Mailers' Technical Advisory Committee General Session June 13, 1996 Minutes The meeting was called to order on Thursday, June 13, 1996, by John Wargo, Mailers' Technical Advisory Committee (MTAC) Postal Chair. He welcomed members and guests and introduced Chief Operating Officer and Executive Vice President Bill Henderson to present information he had discussed at the National Postal Forum. Mr. Henderson discussed the issue of postal costs. He indicated since 1971 an increased postal volume of 106 percent, increased work hours of 21 percent, increased cost per hour of 322 percent, and increased salary and benefits of 412 percent. Costs over last year will increase approximately 6.7 percent, only 1 percent due to volume and work hour increases, indicating a need to find an alternative to arbitration to resolve labor disputes and noting that cost per hour in the Postal Service drives postage rates. He also discussed the impact of automation on increasing productivity. Mr. Henderson then addressed targeted areas in the future: (1) the indirect labor issue and the impact of automation; (2) multi-factor productivity; and (3) the challenge of controlling cost per hour. Regarding controlling cost per hour, he touched on several strategies: (1) through some agreement; (2) outsourcing some parts of the Postal Service; (3) more effective ways of adjusting to high and low volume periods of the year; (4) reduction in labor intensity and reduction in dependency on people; (5) issues such as tray management systems; (6) alternate delivery systems; and (7) improved transportation efficiency. Mr. Wargo then introduced Yvonne Reigle, MTAC Industry Chair, and Chris Rebello, MTAC Industry Vice Chair, to make some comments. Ms. Reigle mentioned the issue of classification reform and the task force meeting to look at some of the issues surrounding classification reform, and acknowledged the election of the 1997- 1998 industry vice chair, Joe Schick. She indicated that the committee would receive a mailing with key dates for subcommittee chair elections and subcommittee designations. Mr. Rebello mentioned the attempt to bring together a group to discuss the omitted three-digit level. The committee is trying to get Bob Krause from the Postal Service side to address the issues of move update and the database and NCOA and some of the problems associated. Charles Pace will be working with the committee to address fixing the problems of the periodicals side and also to set the timetable for bar coding. Regarding confusion over the fletters issue, Mr. Lubenow briefly discussed the 6 month test of the modified pointer designation. Mr. Rebello indicated that the Postal Service intends to fully educate mailers of the new rules and regulations in order to get the mail processed. Next, Mr. Wargo introduced James Grubiak, Vice President for International Business, to present an update on international mail. Mr. Grubiak discussed the strong paradigm shift in the U.S. Postal Service toward a global structure, with the key components of sales, marketing, and operations. Since coming on board in January 1995, he has been committed to enhancing the credibility of the U.S. Postal Service in the international arena, and he intends to double the business to $3 billion by the year 2000, utilizing $900 million worth of new business: (1) Global Priority Mail; (2) International Package Consignment Service, and (3) looking at the full spectrum of customers' needs. He expects an increase in delivery to the core U.S. export eight to ten countries which provide 50 percent of revenue of ten times the present business, focusing on direct marketing and the catalog business, financial and other services, and the publishing business, and partnering directly with the other posts. He indicated teams have been working with Canada and Mexico, with Brazil, Argentina, and Chile, in the UK and Germany, and with China and Japan. The implementation plan combines a set of tactics which focuses on customer requirements and target countries. Mr. Grubiak added that initiatives are well under way; they are attempting to change international airline regulations to allow them to use the airlines with the best direct delivery and lowest costs. In addition, the international mail can be flexible in obtaining cost changes in order to customize solutions. Following his presentation, Mr. Grubiak welcomed questions from the audience: (1) Regarding partnership with competing post offices, he explained that they have been negotiating fiercely with competitors and expects that competitors will find it beneficial to work in partnership rather than competing against the Postal Service international mail service. He expects to have an answer by the end of July from the UK Royal Mail. (2) Regarding remailers and consolidators, such as TNT, Mr. Grubiak expressed his belief that consolidators can offer dded advantages, and his teams are studying that issue. (3) Regarding Canada and providing seamless distribution and NAFTA, Mr. Grubiak commented that leveraging, U.S. strength, and taking the U.S. leadership forward can make changes. (4) He