Slide1: Shaping a More Efficient Future Price Change Proposal


Slide2: Why Change Prices Costs going up Changes in operations and the market First price restructuring proposed since 2001 Prices track CPI over time


Slide3: High-Level Goals Growth Efficiency Cost coverage Addressing Positioning for the future


Slide4: High-Level Initiatives Shape-based pricing Less emphasis on weight Incentives Containers Drop shipping Sorting Packaging More choices Forever Stamp Low-cost Address Change Service


Slide5: Agenda Review full product line Strategy Significant changes Specific examples Timeline to 2007 Questions


Slide6: First-Class Mail Strategy Shape-based pricing schedules Letters Flats Parcels 2-ounce letter 63¢ 2-ounce flat 63¢ 2-ounce parcel 63¢


Slide7: First-Class Mail Strategy Shape-based pricing schedules Letters Flats Parcels De-emphasize weight 2-ounce letter 63¢ ►62¢ 2-ounce flat 63¢ ►82¢ 2-ounce parcel 63¢ ►$1.20


Slide8: First-Class Mail Significant Changes Forever Stamp Convenient 1-ounce single-piece price Good forever Single-piece 39¢ ►42¢ Postcards 24¢ ►27¢


Slide9: First-Class Mail Significant Changes Additional ounce 24¢ ►20¢ Letters over 1 ounce go down Flats over 6 ounces go down Similar pattern for workshare Automation letters 23.7¢ ►15.5¢ Presorted letters, flats, and parcels 23.7¢ ►20¢


Slide10: First-Class Mail Significant Changes Discontinue heavy piece discount Discontinue carrier route rates New Presorted Parcel category Presorted Parcels rate tiers


Slide11: First-Class Mail Significant Changes Presorted Letters Machinable rate tiers Current Proposed Nonmachinable rate tiers Current Proposed


Slide12: First-Class Mail Examples Letters Flats Parcels


Slide13: First-Class Mail Examples + 19¢ + 3¢ + 41¢ - 1¢


Slide14: Priority Mail Strategy Cover costs Especially large lightweight items De-emphasize weight for heavier items Continue to increase convenience


Slide15: Priority Mail Significant Changes Dimensional weight pricing for Zones 5-8 Lower prices for some heavier items Flat Rate Box becomes permanent


Slide16: Priority Mail Examples


Slide17: Priority Mail Examples + $8.50 + $4.60


Slide18: Express Mail Strategy Low-cost alternative for shipping documents Significant Change New 1-pound price


Slide19: Express Mail Examples


Slide20: Standard Mail Strategy Align pricing with operations Encourage growth of efficient, effective mail Expand shape-based pricing


Slide21: Standard Mail Significant Changes Increase drop ship incentives Create distinct prices for parcels Add “Not Flat-machinable” category


Slide22: Standard Mail Significant Changes Discontinue destination delivery unit rate for letters Differentiate prices for detached address labels (DALs) Add more presort options


Slide23: Standard Mail Significant Changes Nonmachinable surcharge factored into prices Nonautomation Letters Machinable rate tiers Current Proposed Nonmachinable rate tiers Current Proposed


Slide24: Standard Mail Significant Changes Flats Automation rate tiers Current Proposed Nonautomation rate tiers Current Proposed


Slide25: Standard Mail Significant Changes Parcels Machinable rate tiers Current Proposed Nonmachinable rate tiers Current Proposed


Slide26: Standard Mail Significant Changes Not-Flat Machinable Proposed rate tiers


Slide27: Standard Mail Examples


Slide28: Standard Mail Examples +47.7¢ +27.7¢ +8.6¢ - 5.2¢ +21.6¢ +1.6¢


Slide29: Periodicals Strategy Encourage efficiency Containers Drop ship Simplify copalletization rules


Slide30: Periodicals Significant Changes New 85¢ container rate Enhanced drop ship incentives Particularly for high-editorial content


Slide31: Periodicals Examples


Slide32: Periodicals Examples + 4.7¢ + 2.7¢ - 2.2¢


Slide33: Package Services Strategy More efficiency Streamline product offering


Slide34: Package Services Significant Changes Lower increases for DDU and DSCF entry Require barcodes Parcel Select items Discontinue retail Bound Printed Matter


Slide35: Package Services Examples


Slide36: Special Services Strategy Improve address quality Modernize services


Slide37: Special Services Significant Changes New low-cost One Code Address Change Service for letters Redesign Confirm service Redesign Insurance Reduced electronic Return Receipt fee Continue to realign Post Office Box fees


Slide38: Special Services Examples


Slide39: Special Services Examples


Slide40: Special Services Examples


Slide41: Special Services Examples


Slide42: Timeline 2006 2007 May Jun July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Governors Decision (March/April) Implementation (May/June) PRC Recommendation (Early March) Litigation (May through March 2007) Filing Date (May 3, 2006) 10 Months 1 Year


Slide43: Communicating USPS.com/ratecase DMM Advisory Mailers Companion Implementation Teams Federal Register Proposed Rule dmmadvisory@usps.com usps.com/mailerscompanion gpoaccess.gov


Slide44: Thank You Questions?