Memo to Mailers
UNITED STATES POSTAL SERVICE
Feb 2002

WHAT'S INSIDE
REVENUES
NPF SIGN-UP
CUSTOMER SATISFACTION
KEEPING POSTED
POSTAL NEWS BRIEFS
SPRING FORUM

When it comes to innovation, the U.S. Postal Service delivers. Posts all over the world are creating new business models for the benefit of their customers, the Postal Service is no exception. Its landmark agreement with Consignia puts USPS at the forefront of global postal innovators.
Under the agreement, Consignia, formerly the British Post Office, will deliver the Postal Service's Global Express Mail™ (EMS) and Global Air Parcel Post (Air Parcels) in 23 European countries.
"This agreement will allow us to greatly enhance our track and trace capabilities, providing centralized access to information and giving the American public more flexible service options and more reliable service," says James Wade, vice president of International Business for USPS. "We will be using a single delivery partner with an integrated information technology system. This will be a vast improvement over working with 23 different postal administrations and delivery agents with dissimilar methodologies and standards."
The actual delivery of packages will be made by Consignia's pan-European parcel company, General Logistics Systems (GLS). The GLS network is made up of 23 national parcel companies, some wholly owned by GLS, with others operating as partners. In total, the GLS network serves customers in 30 countries throughout Europe.
"We have developed a novel, groundbreaking approach," said John Modd, managing director of Consignia's international services. He says it's a "wake-up call" for the entire postal industry. "We're adapting to the needs of our customers," he adds.
He says he's delighted that Consignia has earned the confidence of another major player in the world's postal market. "The GLS network is a key player in the European parcel market, where it has an excellent reputation for high-quality and reliable parcel service," he says.
The service was successfully tested last November and December. Air parcels to all 23 destinations are now being delivered via Consignia's GLS network. At the beginning of January, EMS items destined for Sweden, Netherlands, Germany, France, Denmark and Austria were tendered to the GLS network.
Delivery of EMS items via Consignia's GLS network will be phased in through March for the remaining European destinations. They are Andorra, Belgium, Finland, Gibraltar, Greece, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Monaco, Norway, Portugal, San Marino, Spain, Switzerland and Vatican City.
Upon full implementation, GLS will deliver all of the Postal Service's EMS and Air Parcel volume to Europe - an average of 6,000 pieces daily. There will be no change to existing EMS and Air Parcel postage rates as a result of the agreement.
Wade adds that a new approach to air parcel delivery in Asia is being worked out. Look for an announcement on that.
James Wade, vice president, USPS International Business (left), celebrates new Consignia agreement with John Modd, managing director, International Services, Consignia, and Carl-Gerold Mende, senior vice president, Business Development, General Logistics Systems

MAIL IRRADIATION
limited
The Postal Service continues to use irradiation technology on targeted mail - not all mail - in its effort to keep the mail safe from biohazards. The only mail currently being irradiated is mail going to specific government offices in ZIP Codes 202, 203, 204 and 205.
USPS is leasing irradiation facilities in Ohio and New Jersey to decontaminate mail and has issued contracts for purchase of irradiation equipment.
Current irradiation is done with electron beam technology. The process was tested and found effective by an inter-agency team of experts. The group was organized by the White House Office of Science and Technology Policy and included the Armed Forces Radiobiology Research Institute, the Food and Drug Administration, the Department of Agriculture and the National Institute of Standards and Technology.
Irradiated mail is sterile and poses no hazard. It is not and cannot be radioactive. Irradiation can adversely affect some mailable products, such as biological samples, diagnostic kits, photographic film, food, and eyeglasses and contact lenses. Electronic devices would likely be rendered inoperable and drugs and medicines also can be affected. Again, however, this process is limited to only certain mail.
USPS will continue to take responsibility for selecting and implementing the best technology available to protect the health and safety of postal employees, the American people and the mail.

Note: Pages 3 and 4 contain the National Postal Forum Registration Form that is available for downloading in PDF version.

USPS, major customers agree on rates plan
The Postal Service reached agreements with many of its major customers on a plan to raise postal rates June 30, three months earlier than projected. The Postal Rate Commission (PRC) suggested this approach to the current rate case in light of the Sept. 11 attacks and bioterrorism, both of which have had a negative impact on the Postal Service's bottom line.
The agreements remain subject to review by the PRC and the Governors of the Postal Service.
It's estimated that the settlement proposal would generate an additional $1 billion compared with the revenue generated if the case were fully litigated.
The cost of a First-Class stamp would rise from 34 cents to 37 cents as part of an overall package that would increase rates for direct mail marketers, magazine publishers, nonprofits and others.