reiterated his objective to cut costs in order to grow business. (5) Regarding consignment services, the intention is to work with focus countries to grow the direct marketing businesses and to be in the eight countries by August or September of this year. (6) With regard to his employees doing deliveries in foreign countries, Mr. Grubiak reiterated his objective to working with postal partners to develop delivery systems, to improve partners' core competencies, in order to seamlessly cross borders, utilizing one another's core competencies to grow business. (7) He described the effort to develop strategies to compete with remailers. (8) Mr. Grubiak clarified that while early strategy is to focus on the eight to ten focus countries, there is every interest in other countries and in continuing to expand globally. (9) Herb Cantor is a local contact in the service to discuss market research in other countries. (10) With regard to one-stop shopping, Mr. Grubiak mentioned an example of one business whose international business grew from 3 percent to over 20 percent as a result of improvements, and added that other companies are duplicating that effort. (11) Regarding airline restrictions and providing airline service in the short-term, he discussed solutions such as dedicated planes and gateways. (12) He described advertising and promotion efforts through the direct market industry, efforts to better articulate available services to new customers, and better education of the benefits of Global Priority Mail. Before adjourning the meeting at 10:26 a.m., Ms. Reigle reminded members of the next meeting on September 11 and 12. MTAC Meeting (June 11-13'96) Standard Mail Subcommittee Report Focus Groups-Introduction of New Reachout Effort Dan Minnick introduced Don Landis as the first speaker in a new series of Industry Focus Group speakers. Don Landis is the industry co-chair for the Midwest and Great Lakes Areas. He explained the history of their Focus group and its meeting structure. Meetings are held in different cities and attended by 150, or more people. Usually the focus of the meetings is on educating the group on current issues. Industry and postal speakers are invited. Each meeting has a question/answer period. Questions are submitted before each meeting, or during the sessions. Evaluation forms are passed out and used to set-up a tentative agenda for the next meeting. The Focus group serves a valuable purpose since it fills a niche between Postal Customer Councils and the National Postal Forum. Dan closed by mentioning that other industry co-chairs will be invited to future MTAC meetings. ADVANCE-Report on Progress and New Services Glen Cournoyer announced a recent improvement in the ADVANCE system which integrates that system with the dropship appointment system. On June 22'96, the dropship appointment screen will include a field for the ADVANCE mailing ID. This enhancement will allow AREA monitors to know the mail arrival date. This information will assist them in investigating mail non-arrival reports. The software to transmit dropship appointment data to the Area offices will arrive in August. Initially, the system will capture event code destination entry facilities, appointment arrival dates, and the post office trailer unloading date. Aggregate delivery data from the delivery units and internal seeds captured by the Areas can be made available to MTAC. Standard Mail Return Rates-Update Bill Hoyt provided an update on the issue of an unintentional anomaly in the R95 rate case for 3C single piece rate pieces which resulted in a 65% increase, instead of an intended 14% across the board 3C increase. This anomaly caused a massive hit on the continuity mailing industry. Put in perspective, a returned 16 oz Special 4th piece costs $1.24, a 24 oz bound printed matter piece (zone 5) costs $1.66 while a 16 oz 3C piece costs $2.95. Meanwhile, many mailers have changed their return endorsement, so pieces are not returned. This change has cost the Postal Service approxi- mately $80 million dollars in lost revenue. Until recently, a separate filing with the Postal Rate Commission to correct this anomaly was not embraced by the Postal Service. This position changed on June 12 in a meeting with Mike Coughlin, where a promise was given to consider an Experimental Expedited Emergency Relief filing with the Postal Rate Commission. Non-Profit Classification Reform Status The Postal Rate Commission recently announced it has accelerated its schedule for concluding its deliberations from the end of the year to July 1. The Board of Governors should have the recom- mended decision by August and hopefully if all goes well, we should see an October implementation. A discussion then ensued on implementing two sets of rates (for profit and non-profit) and two sets of preparation standards with a final comment by Ashley Lyons that there is a lot of coordination involved in implementing a set of rates correctly and with that in mind an October date would work the best. The final rule on the non-profit filing will be published in the Federal Register. "Return to Current