USPS Rate, Product and other Changes Proposed for January 22, Presented by Dr. Janet Lockhart-Jones Pitney Bowes, Inc.

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1 USPS Rate, Product and other Changes Proposed for January 22, 2017 Presented by Dr. Janet Lockhart-Jones Pitney Bowes, Inc.

2 Presenting. Dr. Janet Lockhart-Jones joined Pitney Bowes in September 2012 to fulfill the cross-enterprise role of Curriculum Manager, Postal Education. In this capacity, Janet serves as a postal education and subject matter expert to Pitney Bowes employees and its clients. Janet s professional career includes 21 years of employment with the United States Postal Service, fulfilling various roles in Information Technology, Accounting, Software Systems and Quality Improvement. After leaving the Postal Service, Janet became an entrepreneur and launched her own project management consulting and leadership training firm which she ran successfully for 12 years. Janet holds the degrees of Doctor of Education in Organization and Leadership, a Master of Science in Human Resources Management, and a Bachelor of Science Degree in Business Administration. She is the Postal Education Chair of the Sacramento Postal Customer Council, a Certified Mailpiece Design Consultant and a USPS Certified Executive Mail Center Manager. Dr. Lockhart-Jones is a San Francisco native who has traveled and worked all over the world. She currently resides with her family in Northern California. 2

3 Note All changes discussed in this presentation are PROPOSED until official notification is given by the Postal Regulatory Commission that they are approved in whole, in part, or not at all!

4 Overview - What is changing Proposed Rates Mailing and Shipping Services Tips and strategies to keep costs down Questions?

5 Effective Date of Proposed Changes is:

6

7 Mailing Services Market Dominant Classes of Mail Affected Market January 2017 changes target the below products: Dominant First-Class Mail Single-Piece Letters & Cards Presort Letters & Cards Flats Parcels Outbound Single-Piece International Periodicals Special Services Standard Mail Letters Flats Parcels High Density/Saturation Letters Every Door Direct Mail Retail Parcels Package Services Bound Printed Matter (BPM) Flats BPM Parcels Media, Library Mail Alaska Bypass JANUARY 2015 PBI Internal use only 7

8 First-Class Mail ~0.8% overall increase First-Class stamp price moves to 49 cents Product CPI Percent Change Single-piece Letters & Cards 2.0% Single-piece Metered -1.1% Flats 1.9% Parcels 0.6% Presort Letters & Cards -0.3% First-Class Mail International* (includes letters, cards, and flats) 0.0% * Does not include International Inbound 8 JANUARY 2015 PBI Internal use only 8

9 Key First-Class Mail Single-Piece (Retail) Prices Current Price New Price Percent Change Stamp Price 1 Oz. $0.47 $ % Single Piece Additional Ounce % Meter Price 1 Oz % Single-Piece Flats 1 Oz % Single-Piece Cards % Retail Parcels 0-4 ozs % 9 JANUARY 2015 PBI Internal use only 9

10 First-Class Letter Meter Rate Meter Rate savings moves to three cents!!! Save 3 cents on First-Class letters that have postage affixed using: Postage Meter PC Postage Permit Imprint Pre-canceled stamps Still: Stamped: $0.49 cents No piece minimums No preparation requirement No requirement to report those pieces on a postage New: $0.46 cents JANUARY 2015 PBI Internal use only 10

11 Key First-Class Mail Single-Piece (Retail) Prices 11 JANUARY 2015 PBI Internal use only 11

12 First-Class Mail International No increase at this time Product CPI Percent Change Letters 0.0% Flats 0.0% Cards 0.0% * Note: First-Class Mail International Global Forever Stamp remain $ JANUARY 2015 PBI Internal use only 12

13 Commercial Mail

14 Market Dominant Classification Changes First-Class Eliminate 3-Digit Automation Letters for First-Class Presort Prices have been the same since 2012 Combines the 3 Digit and AADC into the AADC sortation 3 & 3.5 Ounces free for First-Class Commercial Letters One price for all commercial letters up to 3.5 ounces Provides the ability to add content to bills and statements 14 JANUARY 2015 PBI Internal use only 14

15 Add more content to bills and statements without adding postage!! Announce: New services Special pricing Upcoming promotions New products JANUARY 2015 PBI Internal use only 15

16 First-Class Commercial pricing Notes: 1. AADC to 5-digit spread is now 3 cents 2. 5-digit auto presort prices decrease 0.8% 3. AADC and MAADC increase by 1% 16 JANUARY 2015 PBI Internal use only 16

17 Market Dominant Classification Change Standard Mail name to change to USPS Marketing Mail Named to influence marketers who are not in the mail Identifies majority of the volume in the class 18 month transition The indicia on the mail pieces should continue to display current Standard Mail abbreviations until notified by the USPS No changes should be made to markings/indicia before July JANUARY 2015 PBI Internal use only 17

18 Market Dominant Classification Changes Marketing Mail Overall increase of ~0.9% Eliminate 3-Digit Automation Letters presort level for Standard Mail Presort Prices have been the same since 2012 Combines the 3 Digit and AADC into the AADC sortation Simplify Marketing Automation Letters by eliminating the per pound rate between 3.3 and 3.5 ounces Simplifies Marketing Mail Letters Increase Marketing Mail flats piece price weight break from 3.3 to 4.0 ozs. Allows mailers to add weight in order to add value to mail piece 18 JANUARY 2015 PBI Internal use only 18

