® Flats Track for Periodicals, Catalogs & Printers David Mastervich Manager, Periodicals, Catalogs & Saturation Rosa Fulton Executive Director, FSS National

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Flats Track for Periodicals, Catalogs & Printers

David MastervichManager, Periodicals, Catalogs & Saturation

Rosa FultonExecutive Director, FSS

National Postal Forum

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Flats Track for Periodicals, Catalogs & Printers – NPF 2010 2


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SpeakersSpeakers

Rosa FultonExecutive Director, FSSUnited States Postal Service

David MastervichManager, Periodicals, Catalogs & SaturationUnited States Postal Service



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Rosa FultonExecutive Director, FSS

United States Postal Service



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Facts About Flats

Flats Strategy

Aligning USPS and Industry Processes & Systems

Agenda

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First ClassPeriodicalsSTD / Catalogs

Annual Flat VolumeAnnual Flat Volume

Periodicals20%

First-Class7%

39.6 Billion FlatsFY 2009 (RPW)

39.6 Billion FlatsFY 2009 (RPW)

Standard 73%Standard 73%



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PERIODICALS19%

FIRST-CLASS7%

STANDARD43%

SATURATION26%

HIGH DENSITY5%

FY 2009 Flat Mail by Class / Sort Level

Flat Volume by Class & Sort LevelFlat Volume by Class & Sort Level



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FIRST-CLASS7%

PERIODICALS20%

STANDARD73%

FIRST-CLASS8%

PERIODICALS17%

STANDARD75%

2005 – Total Flat Volume53.4 billion


2005 & 2009 Flat Volume Comparison2005 & 2009 Flat Volume Comparison



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PERIODICALS19%

FIRST-CLASS7%

STANDARD43%

SATURATION26%

HIGH DENSITY5%



PERIODICALS16%

FIRST-CLASS8%

STANDARD52%

SATURATION20%

HIGH DENSITY4%

2005 & 2009 Flat Volume Comparison2005 & 2009 Flat Volume Comparison



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20

25

30

35

40

45

50

55

60

2001 2002 2003 2004 2005 2006 2007 2008 2009Vol (Bil) 58.2 57.8 51.7 52.4 53.9 53.8 52.4 45.9 39.6

Flat Volume TrendFlat Volume TrendRPW

Flat volume decline FY 2009 -13.8%Flat volume decline FY 2009 -13.8%

FY 2005 – FY 2009Flat volume decline 26%

14.3 billion fewer flats annually

FY 2005 – FY 2009Flat volume decline 26%

14.3 billion fewer flats annually



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First Class Periodicals Standard Total Flats

2009 787,424 2,096,118 9,129,878 12,013,420

2010 663,624 1,863,566 7,697,093 10,224,284

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

Pie

ces

(000

)

Class

FY 2010 YTD Flat Volume Compared SPLYQuarter 1 (Oct - December)

-15.7%

-15.7%

-11.1%

-14.9%


QTR 1, 2010Flat volume decline -14.9%

QTR 1, 2010Flat volume decline -14.9%



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First-Class Periodicals Standard

2009 239,260 641,260 2,152,944

2010 205,999 553,270 1,973,238

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Flat Volume Comparison - January 2010 vs. SPLY

2009

2010


-13.9%

-13.7%

-8.3%

January 2010Flat volume decline -9.9%

January 2010Flat volume decline -9.9%

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Fully Automate Flats Processing

● Flats Sequencing

● Automate Mail Preparation

● Process improvements

Create Value

Customer Involvement

Flat StrategyFlat Strategy



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Flat Mail Entry

Collection Mail•Mailboxes•Post Offices

Origin Entry•Bulk Mail Entry Units

Drop Shipment•DNDC Entry•DADC•DSCF Entry•DDU Entry

P&DC / Post Office

Mailers



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Flats Process Today

Mailers

Bundle Distribution Bundle Prep Piece Distribution Delivery



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Eliminate Non-Value Added Work/Processes