Resident" Service Rocky Matthews explained a revenue opportunity exists to reduce the soaring cost of processing Undeliverable-as-Addressed First and Standard Class mail by expanding the address change service (ACS) options. An attempt is underway to build an ACS optional instruction matrix (similar to the way Periodicals have ACS notification options) that would use an ACS code to trigger a service option for Standard Mail to forward the mailpiece, or redirect it back to the current address, in lieu of treating it as waste, or returning it. Redirecting the piece may require an additional fee, as yet to be determined. Software redesign initiatives will delay implementation until around July'97. Classification Reform Implementation (Open Discussion to Clarify Technical Issues) Dan Minnick reviewed a number of classification reform technical issues for possible group discussion. Of the issues tabled, the elimination of the 3-digit tray, or sack, for enhanced carrier- route mailings generated considerable discussion. It was generally agreed that this rule change significantly multiplied the number of containers needed to prepare these mailings. One example cited was a current mailing of 6,700 sacks, or 21,000 trays. Under the new rules this mailing would require 32,000 trays, many of which would be mostly empty since a tray could have as few as ten pieces. Trailer usage went from six, or seven, to twelve. Destination entry incentives would not exist due to trailers cubing out, therefore causing more mail to end up on local post office docks. This would tax postal service transportation and processing functions and possibly impact service. This rule change was generally regarded as needing attention and Dan volunteered to elevate MTAC's message to postal executive management. MTAC First-Class Mail Subcommittee Meeting Minutes June 12, 1996 1. EXFC Quarterly Update - First-Class Mail on-time performance for Quarter II showed improvement in the overnight and two-day categories compared to Quarter II of last year. On-time perfor- mance was 87% for overnight committed, 76% for two-day committed, and 71% for three-day mail. Quarter II's overnight performance represented the best winter performance ever achieved. Graphs showing Quarter II National performance and the three year trend lines are attached to the minutes. 2. First-Class Mail Market Research Report - The strategic market research program focused on information about bills, statements and payments. The research model looked at the business environ- ment, USPS business segments, customer segments, USPS business processes and indicators and the USPS business outcomes. This resulted in the development of the Business Process Model which examined the areas affecting the sender, receiver and the USPS core processes. Information for these models resulted from research provided to the USPS by a number of research sources that included PSI, Institute for the Future, Coopers and Lybrand/ Response Analysis, Mentis and Synergistics. The analytical projects were designed to understand the customer business; extend focus beyond mail and identify relevant decision-makers and influencers throughout the business process. The objectives were to support senior management strategic planning, provide data for product development and help to identify priority initiatives. The goals were to focus the Postal Service on doing the right thing for customers which will result in positive impacts on the market for the Postal Service. Some of the key findings indicated that we will see significant changes taking place by 2005. These include a decrease in the percentage of checks in the mail stream from the current level of 25% to 18% and the growth of electronic payments from 2% today to 18% by 2005. It also found that economic activity will continue to drive mail volume and that with the increase in electronic transactions, the net growth rates for mail will be about 1% for the next five years. The conclusion is that it will not be business as usual. Since the market is not a protected commodity, the Postal Service will have to go after targeted markets and must improve its core business. Along with enhancing the value of the current system, the USPS will need to develop new products and services and consider partnering for competencies. This includes the establishment of performance measures and monitoring programs by segment. Follow-up research will focus on bank lockbox and third party processors; corporate cash management; and consumers. The objectives will be to determine what is important to these segments; what will make the most difference to the USPS competitive position and what initiatives, investments and competencies will be necessary to succeed. A copy of the slides are attached to the minutes. 