USPS Service
Changes
Issues
Opportunities
N.E.A.C.E.
May 20th, 2013
Tom Salvo, Postal Operations-Gannett Publishing Services
The United States Postal Service continues to endure the
negative effects of electronic diversion combined with a
weak economy and increased funding obligations.
While the USPS has continuously sought to make
operational improvements and improve efficiency, the
organization’s current financial position requires
additional action to ensure viability and self sufficiency.
Financial impacts of both the difficult operating
environment and regulatory framework under which the
USPS operates.
Actions USPS is planning to take to address its financial
position and outlook.
The USPS is losing up to $25 million dollars a day. Until
now, taxpayers have not been on the hook for its mounting
losses, but that could be about to change.
USPS Closure Update
Modified Network Plan and Revised Service Standards
The Postal Service is moving ahead with the rationalization of its
network. The implementation will be executed by modifying
service standards in two phases. The first phase is now done and
the second phase as already started, with more to come. Should
changes in circumstances warrant, this phased approach will
allow the Postal Service to reconsider implementation of the
third phase.
The plan is to retain all current business mail entry units
(BMEUs) for the time being. Should the Postal Service decide to
relocate or consolidate any BMEU operations, mailers will be
given 120 days advance notice and BMEUs will be relocated or
consolidated to nearby locations to minimize the impact on
mailers. The Postal Service is committed to simply and clearly
communicating all changes throughout the implementation
process.
DUO Operational Change
Delivery Unit Optimization involves relocating
letter carriers out of local Post Offices, stations
and branches and consolidating them into
centralized delivery offices that will continue to be
served by the same processing and distribution
center. The existing retail operation will require
less space and the office could then be downsized
to a smaller space nearby. This process increases
operational efficiency across the board and
considerable savings are realized in economies of
scale regarding transportation, maintenance,
custodial, leasing and employee complement.
Delivery Unit Optimization could affect larger mailers who dropship their mail as they will be required to take their mailings to
the new centralized location; however, the new centralized
location could save transportation costs since multiple ZIP Codes
will be sorted in one facility.
 The Postal Service is doing everything within its
authority to reduce costs, save money and streamline
operations and will continue to look for opportunities
to improve customer service. By consolidating
operations, adjusting delivery routes and restructuring
administrative and processing functions, the Postal
Service is adapting to meet the evolving needs of its
customers. These changes also help meet one of the
four critical business goals established by Postmaster
General Pat Donahoe: taking steps to become a leaner,
faster, smarter organization.
Contribution Factors
Mail Volume Decline: 25% from 2007 to 2012
Pieces in Billions
Postal Service Financial Condition
>Key Problems Healthcare benefits prepayment of $5.5B (2X)
>Congress continues to pass resolutions
>80% of budget related to labor costs
>Mail Volume Shifting To a Less Profitable Mix
Collapsing USPS Revenue
HOPES
Achieving the Business Plan requires full realization of all the
Strategic Initiatives
Net Debt ($ in billions) virtually eliminated
NAA STUNNED BY APPROVAL OF SWEETHEART DEAL FOR
NEWSPAPERS' LARGEST DIRECT-MAIL COMPETITOR
Arlington, Va. – The Newspaper Association of America is stunned by
the U.S. Postal Regulatory Commission’s decision today to approve an
anti-competitive and damaging negotiated services agreement (or
special contract rate) between the U.S. Postal Service and Valassis
Direct Mail.
“NAA believes this decision is contrary to law, and will challenge it
immediately and vigorously in the U.S. Court of Appeals for the District
of Columbia Circuit,” said NAA Chairman James M. Moroney III, CEO
and publisher of The Dallas Morning News.
Prior to the decision, NAA and its members called on Postmaster
General Patrick R. Donahoe to acknowledge the overwhelming
opposition expressed by the newspaper industry and others in the
mailing community during this proceeding, and urged him to withdraw
this special deal that benefits only one mailer.
Sweetheart Deal
As NAA’s comments filed with the PRC noted, granting this special rate to one
major competitor in the mailing business will cause significant financial harm
to newspapers throughout the country, and will not improve the financial
condition of the nation’s postal system.
"In reaching this decision, the Postal Regulatory Commission ignored the
many compelling comments it received objecting to a profoundly anticompetitive proposal,” said Caroline H. Little, NAA president and CEO. “In
fact, the Public Representative appointed by the Commission itself to represent
the views of the general public pointed out that this is the ‘first NSA that is
designed to manipulate prices and to alter the balance of market forces.’ The
Public Representative also said that ‘this NSA as currently structured is a loselose proposition for both the newspaper industry and the Postal Service.’
"The nation’s newspapers and the Postal Service share a long history of working
together to keep Americans informed and connected with one another,” Little
added. “The Postal Service should focus on cutting costs and getting the mail
delivered on time – and not on using rates to confer a significant and
unwarranted advantage on one competitor at the expense of an entire industry.
This special arrangement calls into question whether the Postal Service should
offer these types of deals in the first place.”
Changes
 The Postal Service Is Changing
 Transportation
 Processing Sites
 Speed of Processing & Delivery
 Critical Entry Times
Transportation
 Network Optimization
 NDC Network
 Managed Transportation
 Hubs
 Full Loads Between Processing Sites
Current
What it could look like
Processing
 Studies are complete
 Some plants will be closing
 Remaining sites repurposed
for increased mail volume at these sites
 Consolidation of Processing & Delivery
 Equipment
Speed of Delivery
 Changes To Service Standards
 5-Day Delivery was expected Aug,
2013 not going to happen yet
 Carrier Routes Eliminated and/or
Expanded
 Deliveries Continue To Increase
Electronic Documentation
 Electronic versions of postal reports
 Information uploaded to PostalOne!
