Move Update:

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Greater Cleveland PCC
Move Update Will You Have to Pay the "Fee
Assessments" in May January? David
Robinson, Director, Address Quality, Pitney
Bowes Friday, April 24, 2009
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Todays Agenda

• Move Update
• Requirements
• Making the case for Move Update
• Effectiveness of Current M.U. (and A.Q.)
  Solutions
• USPS Goal on UAA
• Compliance Options
• How Move Update Compliance Gets Measured
• Fee Assessments, or penalties?
• What are they?
• How are they measured and applied?
• Appeals Process
• Best Practices

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Move Update Requirement

• Effective November 2008, the Postal Service
  required all addresses on mailings that receive
  discounts for First-Class Mail or Standard Mail
  service, whether presorted or automation (or
  carrier route, for Standard Mail), to undergo
  address correction within 95 days prior to the
  mailing.

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Move Update Overview

• Value to the USPS
• Reduces the number of mailpieces in a mailing
  that requires the USPS to incur additional
  handling costs to forward, return or destroy UAA
  Mail
• November 23, 2008 Rule Change
• Extended to all discounted First-Class Mail and
  Standard Mail
• The revised standard includes
• Letters, flats, parcels and Not-Flat Machinable
  mailpieces
• Timeframe reduced from 185 days to 95 days prior
  to the mailing

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Making the Case for Move Update America on the
Move

• Each year, 15 of Americans move or change their
  mailing address
• 1 out of every 6 families moves each year
• Approximately 19 of all businesses move
• USPS processes over 45 million permanent Change
  of Address (COA) orders each year
• The USPS adds 1.8 million new delivery points
  each year

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Making the Case for Move UpdateImpact on UAA
Mail

• Almost 5 out of every 100 mailpieces are
  Undeliverable-as-Addressed (UAA) Mail
• First-Class Mail UAA Rate
  3.4
• Standard Mail UAA Mail Rate 6.4
• Standard Mail accounts for almost 63 of all UAA
  Mail
• 75 of UAA Mail is move-related
• First-Class Mail Move UAA Rate 2.6
• Standard Mail Move UAA Mail Rate 4.8

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Address Quality Pyramid Tools
Validate
Standardize
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FY04-FY08 UAA Volumes / Costs
What the USPS Sees as a result
FY04 FY04 FY08 FY08
Vol(Billions) Cost(Millions) Vol(Billions) Cost(Millions)
Forwarding 1.985 422 1.789 326
Return-To-Sender 1.603 822 1.436 727
Waste 6.135 270 6.851 365
Other 343 221
Total 9.724 1,856 10.076 1,639
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USPS Goal on UAA Mail

• Established in 2004
• Reduce overall UAA mail costs
• by 50 (lt1B) by 2010!!!

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USPS-Approved M.U. Methods

• Pre-mailing Methods
• NCOALink national COA database
• In-house Solutions
• Third Party Services
• FASTforward Multi-line Optical Character Reader
  (MLOCR) processes

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USPS-Approved M.U. Methods

• Post-mailing Methods
• Full-Service ACS Intelligent Mail Barcode
  (Full-Service)
• OneCode ACS Intelligent Mail Barcode (Basic)
• Traditional ACS Address Change Service
• Ancillary service endorsements
• Address Service Requested, Return Service
  Requested, Change Service Requested
• Change Service Requested only valid with
  First-Class Mail if using ACS or OneCode ACS
• Alternative Move Update (First-Class Only)
• 99 Rule
• Legal Constraint

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Moving Forward

• Move Update Paper Trail
• Performance Based Verification (PBV)
• MERLINs Not Just Barcode Quality Anymore
• Fee Assessments or Penalties?
• FASTforward Continuation Strategy
• FFMUN
• 13 month dataset moving to 18 month
• FASTforward going away as we know it

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Move Update Paper Trail

• Revised Postage Statements
• Whoever signs postage statement may be liable for
  Move Update compliance and penalties

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Performance Based Verification (PBV)

• Evaluates mailers use of change-of-address
  information
• Uses live samples from mailings
• Streamlines mail acceptance, improves customer
  service
• Provides mailers with Move Update reports giving
  electronic feedback on address quality.
• Move Update reports are available on PostalOne!
• For mailers whose mailings are processed on
  MERLIN (Mail Evaluation Readability Lookup
  Instrument) at sites that have the PBV process.
• Continuous Mailers will have to get hardcopy
  until May
• National deployment of the PBV system March 31,
  2009