3. Priority Mail Advertising - The presentation focused on advertising and promotion designed to grow the package mail business with emphasis on Priority Mail usage by small and medium size business. An initial Direct Mail program was developed and sent to customers with a focus on the use of Priority Mail as a means of growing business. This was then followed with a review of six Priority Mail advertisements which promoted the product based on USPS core competencies. The first five ads are currently running and are designed to build product awareness. The sixth ad is still under development and is targeted against the travel industry. Finally, the USPS is providing mailers with interactive disks which respond to a direct mail campaign. A call to 1-800-USPS 2003 will allow any mailer to obtain the disk free of charge. The disk is Microsoft Windows and DOS compatible and gives mailers the opportunity to actually compare prices by zone with our competitors. The initial results of volume growth indicate that the advertising is quite successful. Prior to A/P 9, the growth rate was holding at 2% over same period last year. The A/P 9 results indicate a growth rate of 12.3% over same period last year. A question of service performance was then discussed. It was noted that the latest National ODIS report indicated 82% of Priority Mail is delivered within two days; 95% within three days: and virtually everything within four to five days. Work is being directed against improving this as much as possible. Returning to the two day standard Nationwide is still a high priority for the Postal Service. Addressing also was identified as a potential problem. It was noted that addresses to which UPS will deliver are not necessarily delivered to by the Postal Service if it turns out that the standard delivery address is a box number. This will be looked into by the USPS. 4. Remittance Update - The report focused on the white mail concept test designed jointly by the Postal Service, NationsBank and Wachovia. The test was run with test mail originating in Philadelphia and destining in Atlanta. It was designed to capture selected Zips at the origin; flow into the FIM sort plan: and be processed as FIM mail. The two week test was conducted in January and was not designed to be statistically projectable. All mail handled in week one was in the traditional manner and was used as the control period. In week two, NationsBank mail was handled in the traditional manner while Wachovia's was captured and included as FIM mail. Due to the small sample size, there was no clear signal as to whether there was a notable improvement in service. Tests will continue to see if there is a way to accelerate service performance for remittance white mail. The remaining issue in Remittance Mail continues to be performance measurement. Until this is resolved, it will be difficult to determine whether there is any noticeable service improvement. It was recognized that Operations, under the leadership of Gary Litwinowicz, has done excellent work to improve service perfor- mance and that there is a noticeable improvement in communications between the Postal Service and its customers. 5. Update Options - Reclassification Issue - The briefing focused on the test conducted and reported on by the Postal Service at the March meeting. At that time, five companies had provided the Postal Service with test Address files. After running the test, it was noted that on average, three to four percent had move orders on file but not in the customer file. The Postal Service had requested additional files from MTAC members to continue the test, but as of this date, none have been provided. Therefore, there has been no change in the data provided at the March meeting. The major issue that surfaced was tht of "freezing" data bases after NCOA processing. The USPS and mailers will pursue clarification of this issue. 6. Update on Global/Domestic ePOST - This item will be placed on the agenda for the September meeting. In addition to ePOST, Priority Mail Redesign was requested as a topic for the September meeting. Joan Rau Acting Chair Addressing and ZIP+4 Subcommittee Rate Markings Kathy Siviter began the meeting with a review of the change in the requirements for automation markings. With the implementation of Classification Reform, mailers who apply barcodes in the address block will not be required to add the "AUTO" rate marking to their letter sized mailings. Mailers who apply barcode in the lower right corner will be required to add the rate marking to their pieces. Members did raise questions on whether the "SNGLP" needed to be added to pieces with presort indicia which are mailed at single piece rates. These may be pieces which may "fall out" of a presort mailing for a variety of reasons. Other questions were raised about the placement of LOT sequence numbers on the mail- piece, if a mailer chooses to add them. The Postal Service has not required LOT sequence numbers to appear on mailpieces and has no preference about where the information may appear, other than where specific requirements already exist. Ancillary Service Endorsements Rocky Matthews followed with an update to the plan to revise the ancillary service endorsements. A draft of the Federal Register notice has been circulated internally. The Postal Service plans to publish the Federal Register notice this summer. Implementation will follow the comment period with