Revenues, mail volumes decline
The effects of Sept. 11, bioterrorism and a sluggish economy affected Postal Service revenues and mail volumes through the first quarter of fiscal year 2002.
In a report to the Postal Service Board of Governors, Chief Financial Officer and Executive Vice President Richard Strasser said Quarter 1 net income of $108 million was $521 million under plan. Total revenue for the quarter (Sept. 8 through Nov. 20) was $15.4 billion.
Strasser also reported that overall mail volumes dropped some 2.8 billion pieces (or 5.5 percent) below the same period last year. That marked the single largest quarterly mail volume decline in recent history.
Standard Mail volume - reflecting softness in the advertising market--led the decline, posting 2.2 billion fewer pieces than last year. First-Class Mail dropped 550 million pieces below last year's volume for the same period, while Priority Mail volume dipped 47 million pieces.

KEEPING COSTS DOWN
One bright spot in the report focused on Quarter 1 expenses. Total expenses of $15.3 billion for the quarter were $355 million below plan, and only 0.5 percent above the same period last year. Success in controlling expenses was due to aggressive work-hour cuts, including management and staff reductions.
During Quarter 1, the Postal Service reduced work-hour usage by 17.8 million work hours compared with the same period last year. That reduction, coupled with the cumulative work-hour reduction of 23.1 million hours in fiscal year 2001, means the Postal Service has cut 16,300 full-time career employees (more than 40 million work hours) from its operating expenses since fiscal year 2000. At the same time, the Postal Service added more than 1.6 million addresses to its national network.

Customer satisfaction increases
In a recent Gallup survey, 93 percent of households nationwide reported having a positive view of the Postal Service. Seventy-one percent of households rated USPS's overall performance as excellent or very good.
In addition, External First-Class (EXFC) service performance scores hit or exceeded 93 percent for the 17th consecutive quarter. The results, independently measured by PricewaterhouseCoopers, cover overnight delivery service performance for the period Sept. 8, 2001, through Nov. 30, 2001. Big Sky (MT) and Springfield (MA) Performance Clusters each achieved a score of 96 percent, while 17 additional performance clusters attained scores of 95 percent. Performance clusters are geographic management units established by the Postal Service.
EXFC externally measures collection box to mailbox delivery performance, continually testing a panel of 463 ZIP Code areas selected on the basis of geographic and volume density from which 90 percent of First-Class volume originates and 80 percent destinates. EXFC is not a system-wide measurement of all First-Class Mail performance.
PricewaterhouseCoopers measures service performance for overnight, two-day and three-day service commitment areas to provide national, area office and performance cluster estimates of service performance. The data are compared with Postal Service delivery standards and the results are presented to the public each postal quarter.

Protect against identity theft
The Federal Trade Commission reports that identity theft topped the list of consumer fraud complaints received by the agency in 2001. Identity theft accounted for 42 percent of the complaints tracked by the FTC. Want tips on how to protect against identity theft via the mail? The Postal Inspection Service offers them at http://www.usps.gov/cpim/ftp/pubs/pub280.pdf.

FYI
Business mail passes through many stages before it arrives at the delivery address. Its timely,intact arrival depends upon all the right things happening along the way. Mail Preparation Total Quality Management (MPTQM) shines the light on quality during the design and preparation stages of the mail. For more information about MPTQM, go to www.usps.com/mptqm.

Big picture for the long term
Postmaster General John E. Potter told mailers they'll be "pleasantly surprised" by the final draft of the Postal Service's Comprehensive Transformation Plan, which goes to Congress next month. "It's about the big picture and where we're going long term," he said at the Mailers' Technical Advisory Committee (MTAC) meeting in Washington.
A comment period for the Outline for Discussion: Concepts for Postal Transformation ended Jan. 31. It was intended to generate discussion and it did, notes Potter. When the final plan is released, it won't be 5,000 pages and "it's not going to have everybody's little tweak here and there," he says.
In addition to the Outline for Discussion, USPS also held focus groups with the public and small businesses. Comments focused on issues such as universal service, cost containment, staff reductions, productivity, rates, customer incentives and others.
USPS releases its comprehensive transformation plan to Congress and the General Accounting Office on March 31.
BUILDING STRONG WORKING RELATIONSHIPS
The new year brings changes to two key customer organizations. Ken Cowell, manager, USPS Customer Events, has reassumed his role as the national postal co-chair of the Postal Customer Council Advisory Committee (PCCAC). In addition, he has been named co-vice chair of the Mailers' Technical Advisory Committee.
Cowell is a customer advocate and has always built strong working relationships between the Postal Service and its customers. He has served as a past PCC national postal co-chair and has managed the National Postal Forum for the past several years.
"I am looking forward to working with customers in both the PCC and MTAC communities," says Cowell.
At the PCCAC, Cowell replaces Pat McGee, who moves to his new position as manager of Market Development. McGee's new duties encompass the development of customer-relevant strategic marketing plans for business and consumer segments. In addition, his unit will orchestrate specific marketing initiatives for new emerging markets, mid markets, small business and multicultural markets.
"I have enjoyed working with our PCC customers over the past few years. They are creative, committed and dedicated to enhancing the value of local businesses through the use of the mail," McGee said.