19 USPS Marketing Mail JANUARY 2015 PBI Internal use only 19 19

20 USPS Marketing Mail Note: Per piece pricing kicks in when > 4 ounces JANUARY 2015 PBI Internal use only 20 20

21 Market Dominant Classification Changes Marketing Mail FSS Marketing Mail reverts to previous structure Reverts to structure in place prior to January 2014 Carrier Route Pieces pay Carrier Route prices etc. Prices not based on equipment used to sort label list determine bundle and pallet makeup Allows Operations flexibility to add or remove ZIPS without impacting prices Encourage more Carrier Route Bundles on 5-Digit Pallets in non-fss zones Incentives to prepare more direct pallets of CR volume Wider incentives to enter those pallets at DDU 21 JANUARY 2015 PBI Internal use only 21

22 Market Dominant Classification Changes Alternate Postage becomes Share Mail Name change Simplified pricing and requirements 22 JANUARY 2015 PBI Internal use only 22

23 Extra/Special Services JANUARY 2015 PBI Internal use only 23

24 Market Dominant Highlights Domestic Special Services Certified Mail Price increase - from $3.30 to $3.35 Same price, electronic or retail W/ one of three options: $8.35 ($0.10 increase) Certified Mail Restricted Delivery Certified Mail Adult Signature Required Certified Mail Adult Signature Required w/restricted Delivery Certificate of Mailing Options Current January 2017 Basic $1.30 $1.35 Firm Book Mailing Bulk: First 1,000 pcs Each Add l 1,000 pcs

25 Market Dominant Highlights Domestic Special Services USPS Tracking Tracking for USPS Market Mail parcels moves to $0.37 USPS Tracking First Class Mail (Parcels Only) Retail/Electronic 0.00 First Class Package Service Electronic 0.00 Priority Mail Retail/Electronic 0.00 Retail Ground Retail/Electronic 0.00 USPS Marketing Mail Electronic 0.37 Package Services Retail/Electronic 0.00 Parcel Select Electronic Electronic 0.00

26 Market Dominant Highlights Domestic Special Services Return Receipt Price increase of 2.9% Retail = $2.75 Electronic = $1.45 RR service is only available at time of mailing $2.75 $1.45

27 Market Dominant Highlights Domestic Special Services Collect on Delivery (COD) Renamed to Collect on Delivery Hold for Pickup Pickup at a Post Office Only Payment made at a Retail Counter

28 Market Dominant Highlights Domestic Special Services Pick up on Demand Increasing to $22.00 Package Intercept Fee Increasing to $12.95

29 What did change - Shipping Services

30 Shipping Services Domestic Domestic products Express Mail Priority Mail Parcel Select Parcel Return Service First-Class Package Service Retail Ground Competitive Extra Services 30

31 Shipping Services (Intl) International products Global Express Guaranteed (GXG ) Express Mail International Priority Mail International First-Class Package International Service International Priority Airmail (IPA ) International Surface Air Lift (ISAL ) Airmail M-Bags Competitive Extra Services

32 Shipping Services Priority Mail Express Overall 3.4% increase Existing Structure stays the same Commercial Base and Commercial Plus Pricing is equal Retail Flat Rate Envelopes, a significant portion of all Priority Mail Express Volume, is increasing to $

33 Shipping Services Priority Mail Express Commercial Base pricing will increase 2.4% on average and set at a flat 11.2% off Retail pricing. Commercial Plus Price matched to Commercial Base pricing in 2016 and will continue in 2017 Retail Flat Rate, Legal Flat Rate and Padded Flat Rate envelopes will all have differentiated pricing for

34 Shipping Services Priority Mail Express 34

35 Shipping Services Priority Mail Overall 3.9% average increase Existing Structure stays the same Retail pricing increasing on average 3.3% Commercial Plus Pricing will offer lower pricing to large-volume customers. Price increase will average 4.5% and will be set at 16.8% off retail. Commercial Base pricing will increase 4.1% on average, but will reflect an average 13.6% discount off Retail prices 35

36 Shipping Services Priority Mail - Retail 36

37 Shipping Services Priority Mail Commercial Base Pricing 37

38 Shipping Services Priority Mail Regional Rate Pricing A Hidden Gem 38

39 Shipping Services Priority Mail Regional Rate Boxes A Hidden Gem 39

40 Shipping Services Priority Mail Regional Rate Pricing A Hidden Gem Zone 8 Shipping, Los Angeles to New York 15 pounds Retail Zone rate Retail Flat Rate, Med Box Commercial Base Zone rate Commercial Base Flat Rate Med. Box Regional Rate, Box A $50.80 $13.60 $46.19 $12.40 $

41 Shipping Services First Class Package Service Overall 4.1% increase Positioned as a lightweight shipping option used by businesses for fulfillment purposes. Only Non-personal matter allowed; open to postal inspection Intelligent Mail Package Barcode Required 41

42 USPS news sources you can rely on Want More? Need More?

43 Thank you Dr. Janet Lockhart-Jones Pitney Bowes, Inc. 43

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