plans to honor both kinds of endorsement language for a period of time, no less than 12 months. In addition, software in the Computerized Forwarding System offices has already been modified to accommodate the new instruc- tions and provide the proper service requested. Rocky added that allowing endorsements to appear in the address block would be included in the same Federal Register notice. ZIP+4 Coding at Colleges & Universities A discussion of some of the challenges faced by colleges and universities who operate in a decentralized mail production mode. Tom Roylance described his situation and referred to the SUNY study of college/university mailing operations. He explained difficulties when using endorsements to identify the source of the address so that corrections could be properly directed. One member suggested using ad plates on meters to help identify the source department. Peter Moore referred to discussions in the Technology group concerning placing encrypted data on the front of the mailpiece as a possible solution as well. Addressing Work Group Bob O'Brien reported on the meeting of the Addressing Work Group. Members reiterated the delivery service problems in areas of Emergency 911 address conversions which had been identified at the last meeting. Paul Bakshi indicated that the appropriate districts had been contacted concerning the policy on delivery. Members suggested that a Postal Bulletin article be published to restate the policy. In addition, they also suggested removing rural route box number records from the ZIP+4 product in those areas where conversions have occurred. The Postal Service agreed to produce a list of the ZIP Codes where conversion data is irretrievable. This information will be included in the AIS product Delivery Type File and will be posted on RIBBS. Members suggested integrating LOT product information into the ZIP+4 product to ensure data consistency. This and other possible changes to the ZIP+4 product will be discussed over the next meetings due to the global impact of any changes to the ZIP+4 product file structure. Mailers will be able to produce BRM with address block barcodes and permit information beginning in January of 1997. This will allow the creation of generic BRM envelopes with indicia and other required elements which can be customized as needed through elements on an insert. Bob also reported that the Automated Barcode Evaluator (ABE) is now being deployed and will be located in 255 BME offices and DMUs which enter the highest volume of barcoded letter mailings. Beginning in September 1996, ABE results will be used to accept or reject barcode rate mailings. Classification Reform Address Requirement Update Joe Lubenow reported on the work being done by the Implementation readiness Team. He indicated that carrier route mailers will have until October 1 to activate the Awithin 90 days of the date of mailing@ required carrier route code updates. Between July 1 and October 1, mailers who present carrier route mailings must have updated their carrier route codes with 90 days of the date of mailing or have updated their carrier route codes using the April quarterly product release. Mailers who have identified problems receiving Line of Travel information from their software vendors should file exception requests with their RCSC to cover the period of time before LOT processing can be added to their systems. Any pieces which can be ZIP+4 coded but LOT cannot be obtained should be placed at the beginning of each carrier route package. Suggestion - Identifying Delivery locations where Secondary Address Information is Nonessential Would Increase Volume In cases where secondary address information is missing, mailers often eliminate such pieces from the mailing. Yet, these pieces are often deliverable. Members raised questions about the locations where secondary information may not be essential to effect proper delivery. This could include small apartment buildings or buildings where the Postal Service hands over the mail to building management for delivery to the individual residents. The Postal Service indicated that small apartment buildings are already identified in the ZIP+4 database where a single "H" record type exists for the address. If more than one "H" record exists for the address, secondary information is necessary to individually isolate each delivery point. Another member added that one software package has the capability now to identify those locations. Information on addresses which are delivered by building management can be obtained by matching to either the Delivery Sequence File or the Computerized Delivery Sequence product. Both of these systems identify "drops" and the number of customers served by them. Suggestion - It Could Increase Volume to Provide a Correlation between Street Address and Delivery Address in Nondelivery Offices An issue was raised concerning mailing addresses in ZIP Codes where no delivery service exists. Peter suggested that the street information be added to the ZIP+4 file and delivery point code information be used as the PO Box number. Other suggestions included