Mailers

Bundle Distribution Bundle Prep Piece Distribution Delivery



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Flats Process Future

Mailers

Flats Sequencing

Delivery

Automated BundlePreparation

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USPS & IndustryFocus of process improvements

Overview of Flat Process

Print

CreateMailing

Bind

PersonalizeStitch/Staple

Strap / Wrap

Strap/wrapbundles

Palletize

Load bundles & wrap pallets

DesignMailing

Mailer

Deliver

Integrate flats / letters & deliver

Sort & Sequence

Piece distributionManual /

AFSM & FSS

Flat Prep

Unwrap / un-strap bundles

Dump & Sort

BundleDistribution

APPS / SPBS

Unload & Transfer

Flow to bundle distribution or dock transfer

Mail Owner Mail Preparer

USPS



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Background1. MTAC 58, 2000 – 2002● Preparing Flats Using Alternate Packaging

2. MTAC 71, 2002 – 2003● Flats Container Development

3. MTAC 81, 2003 – 2005● Flat Mail Preparation Optimization

4. MTAC 96, 2005 – 2007 Develop Interface to AFSM 100 Auto-Induction Process

5. MTAC 101, 2006 - 2007● Address Location for Flats Sequencing System

6. MTAC 115, 2007 – 2009● Requirements for preparation and entry of flat mail in the Flats

Sequencing System (FSS) environment.

7. MTAC 134, 2010 - TBD● Implementing FSS Presort Parameters

Joint USPS / Industry Workgroups



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David MastervichManager, Periodicals, Catalogs & Saturation

United States Postal Service



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Mixed Class Comailing

Optional FSS Pallet Preparation

Agenda

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Overview

Benefits

Volumes

Open Items

Recommendations

Next Steps

Additional Information




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Mixed Class Comailing Overview

Pilot started January 2008

Current Participation

● Approved: 3 sites

● Pending: 6 sites

Est. FY2009 Volumes

● 130 M+ pieces

No Comailing postage rate

● Rates based on corresponding class and sort level

Service level is Standard service, not Periodicals Periodicals publishers must be notified and provide written consent

Standard mailers do not need to be notified

Manual verifications; Mixed Class mail.dats not integrated into PostalOne!

Optional service offered to customers



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Postal Service Creates Cost Savings Opportunities

● More mail on pallets that would ordinarily be in sacks.● More mail entered at finer sort levels● Moves Periodicals from MADC to 3/5 digit bundles

Gets closer to USPS processing strategy of “a flat is a flat.”

Mailers Reduces postage cost (USPS revenue)

● Increased presort level● Drop shipped closer to destination

Less transit damage from reduced number of sacks

Mixed Class Comailing Benefits



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Pro-rated bundle and pallet charges for Periodicals mail

No ADC entry; allow NDC entry at ADC rates

Service Level is Standard

● Use eDoc to remove Periodicals from PER measurement

Mandatory use of OEL with human-readable “MIX COMAIL” language

Each piece is required to use Full Service ImB

● Issue: Mixed Class not integrated into PostalOne!, so these pieces won’t be able to benefit from all Full Service features.

Mixed Class Comailing Requirements

Critical



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Comail vs. Copal

P / S

PER STD

P / S P / S

PER STD

PER

CoMail•Pallets created onsite where bundles are Mixed

•Sometimes pure PER or STD bundles will exist

CoPal•Consolidator site

•Pallets created from bundles created offsite

•Always pure PER or STD bundles

Comail Pallet CoPal Pallet




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Completed Steps1. DMM language and Federal Register notice vetted through 186 internal

review process

2. Mail Classification Schedule changes/comment period

3. IT Requirements ~85% complete

Next Steps1. Pricing Steering Committee review

2. Board of Governors review

3. File Federal Register Proposed Rule – 30 day comment period

4. File PRC notice – 10 day comment period??

5. Make any changes to DMM language if necessary

6. Finalize IT requirements (work with 3rd party vendors as well)

7. Communicate and Train field

8. Implement


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Background – FSS Optional Flat Mail Prep