PCC BOARD MEETINGS
By Becky Dunn,
National PCC Industry Co-Chair
Meetings. Just the word can make you cringe. So many of them end up being a case of time spent with little or no progress made. Without planning, they frustrate attendees, whittle away at enthusiasm and sometimes put you farther back than where you started!
First, you need to set an agenda. Share that agenda with your attendees prior to the meeting if possible. Put your agenda items in the order of importance so you can get the big items taken care of first. Estimate how much time you will need to cover each item and don't put more on the agenda than you will be able to cover in the time allowed for your meeting. I always make the last item "Open Discussion." This gives everyone a chance to mention items of concern, share news, ask questions or bring up topics not on the agenda.
You have your agenda set, so now you need to direct the meeting so progress can be made on your agenda items. Let people know that the meeting needs to begin on time. Make sure everyone has the agenda and let them know that you plan to follow it. Now you have the unenviable task of keeping everyone on track. Remind people of the topic at hand and let them know that the group can discuss their topic or issue later in the meeting during the "Open Discussion." Be flexible if necessary, but try to maintain the timelines you planned for your agenda. You may need to carry an item over to a future meeting or assign members to work on the item before the next meeting. It's important that the meeting not stall on one topic. Making progress on one item is not nearly as exciting as making progress on three or four or five items!
In my experience I've found board members more willing to come to meetings because they know they will be productive. The end result is board members who are enthusiastic to be on the board, and PCC members who have a more vibrant PCC because things actually happen instead of just being talked about in meetings.
PCC LEADERSHIP CONFERENCE REMINDER
The next PCC Leadership Conference will be held April 21 at the National Postal Forum in San Diego, CA. The conference promises to be more interactive and will provide additional insights into building a successful PCC. Monitor the PCC website for updated conference information.

PCC WEBSITE REGISTRATION
Stay up-to-date with the latest PCC news and website updates. Sign up for the weekly e-mail update of the PCC website by sending an e-mail to register@pcc.tteam.com. Please note: the e-mail account you use to sign up will be the one on which you will receive your updates. The website address is www.usps.com/nationalpcc.

PCC COMMUNITY WELCOMES NEW CO-CHAIRS
INDUSTRY CO-CHAIRS
Pamela Brown, Taylor Systems Engineering,
Southeastern Michigan PCC
Rich Casford, Whittier Mailing Services, South Coast (CA) PCC
Art Finch, Moss, Inc., Sacramento CA PCC
Susan Hall, Pitney Bowes, Piedmont Triad (NC) PCC
Steven Kulick, Haband, Northeast PA PCC
POSTAL CO-CHAIRS
Roy Montague, acting postmaster, Durham, NC,
Greater Triangle Area PCC
Steve Sondler, acting postmaster, Providence, RI,
Providence RI PCC

POSTAL NEWS BRIEFS
9/11 HERO HONORED
President George Bush signed into law a bill designating the Cranbury, NJ, Post Office as the Todd Beamer Post Office Building. On Sept. 11 last year, Beamer was among a group of passengers who resisted terrorists on Flight 93, which crashed in a field in Pennsylvania. Beamer uttered the words "Let's roll" as the passengers attempted to retake control of the plane.
NEW SEMIPOSTAL THIS YEAR
The Governors of the Postal Service set a 45-cent rate for the Heroes Stamp 2001 semipostal. The stamp, intended to raise funds for victims of the Sept. 11 terrorist attacks, will be issued later this year.
The Heroes stamp will be the second semipostal issued by USPS. The first, the Breast Cancer Research semipostal, will go from 40 cents to 45 cents, also later this year. A postal appropriations bill enacted last November changed the pricing formula for semipostals.
The legislation also extended the sales period of the Breast Cancer Research stamp until Dec. 31, 2003. The Heroes semipostal is expected to remain on sale through Dec. 31, 2004. A Domestic Violence semipostal will go on sale in January 2004 and be available through Dec. 31, 2006.
UPDATED MAILROOM SECURITY VIDEO
Looking for the latest information on how to keep your mailroom safe from terrorist threats? The Postal Service has updated its mailroom security video. It's available for viewing online at www.usps.com. Go to the "Security of the Mail" section and find the video on the "Mailroom Security" page.
ARBITRATION PANEL AWARDS FOUR-YEAR CONTRACT
The neutral arbitrator of a three-member panel announced a new four-year agreement between the Postal Service and the National Rural Letter Carriers' Association. The labor union represents some 118,000 USPS employees.
The arbitration decision provides for a 5.6 percent general wage increase over four years.
USPS CYCLING TEAM HONORS
Three-time Tour de France champion Lance Armstrong was named the U.S. Olympic Committee's 2001 SportsMan of the Year. The U.S. Postal Service Pro Cycling Team also was honored as the USOC's 2001 Sports Team of the Year.
Reward rises in anthrax mailings
The reward now stands at $2.5 million for information about who mailed letters containing anthrax that killed five people, including two postal workers. The reward includes $2 million from the Postal Service and the FBI, and $500,000 from direct mailer ADVO, Inc.
The letters were sent Sept. 18 and Oct. 9 last year from Trenton, NJ. In a continuing effort to seek the public's help in the case, flyers were delivered to postal customers in the Trenton area and to adjacent communities in Bucks County, PA. Additionally, the Postal Service distributed flyers to New Jersey-area pharmaceutical companies and transportation depots serving Trenton.
The anthrax mailings "were an unprecedented attack on our nation's mail system," says Chief Postal Inspector Ken Weaver. "Although many of the initial investigative resources were concentrated in New Jersey, we continue to broaden the scope of the investigation and try different techniques, such as the flyer, to bring this to a successful conclusion."
The reward poster is available online at www.usps.com. Go to the Security of the Mail section or the Postal Inspectors webpage.