developing a computer based directory service similar to LACS, and using street address as box number. MAILERS' TECHNICAL ADVISORY COMMITTEE ENGINEERING AND TECHNOLOGY/TRANSPORTATION SUBCOMMITTEE Industry Chair-Joe Lubenow Postal Chair-Becky Brentlinger PIEX - Rick Graff: Centralized debiting is an postage payment option the USPS intends to offer to current CTAS customers. Rosemary Hamel reported that pilot testing with Deluxe Check and the American Management Association is going very well and that this new option will be available for nationwide use by mid-July. Advantages include no need for advance positioning of funds with the USPS, detailed electronic reporting similar to CTAS, and best use of funds. For more information, contact Gwen Gesswein at 202-268-2359. A new project to be pilot tested from July through October is a Postal Payment Card, a private label credit card for use only by business mailers and only for postal services. The business partner of the USPS for this is NationsBank. While the terms are not finalized, it is expected that three days after a mailing, on average, the debit would appear against the mailer's account at the bank. For more information on this attractive payment option, call Dick Curran at 202-268-2884. The Graphic Communications Association's Mail.dat specification has been published, and three major postal software vendors have incorporated the capability in their current product releases. Copies of the specification are available from GCA at 703-548-2867. Mail.dat is an extension of previous GCA standard files that have been used by industry to support mail production and distribution planning. Rosemary Hamel of USPS reported that the Direct Link pilot program, intended to show how Mail.dat can also support mailing documentation and postage payment, is on schedule for testing beginning in late July. Steven Mapp from the Direct Link team demonstrated a PC based information viewer for Mail.dat, showing different views of the data as it would be used by the mail owner, mail preparer, BMEU/DMU, and entry post office. Discussion followed on the value of such software to user communities and possible product opportunities for the USPS and private industry. Containers and Transportation - Rick Kropski Rick Kropski reported on industry needs for an electronic version of the Form 8125 used in drop shipping. Cheryl Beller and Kyle Pasternak said that the USPS is working toward this goal. Additional work group discussion covered pallet regulations, including the maximum pallet stack of three pallets, and the need to band pallet stacks. Pallet load integrity for pallets of trays is a major concern, and ideas on stabilizing pallets of trays were presented, with field studies to follow. Until these issues are resolved, some lettershops may bedload mail in trays rather than use pallets. A related concern is that presort regulations do not allow three digit carrier route trays or sacks, which can cause many five digit carrier route containers with as few as ten pieces of mail. On a separate issue, Rick reported that digest-size catalogs of 5 3/8" by 8 3/8" and similar dimensions will be allowed to be processed as automated flats, if all other requirements are met. These catalogs had been excluded from the "fletter" category of mailpieces which can be either letters or automated flats, but after a meeting with John Ward, will now be included in this category on a six month test basis. For the industry, this provides a way to avoid preparing these pieces as automated letters, requiring tabbing and traying, and instead to continue preparing them as packages on pallets, subject to the 10% limit on residual mail. Industry representatives contended these pieces were sometimes processed on flat sorters already, based on analysis of delivery patterns. The test allows a 5 3/8" length as oriented on the flat sorter as long as the piece is at least 7 1/2" in height, it was later clarified. Previously the length had to be at least 6" at this height range. After the six month test period is concluded, the Postal Service will determine whether the extension to the size range of automated flats can be continued. According to Rick Kropski, an estimated 1.7 billion pieces are potentially affected. The test pieces still must meet requirements for barcode placement and readability and flat mail machinability. The question was raised why this new option was being offered now rather than earlier, since some printers had discouraged their customers from continuing to produce the affected sizes. Part of the answer is the modification to the Model 881 flat sorters to accommodate digest size pieces, which is being installed in second half of 1996. In response to further inquiries, this test does not require prior application by mailers or filling out paperwork. Further questions may be directed to Sherl Johnson at 202-268-5185. Postage Meter Issues - The Postal Service was not able to comment at this time. Peter Moore requested an ad hoc work group on digital encryption issues related to USPS proposed two-dimensional barcoded postage indicia. Several