Used industry data to develop and model concepts for different components of flats mail preparation:

● Bundle preparation

● Containerization

● Presort parameters

● Destination entry



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MTAC 115 Industry Collaboration

MTAC 115 and IDEAlliance initiatives, teams further explored:

● Flat Mail Prep and Entry in an FSS Environment

Tested concepts on bundle preparation

Tested various container preparations

Modeled FSS schemes



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FSS schemes:

● FSS sort plans mirror 5-digit and 5-digit scheme sort plans

● During test, Dulles had 49 FSS sort plans

19 sort plans with 1, 5-digit ZIP Code

20 sort plans with 2, 5-digit ZIP Codes



Test results:

● Periodicals had few FSS sort plan pallets

● Pallet counts remained same, or less for PER and STD mailings

● FSS scheme pallet (all sort plans at a site) has potential

Presort Test Plan Results



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Test Concepts and Model Results

Pure FSS sort plan pallet can flow directly to the bundle prep operation and bypass APPS processing

Determined potential pallet levels:

● Pure FSS (single sort plan scheme)

● Pure FSS (multiple sort plan schemes)

● Combined FSS and non-FSS



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Defining

Business Rules



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FSS Bundle & Pallet Parameters

Defined and developed parameters:● Bundle

Optimal bundle height of 3”, 4”, 6” Replaces CR piece minimum for packaging purposes

● Container Content determined by FSS scheme & destination FSS ZIP Codes

● Presort Driven by FSS Label List and sort plan contents

● Entry Destination entry, at minimum, should not change

from today and may contract with optimized network



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Optional FSS Bundle Preparation

Combine all 5-digit flat mailpieces for a sort scheme into the bundle● Carrier route and 5-digit● Create bundles of uniform height:

e.g. 3”, 4”, or 6”● Place on appropriate pallet level



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FSS Single Sort Plan Scheme Pallet● Containing one or more ZIP Codes sorted

on FSS at the same time● Equivalent to 5-digit/5-digit scheme pallet

Pallet sent directly to FSS preparation area for loading Automation Compatible Trays



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FSS Multiple Sort Plan Schemes Pallet● Contains mail for all FSS sort plans processed

at the facility● Equivalent to an SCF pallet● May require separate FSS and non-FSS

pallets at the facility

Pallet sent to an APPS for bundle distribution

Pallets can “go to the head of the line” for APPS processing



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Combined FSS bundles and non-FSS bundles on the same pallet● No separation of mail by automation machine type (FSS, AFSM

100, etc)● Equivalent to a 3-digit or SCF pallet

Pallet sent to an APPS for bundle distribution



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What’s Next

Activities in progress:

● Develop presort software parameters

● Publish presort business rules for software vendors to code

● Implement Optional FSS prep

● Communicate FSS label list schemes

● Leverage alternatives to increase bundle and pallet scheme density (e.g. comail, copal)

● Continue development efforts to automate bundle preparation



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What’s required to earn a certificate? Attend five workshops of the Flats Track for

Periodicals, Catalogs and Printers How do I get my certificate?

Register for your certificate on the National Postal Forum Website before July 31, 2010

www.npf.org Answer the three true/false questions for

each of the five sessions you attended Certificates will be mailed upon certification

Flats Track Certificate ProgramFlats Track Certificate Program



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True or False:

1. The FSS rollout schedule has been unaffected by the recent economy?

2. The IMB holds promise for catalog customer service advancements?

3. The IMB is mainly for package fulfillment applications?

Flats Track Certificate Program - QuestionsFlats Track Certificate Program - Questions

FALSEFALSE

TRUETRUE

FALSEFALSE



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Documents

® Flats Track for Periodicals, Catalogs & Printers David Mastervich Manager, Periodicals, Catalogs & Saturation Rosa Fulton Executive Director, FSS National