To Greater Success

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To Greater Success
Rhonda Schorr USPS Shipping Solutions Specialist
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Agenda

• The Economy
• Market Trends
• Opportunities To Save
• Strategies Moving Forward

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Economic Outlook

• Many Retailers Continue To File For Bankruptcy
  But Improvements Are Now Being Noticed
• Unemployment Rates Continue To Be At An
  Unacceptable Level In America
• Banks Continue To Freeze Credit And With
  Inflation At High Levels Consumers Continue To
  Buy Only Necessities
• Online eCommerce Was Down For The First Time In
  Its History In 2009 But Now Demonstrating Signs
  Of Life
• 2010 Continues To Show Encouraging Trends

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State of Our Business Headwinds

• Strong Competitors
• Package Market Declining
• Economic Uncertainty
• Consumer Confidence Down but Improving
• We Need To Keep Working Customer Care- Bring
  Value To Customers

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State of Our Business Tailwinds

• Great Business Partners
• New Pricing Freedoms
• Last Mile Strengths
• Market Growth Is Lightweight And Residential
• Economic Uncertainty
• Customers Looking For Lowest Cost Provider

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2009 Volume Share
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Breakdown Of Package Market By Weight
Who Controls The Market Share
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16
45
5 Pounds Or Less
11 To 70 Pounds
6 To 10 Pounds
3.4 Billion Pieces
1.4 Billion Pieces
3.8 Billion Pieces
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Package Market Growth Trends By Weight
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B2C Shipments On The Rise
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Market Trends

• B2B Is Stagnant
• B2C Is Growing
• Packages Are Getting Lighter
• Lightweight Shipments Going B2C Are Costly To
  Deliver For Our Competitors
• Shipments Weighing Less Then 5 Lb - Our Sweet
  Spot

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USPS Has Under-1lb Pricing. And No Net Minimums.

• Competitors impose a net minimum price
• Even with their discounts youll never pay less
  than the net minimum currently 4.57.
• So what does this mean for you?

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CFA Competitive Financial Analysis
Let me show you how I partner with your shipping
department to provide you with a realistic
comparison when searching for the best shipping
solutions
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What Are You Really Paying?
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Our Competitors Surcharges Continue To Go Up
Each year
Competitors use surcharges to mask the true cost
of shipping
Example.10.00
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Surcharges Are Big Business
Look How Much is Generated With Just 3 Of These
Increases
1 UPS pieces to/from all 50 states. Volume
estimates are from market segmentation models
maintained by The Colography Group. 2 UPS pieces
shipped within the lower 48 states only. Volume
based on preliminary estimates
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Since 2004 our competitors have Steadily
Increased Existing Surcharges and have Added New
Surcharges. Todays ?????????
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50
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Delivery Area Surcharge (DAS)

• DAS Is In Addition To The Residential Surcharge
• Regular DAS Is 2.50 In Continental US
• New Extended DAS 2.75 In Continental US
• DAS Charge Is Also Subject To Fuel Surcharge
• Over 80 Of DAS ZIPs Have Extended DAS
• Over 57 Of Zips Receive DAS Or Extended DAS

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What Do Our Competitors Consider Rural?
Does National Airport in D.C. or Malibu, CA, seem
rural to you? It does to our competition.
Above in red Five-digit ZIP Codes subject to
competitor 2010 delivery area surcharges (DAS)
for commercial and residential delivery
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• Almost 40 Of Total Shipment Costs Are Now Made
  Up Of Add-on Charges.
• Parcel Magazine
• Our Clear, Up-front Pricing Makes It Easy.
• What You See Is What You Get Rates
• No Fuel, Residential, Or Delivery Area Surcharges
• No Surprises

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Because Our Headquarters Executives Heard You
Express Mail

• Priced to compete
• New incentives
• Volume discounts.
• Commercial base discount is increased and
  expanded.
• New Commercial Plus pricing tier to reward
  high-volume shippers.
• To qualify, customers must ship
• More than 6,000 pieces per year for Express Mail
• Average discount
• 14.5 percent

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Priority Mail

• 2010 Average price change 4.7 percent
• New incentives
• Commercial base pricing extended to IBI
• New Commercial Plus pricing tier to reward
  high-volume shippers
• To qualify, customers must ship
• More than 100,000 pieces for Priority Mail
• Average discount
• 7.0 percent
• New small flat-rate box

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2010 Flat Rate Prices
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International Products

• Global Express Guaranteed(GXG) Reliable,
  date-certain shipping to over 190 countries.