Happy Birthday from USPS.
Current U.S. stamps are available by calling 1-800-STAMP-24.

Volume 37 Number 2
Ilze Sella
Editorial Services
Frank Papandrea
Art Director
David Ostroff
Designer
Jim Fisher
Printing Specialist
John E. Potter
Postmaster General and CEO
Deborah K. Willhite
Senior Vice President,
Government Relations and Public Policy
Azeezaly S. Jaffer
Vice President, Public Affairs
and Communications
MEMO TO MAILERS
is published by U.S. Postal Service Public Affairs and Communications.
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MEMO TO MAILERS
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Spring 2002 NPF All postal, all the time
From mail security to rate case implementation to product redesign, the Spring 2002 National Postal Forum (NPF) promises to cover the gamut of issues facing the U.S. Postal Service and the mailing industry as a whole. This particular NPF, being held April 21-24 in San Diego, comes at a time when USPS and the mailing industry are facing a difficult economy and the aftermath of bioterrorism. At the same time, the Postal Service is examining options for postal transformation and exploring ways to ensure the viability of the mail into the future.
In his keynote address, Postmaster General John E. Potter plans to discuss the challenges and opportunities faced by the mailing industry and USPS, and you'll join industry and other USPS senior executives in a discussion of postal transformation. They'll talk about the incremental administrative and operational changes possible under current law, implications of moderate legislative reform and fundamental structural changes of the Postal Service.
Deputy Postmaster General John Nolan, Chief Marketing Officer Anita Bizzotto and other postal executives will discuss measures taken by USPS and the industry to keep mail safe and secure, and initiatives to increase consumer confidence. Also to be discussed are initiatives to improve mail service and security, including new information, mail entry processes and new technology to enhance the value of hard copy mail.
The Mailing Industry Task Force, led by Michael Critelli, Chairman and CEO of Pitney Bowes, and Deputy PMG Nolan, will present a status report on its eight recommendations to enhance the mail and protect the $871 billion in commerce so dependent on an effective mail channel. There also will be a "Business Builder" strategy session focusing on the task force's efforts and its recommendations aimed at responding to customer needs, making the mail channel more competitive and unifying the industry.
MAILING INDUSTRY TASK FORCE
WORK GROUPS
1. Intelligent Mail Piece
Co-chairs: Michael Critelli, Chairman and CEO, Pitney Bowes;
Charles Bravo, Senior Vice President and Chief Technology Officer, USPS;
Thomas Day, Vice President,Engineering, USPS
2. Consumer Gateway Services
Co-chairs: Dr. Jerome Swartz, Chairman and Chief
Scientist, Symbol Technologies; Nicholas Barranca, Vice
President, Product Development, USPS
3. Payment Systems and Commercial Credit Options
Co-chairs: Gary Mulloy, Chairman of the Board and
CEO, ADVO; Michelle Purton, Vice President and Treasurer, USPS
4. Preparation and Entry Optimization
Co-chairs: William Davis, Chairman, President and CEO,
R.R. Donnelley; John Rapp, Senior Vice President, Operations, USPS
5. Network Optimization
Co-chairs: William Davis, R.R. Donnelley; John Rapp, USPS
6. Pricing Strategy
Co-chairs: Gary Mulloy, ADVO; Steve Kearney, Vice President,
Pricing and Classification, USPS
7. Improve Address Quality
Co-chairs: Charles Morgan, Company Leader, Acxiom;
Charles Bravo, USPS
8. Implement Industry Council
Co-chairs: Michael Critelli, Pitney Bowes;
Michael Sherman, President, Fingerhut