 Replaces printed documentation
 Reduce paper usage and supplies
 Reduce manual-entry errors
 Save time at entry
 Required for Full-Service discounts
Postal Wizard
 Enter Postage Statements directly
 Easy to use
 No additional software or files
 Manual entry
 Ideal for basic mailings
Postal Wizard
Resources
http://ribbs.usps.gov
 Guide to Intelligent Mail for Letters and
Flats
https://gateway.usps.com
 Access to PostalOne! and Postal Wizard
 Test Environment (TEM) access
Discounts
 Learn the discount structure of all classes of mail
Discounts are available not just in Periodicals or Standard but 1st Class
invoices, classified billing, and accounts payable
 Promotions:
as well, i.e. PIA
Two New USPS® Promotions
Right on the heels of two currently-running USPS incentive promotions (the Mobile Coupon and
Click-to-Call Promotion and the Earned Value Reply Mail Promotion), come two additional
promotions scheduled to begin running August 1. One of the promotions is called the Emerging
Technologies Promotion and the other promotion is called the Product Samples Promotion. Both
promotions are scheduled to run from August 1 through September 30, 2013.
 2014 Full Service
Periodicals Machineable Flats - .9 cents to 4.5 cents per piece. No difference for
Saturation, High Density or Basic.
Standard Letters - 0.3 cents to 2.3 cents per piece
Standard Flats – 3.4 to 3.7 cents per piece
Implementing Full Service
 Register for the Business Customer Gateway
 Acquire Customer Registration ID’s and Mailer ID’s
(CRID’s & MID’s)
 Register for a PostalOne! Account
 Test Environment for Mailers (TEM): test uploading
data to PostalOne!

Register
for the USPS
Business
Customer
Gateway
Get Your
ID’s
Register
For CRID’s
& MID’s
Register
for
PostalOne!
account
Get Tested &
Approved for
USPS to use
eDoc
Go
Live!
Audits
Conduct an operational audit of handling all classes
of mail to ensure staffers understand USPS
regulations, this could be done with USPS
representative
 Address Hygiene, clean mailing list
 Monitoring the piece weight 3.3 ounces
 Monitoring saturation, high density, and basic
rates($0.04 to $0.055)
 Knowing the best drop location for the best
discount (Des. Delivery Unit, Des. Sectional
Center Facility, and Des. Bulk Mail Center)
Audits (cont.)
 Checking all postal statements to ensure proper




charges
Eliminating PO box deliveries (bulk drop pieces that
are eliminated to protect pre-print revenue)
Reduce mailed pieces to carrier delivery(i.e. 3rd party,
daily carriers)
Eliminating/reduce apartment delivery (bulk drop
pieces that are eliminated to protect pre-print
revenue)
Plan a meeting with Post Office rep to go over best
practices
Weights
DSCF (6.5 ounces)
Saturation
High Density
Basic
$0.07 $0.40$0.24
$0.10 $0.40 $0.28
$0.13 $0.49 $0.33
DDU (6.5 ounces)
Saturation
High Density
Basic
$0.07 $0.36 $0.21
$0.10 $0.36 $0.24
$0.13 $0.45 $0.30
 (20,000 pieces all going to DSCF switch to DDU,
$800 week postage savings)
Discount Structure
Postal discount structure is based on 2 premises, automation and
work sharing
a) Automation consist of the Optical Character Recognition
(OCR), commonly known as Intelligent Mail Bar-coding, this
feature is now in play for discounts, Full Service to be
implemented in January, 2014
b) Work share cuts cost, presorting by zip code, carrier route, or
walk sequencing, also trucking to the Sectional Center Facility
(SCF) or the Destination Delivery Unit (DDU) gives you a
better rate
Relationships
Build relationships with your local postmasters and
postal account representatives:
a) These individuals are experts in rates,
requirements, and regulations
b) Newspapers are generally at a disadvantage
because they have not
taken time to learn or manage the postal system
c) Call meetings with the local USPS manager of
mailing requirements or your assigned Business
Service Network Manager
Relationships (cont.)
d) Your newspaper should subscribe to the Domestic
Mail Manual which includes quarterly updates
e) There is also a Business Mailer Review letter that
will give advance notice of important changes in
rates and other news, they are available at
http://pe.usps.com
f) Another website with good information is
http://ribbs.usps.gov
Learning
Attend Seminars
a) The USPS holds several seminars & webinars
throughout the year
b) MAILCOM Conference, the Art and Science of
Mail Communications, is the largest mail
communication convention in the world
c) National Postal Forum
d) Join your local Postal Customer Council
Gannett Postal Plan
 Centralizing and standardizing our entire process
 80 newspapers doing all their own process
 33 different vendors throughout the company
 CAPS (Centralize Account Process System) and
manual funding account
 We are broken up into 5 zones, East, South, Mid-West,
Upper Mid-West, West
 Verify delivery, electronic statements
 Employees that understand the postal process, check
accounts, check delivery
Questions?
tsalvo@gannett.com
Thank You