocols Secure Postal and Customer Networks Eliminate less secured FTP connectivity and vulnerabilities for file transmissions Addresses audit findings Protects customers, brand and data integrity Inactivate Internet FTP Accounts with no login activity since last 14 months to be inactivated by March 15, ,100 accounts Active Internet FTP Accounts expected to convert to secure connection by January 31,2017 4, 800 accounts New accounts onboarded with secured options only Currently reaching out to customers and vendors (Ongoing) Proposed Cut-off Date is August 31, Shipping Partner Event File V5.0 Hybrid file Shipping Partner File with additional fields New fields Full Return and Pick Up address Container Barcode number to nest packages to container Weight Dimensions Zone Packaging Product Code Customer Type Transaction Type Indicium Creation Record Date Meter Vendor Id Meter Model Number Rate Category Information-Based Indicia - IBI Used with any Shipping Partner inbound event New Shipping Partner Event for Inbound International packages Pre-Shipment Notification, Order Received by Merchant Event Code 89 Compatible with previous file versions Launched January 31,

15 USPS Text Tracking Over 5 million messages sent per month A million plus unique mobile numbers Two ways to track on the go! Text your tracking number to (2USPS) Sign up online on USPS Tracking website USPS Text Tracking Enhancements USPS Text Tracking Keywords Text tracking alerts with keywords ALL Subscribes user to text alerts for all future activity on active or future text tracking requests Text tracking number with keyword to (2USPS) Some keywords can be used without a tracking number Keyword Quiet turns off alerts overnight. DND Subscribes user to delivery and attempted delivery text alerts only Confirmation text messages confirm user requests 26 13

16 My USPS 27 Visibility for Pharmaceuticals and Medical Supplies Introduced two new Extra Services Codes to identify Pharmaceutical and Medical Supplies Electronically identified in Shipping Services File instead of in barcode Tracking Proof of Delivery included Negotiated Service Agreements (NSAs) only Priority Mail Express Priority Mail Domestic Parcel Select First-Class Package Service Parcel Select Lightweight Product availability Priority Mail Express International Configurable internal alerts Longer retention period (5 years) Not visible on the package or in the barcode International First-Class Package International Service Priority Mail International 28 14

17 Domestic Return Receipt (PS Form 3811) Can be electronically linked to qualified Extra Service tracking numbers (i.e., Certified Mail) Increases visibility by placing an Intelligent Mail package barcode on Front and Back sides of the hard copy form Front of Form Scanned when delivered to the Sender Scanned during acceptance to electronically link to the host Extra Service Back of Form and New Barcode Location 29 New Visibility Events No Access (Event Code 30) USPS Tracking web site SMS Response 30 15

18 New Visibility Events Held at Post Office, At Customer Request (Event Code 58) USPS Tracking web site SMS Response New Visibility Events Held at Post Office, Retrieved from Full Parcel Locker (Event Code 58) USPS Tracking web site SMS Response 32 16

19 New Visibility Events Delivery Delay (Event Code 71) USPS Tracking web site Notification 33 New Visibility Events Delivery Exceptions Animal Interference (Event Code 72) USPS Tracking web site SMS Response 34 17

20 New Visibility Events Delivery Exceptions Local Weather Delay (Event Code 57) SMS Response USPS Tracking web site 35 New Visibility Events Delivery Exceptions Weather Delay (Event Code WX) USPS Tracking web site 36 18

21 New Visibility Events Delivery Exceptions Transportation Delay (Event Code TX) USPS Tracking web site 37 New Visibility Events Delivery Exceptions Other Delay (Event Code OX) USPS Tracking web site 38 19

22 New Description for Parcel Return Service Events Tendered to Returns Agent USPS Tracking web site Customer Initiated Events New Events for Customer Contacts Creates and links events for actions initiated by customer or USPS Redelivery requests Customer Care complaints Delivery Instructions Package pickup scheduling Second and return notices Most events provided to mailer extracts, some revealed on USPS.com 40 20

23 Schedule Redelivery on USPS Tracking Website USPS Tracking web site 41 Schedule Redelivery on USPS Tracking Website USPS Tracking web site Name and address prepopulated for logged in users 123 Main Street

24 Customer Initiated Events Redelivery Scheduled (VR) Event USPS Tracking Internet View 43 Customer Initiated Events Out for Delivery + Redelivery Scheduled = Out for Redelivery verbiage + Updated Delivery Day Reveal 44 22

25 PS Form 3849 Redelivery Notice PAGE 1 Option A PAGE 1 Option B PAGE 2 45 Coming Attractions Schedule Redelivery via Mobile 46 23

26 Coming Attractions Schedule Redelivery via Mobile 47 Coming Attractions Launch Redelivery Mobile App via QR Code on Redelivery Notice 48 24

27 Colleges & Universities Program Leverage Firmsheet Program Delivery Partner Events Program USPS captures and sends firmsheet extract file to College/University Mail Center. Firmsheet files contain electronic listing of incoming packages to College/University Mail Center for the delivery to students and faculty. Used for reconciliations (e.g., compare to daily or weekly package receipts). + College/University Mail Center transmits partner tracking events using Deliver Partner Event file to USPS (via inhouse or vendor software, USPS Partner app, or manual upload). Delivery Partner Event file lists all delivery histories that are captured by College/University Mail Center. Visibility via USPS.com USPS Tracking or other software (e.g.: Track oncampus package movements and final delivery to recipient). = Colleges & Universities Program 49 Pilot Sites There are currently 16 live sites, and an additional 2 onboarding Next Steps USPS plans to Distribute SOP for C/U Program to all Post Offices & Plants by April SIX NEW Institutions went LIVE on/before FEB 19, THREE Software Vendors are currently in LIVE. SCLogic (5): Charleston, MIT, UNC, UNLV, Vanderbilt Brynka (3): Bucknell, CUW, Harding Winn (1): Harvard FOUR Vendors to Go LIVE by 4Q 2016: PB SendSuite, SQBX, BearTracks, QTrak NACUMS & USPS to Reach out to and Onboard New Institutions. Ongoing USPS Partner Mobile App (v2.05 for ios/android): Cedarville, Charleston, Liberty, UNC, Utah State 50 25

28 MGM10 Sample USPS Tracking Events From Pilot University USPS Partner Mobile App Scan using Camera Manage: Packages Firmsheets Queues 52 26

29 Slide 51 MGM10 Juliaann to update the image in the updated slide. Michael Miguelez, 3/7/2016

30 Questions? 53 27

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