1-3 Business Days
Express Mail International(EMI) Reliable,
expedited service to over 190 countries. Now
available with day-certain delivery to select
destinations.
3-5 Business Days
Priority Mail International (PMI) Reliable,
priority handling to over 190 countries worldwide.
6-10 Business Days
First-Class Mail International
Reliable and economical means of sending
correspondence, documents and lightweight
merchandise weight up to 4 pounds.
Varies by Destination
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Postal Qualified Wholesalers

• Access Worldwide Brokers Worldwide Cloutier
  Direct, Inc. CMS, Complete Management, Inc.
  Dahlgren's Mailing Service, Inc. Distribution
  Postal Co., Inc. Express Messenger
  International Express Postal Options
  International (XPO) Global Postal Solutions,
  Inc. IBC, Inc. International Delivery
  Solutions (IDS) Mail on the Move LLC
  International Mail Service, Inc. (IMS) Pitney
  Bowes International Mail Services Priority Post
  Co., Inc. RR Donnelley World Marketing Zip
  Mail Services, Inc.

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Free Packaging Opportunities

• Available for all priority express mail
  shipments
• Same domestic packaging can be used for intl
  shipments
• Customized/co-branding available to those who
  qualify
• Brand with the most trusted government agency
• Free packaging is cradle to cradle certified

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New Growth Opportunities

• Customers cant try on touch, see or feel the
  products before purchasing
• An emerging driver of growth in the market place
  is the need for reverse logistics solutions
• There is an increasing need for items that are
  sold to be returned, repaired, recycled,
  recovered or recalled

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Strategies Moving Forward
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Visibility Tracking

• Create more visibility with tracking
• More passive scans
• Added 123 in FY09
• 562 million additional enroute scans
• Scan for arrival at unit for all packages
• Increase delivery scan execution
• Release more tracking data to customers
• Release Out For Delivery event

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WHATS NEW AND EXCITING ?
You heard about it months ago. Its here
and capturing the attention of the Shipping
Industry from coast to coast.
C U B I C P R I C I N G !!!!
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Shipping Services Price ChangeEffective January
4, 2010

• Priority Mail Cubic Pricing
• Five price tiers
• Tier 1 items up to .10 cubic foot
• Tier 2 items more than .10, up to .20 cubic
  foot
• Formula continues up to .50 cubic foot
• Approved markings required
• marked directly above, directly below,
• or to the left of the postage.
• PC postage indicia markings based on size
• Tier 1 up to .10 cubic foot marked Cubic
  .10.
• Permit imprint marked Cubic or CUBIC.

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Shipping Services Price ChangeEffective January
4, 2010

• Priority Mail Cubic Pricing
• Priority Mail Commercial Plus Cubic Pricing
• Measure the length, width, and height in
  inches
• Round off each measurement to nearest inch
• Multiply the length by the width by the height
  and divide by 1728 (L X W X H) 1728
• Example 6 x 6 x 6 216 divided by 1728
  .125
• Calculated at Tier 2 prices .10 to .20

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Shipping Services Price ChangeEffective January
4, 2010

• Priority Mail Cubic Pricing
• Available to
• Existing shippers -
• with volume that exceed a minimum threshold
• New and existing shippers -
• with a customer commitment agreement with the
  USPS
• Approved payment method required
• Permit imprint (with requirements) or PC Postage
• Price based on size and weight
  thresholds
• lt 0.5 cubic foot and lt 20 pounds
• Five price tiers
  starting at 4.22

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Recap

• If You Arent Shipping Any Packages With Us, You
  Are Over Spending
• Lowest Prices on 1-5lb Shipments
• No Add-On Charges, Or Net Minimums
• Leveraging New Pricing Freedoms CUBIC PRICING
• Preparing For Future Growth By Expanding Our
  Reach, Developing New Products And Simplifying
  Ease Of Use
• Creating A Company That Puts Its Customers First
• NOW THAT WE HEAR YOU .Let Us Try To Meet Your
  Challenges!

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Query
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Discussion
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Dialogue
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interview
Examination
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Dialog
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• THANK YOU
• USPS
• Rhonda Schorr,
• Shipping Solutions Specialist
• Rhonda.L.Schorr_at_USPS.GOV