Mailing Services Price Change

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1 Mailing Services Price Change 1

2 Agenda CPI cap Changes by class of mail First-Class Mail Standard Mail Periodicals Package Services Extra Services Timeline Resources 2

3 The Price Cap Based on Consumer Price Index PRC formula a moving average of CPI data Current calculation of cap is 1.741% 3

4 First-Class Mail 1.7% overall increase 44-cent stamp (no change) All new commemoratives are Forever Stamps Nonmachinable surcharge (no change) Product Single-piece Letters & Cards Flats Parcels Presort Letters & Cards International (Outbound and Inbound) % Change

5 First-Class Mail Single-Piece Why no change to 44-cent stamp price? Low price cap constrains options Increases elsewhere for single-piece Additional ounce for letters increases by 3 cents to $0.20 Postcards increase by one cent to $0.29 Parcels Same price for 1 to 3 ounce pieces FCM International Letters and postcards to Canada and Mexico $0.80 Rest of the world $0.98 (no change) 5

6 First-Class Mail Presort Letters and Cards Most prices increase 0.5 cent to 0.8 cent 2.5-cent price difference between 5D and 3D No change for additional ounce Parcels Address cost issues for lightweight parcels Create Retail / Commercial pricing distinction New! Commercial Plus category for heavier parcels Weight limit increased from 13 to 16 ounces 6

7 Standard Mail 1.7% overall increase Letters Flats Product Carrier Route Letters, Flats, and Parcels High Density / Saturation Letters High Density / Saturation Flats and Parcels Parcels (NFM s / Parcels) % Change

8 Standard Mail Foster growth in advertising mail Working with Saturation and Catalog customers to encourage growth Below average price increase for Standard Flats Average price per piece: $0.21 New! Standard Mail innovation as of Jan. 2, 2011 Expansion of Simplified Addressing Postal Customer For saturation flats and irregular parcels Delivery to any address 8

9 Periodicals 1.7% overall increase Product Outside County Inside County % Change

10 Periodicals Low price cap constrains ability to cover costs Encourage efficiency Above average increase for Origin Pallets Maintain 9.8-cent differential between 5D CR Average price per piece: $

11 Package Services 1.7% overall increase Lower price increase for BPM Flats Only product covering costs Product Single-piece Parcel Post BPM Flats BPM Parcels Media Mail (including Library Mail) % Change

12 Extra Services 1.7% overall increase Product PO Boxes Certified Mail Return Receipt Money Orders Fees Other % Change

13 Timeline Notify PRC Jan 13 April 17, 2011 Preparation Regulatory Review Implementation Price development 45 days 49 days PRC Determination 34 days Feb 16 13

14 Resources Online List of proposed prices usps.com/prices Postal Explorer pe.usps.com Downloadable price files Federal Register notices Domestic Mail Manual & International Mail Manual DMM Advisory -based updates Subscribe via MailPro hardcopy magazine (also posted online) Subscribe via usps.com/mailpro 14

15 Intelligent Mail Update 15

16 Concerns We hear your concerns Significant upfront investment with long-term ROI Loss of Discount due to non-compliance Quality, performance, reliability of systems and processes Moving too fast 16

17 Next Steps Full Service discount continues beyond May 2011 POSTNET continues to qualify for automation discounts beyond May 2011 No Full Service ACS Charges Unique Mailpiece Barcode Unique Container Barcode Unique Tray Barcode 17

18 Next Steps Partner with you Address issues and implement reasonable timelines Promote ROI Enable seamless acceptance and visibility solutions 18

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