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PBV Process

• At business mail acceptance
• A sample is selected from every mailing (sample
  size determined by PostalOne!)
• MERLIN captures barcode, name and address
  information into a data file and electronically
  transmits the NCSC
• NCSC processes using NCOALink based logic and
  returns results to PostalOne! which presents a
  Move Update report
• This process is completed before the postage
  statement is finalized in the PostalOne! system
  so that the results of the report can be
  discussed with the mailer
• Pieces with COA order are identified by a MERLIN
  mail piece ID and can be pulled from the MERLIN
  sample and copies provided to mailers

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PBV Process - Continued

• Continued
• Move Update reports will be provided to the
  mailer whose mailings are processed on MERLIN at
  sites that are activated for the PostalOne! Move
  Update verification process
• The USPS established a tolerance level of 30,
  beginning May 11, 2009 to provide customers the
  opportunity to improve their Move Update
  processes
• As performance throughout the mailing industry
  improves, the USPS will tighten the tolerance
  levels every four months
• Additional postage may be paid from the permit
  imprint account used for the mailing or from
  another permit imprint or additional postage
  account at the mailers discretion.

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Performance Based Verification (PBV) Report
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Fee Assessment Overview

• Standard Mail .07 per piece entire mailing
• First-Class Mail full rate no discounts
• Beginning January 4 2010, for First-Class and
  Standard Mail
• A mailing will qualify for postal discounts as
  long as its error rate for Move Update compliance
  is under 30 percent
• Performance Based Verification (PBV)
• System devised to determine sampling requirements
  and more!

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Heres the Math
Example 1
100,000 Mailing Size - Standard Mail
1,000 Sample Size
50 Addresses with COA's
35 Addresses with Updates reflected on the mailpiece
15 Addresses NOT Updated
70.00 Merlin Sample Score - No Fee Assessed

100,000 Mailing Size - Standard Mail
1,000 Sample Size
50 Addresses with COA's
34 Addresses with Updates reflected on the mailpiece
16 Addresses NOT Updated
68.00 Merlin Sample Score
0.07 Added Cost per Mailpiece
7,000.00 Fee Assessment / Penalty Due
Example 2
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Real Numbers Reported by MERLIN
Volume of Mailing Move Update Sample Size Total COA on File Total COA against sample Total COA Not Updated Error (gt70 Pass) Fee Assessment / Penalty How Close are you?
252,676 1,309 33 2.52 15 54.55 17,687.32  
140,266 1,023 26 2.54 6 76.92    
Potential Fee Assessment / Penalty       8 69.23 9,818.62 2
251,875 1,311 27 2.52 7 74.07    
Potential Fee Assessment / Penalty       9 66.67 17,631.25 2
Sample Impact of two pieces
Sample Impact of two pieces
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Examples of Issues Affecting Grading(mailers
need to re-evaluate their processes)

• MERLIN uses Standard Matching logic
• USPS counts matches for New Address, Closed PO
  Box, MLNA, and Moved to Foreign Address
• Timing of databases, updates, and processing
• All matching programs are not equal
• ASEs rely a lot on the carrier

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Move Update Best Practices

• Pre-Mailing solution (NCOALink) at or near the
  time of the mailing
• Actions defined for all possible results
• Post-Mailing solution (ACSTM)
• Return Mail processes
• Process Maps
• Created and maintained (the world keeps changing)
• Report Tracking
• Proof of compliance
• Detection of issues

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Appeal Process

• Gather all supporting documentation
• Enlist support from your Move Update solutions
  provider
• Request second level review with USPS acceptance
  personnel
• If unable to resolve
• Appeal to your Mailpiece Design Analyst (MDA),
  Business Mail Entry supervisor, or other
  designated second level USPS employee
• If local efforts are exhausted, appeal to the
  next level
• Send a written appeal to the postmaster within
  30-days
• The appeal is forwarded to the Pricing and
  Classification Service Center for review and
  final agency decision (Domestic Mail Manual G020)
• The PCSC will respond to the origin site with the
  findings

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Summary

• The USPS must reduce the cost of UAA mail
• The tools and services are now available to
• Determine compliance risk factors
• Implement compliant and best practice solutions
  that meet your corporate and industry
  requirements
• The cost of non-compliance will be significant
• The USPS will continue driving down their UAA
  costs, which means tighter rules and/or higher
  fees and penalties
• This also mean more or your mail will reach your
  intended customer in the most efficient manner at
  the lowest possible cost.

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Questions
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