MTAC members agreed to participate. Envelope manufacturers expressed concern about this issue. Operational Impacts of Classification Reform-Bob Sheehan, Rose Barcellona, Gary Litwinowicz - This presentation covered a number of areas as follows: Network Realignment: Bob Sheehan said that the major changes include the elimination of SDC and state/mixed states sortation, the advent of three-digit scheme sortation for automated letters, the assignment of concentration centers for standard mail residue, the updating of transfer hubs for Periodicals, new labeling lists, and the availability of the PASSPORT software for electronic ordering or self-printing of barcoded tray labels. Transportation: The main changes here include the revision of schedules to match new arrival times, and the replacement of the path from SDC to P&DC locations by a path from ADC to P&DC sites. This will result in deeper drop shipment penetration. Mail Transport Equipment: Comparing MTE availability from July 1995 to July 1996, and including equipment both in the field and in storage, Paul Seehaver cited the following statistics: MM trays up from 45 to 59 million EMM trays up from 9.5 to 15.3 million Flat trays up from 3.9 to 8.3 million Half size trays up from 15.4 to 19.8 million Pallets holding steady at 2.6 million Paul said that the Postal Service can get more equipment if needed on six weeks notice. Mailers expressed concerns about having to assemble the cardboard trays. Paul said some mailers prefer assembled trays, but on the other hand these take more space, so others prefer new unassembled trays. A mixture of both types is available, but the Postal Service cannot guarantee that mailers can always get only the type that they prefer. Processing and Distribution Center Operations: Rose Barcellona discussed the impact of receiving more trays, rather than packages and sacks. The USPS intends to eliminate the mechanized LSM equipment by 1998, since it requires 18-20 people to operate, while automated machinery uses only 2-3 people. Classification reform, according to Rose will generate 19.1 billion additional delivery point barcoded mail pieces. The corollary to this is fewer pieces needing to go through the OCR equipment. Rose discussed the advantages of three digit scheme sort, and reported that the Postal Service is also working on a five digit scheme sort. While both of these help mailers attain 150 piece minimums for rate eligibility for automated letters, the five digit scheme sort is more difficult to implement. This is because different five digit ZIP codes are processed at different facilities. If mailers use an outdated scheme, service could be impacted, much more so than would be the case with an obsolete three digit scheme. Furthermore, deployment of equipment such as new carrier sequence bar code sorters will create frequent changes in the five digit schemes. Rose presented an Equipment Deployment table showing amounts of automation equipment currently and what is expected in the next eighteen months: CURRENT FUTURE TOTAL MLOCR (multi-line OCR) 837 38 875 RBCS (remote bar coding) 47 98 145 MPBCS (bar code sorters) 1369 0 1369 AFCS (facer/cancellers) 913 42 955 FSM-881 (flat sorters) 812 0 812 FSM-1000 (new flat sorters) 0 102 102 SPBS (small parcel/bundle sorters) 187 45 232 DBCS(delivery bar code sorters) 2372 978 3350 CSBCS (small bar code sorters) 1859 1285 3144 Totals 8396 2588 10984 Bulk Mail Center Operations: Bob Sheehan discussed the effects of receiving more pallets and many more trays of mail. Studies of BMC capacity have been completed, and expansions have been planned for Philadelphia and Jacksonville, with others on the way. Air Mail Center Operations: An AMC capacity study is also under way, being carried out by Jim Cunningham. An increase in "scan where you band" capability is in process. Delivery Operations: Bob Sheehan said this area would be one of the main beneficiaries of classification reform, with increased delivery point sequencing volumes, cost reductions, and enhanced capacity for other products. Deliver America-Oscar Avant Oscar reported on the Deliver America program, which has the goals of seeking new revenue and mitigating the effects of electronic diversion of current mail. The program calls for kiosks, which are actually consumer shopping stations, to be placed in high traffic locations such as post offices, libraries, and airports. Market testing with 8-10 catalogers is being carried out in locations including Atlanta and Philadelphia from now until the end of 1996. If the program is successful, other locations, including some international placements such as in Japan, will be forthcoming. MTAC Periodicals Subcommittee JUNE 12, 1996 Charles Pace, Industry Chair Bob Kooken, Postal Chair INTRODUCTION Charles Pace opened the meeting by welcoming all participants to the MTAC Periodicals subcommittee meeting. He then introduced Glen Cournoyer, Postal Service Program Manager for ADVANCE. ADVANCE - TRACKING AND MONITORING RECENT DEVELOPMENTS INVOLVING PERIODICALS TRACKING Glen Cournoyer presented an overview of ADVANCE and said that all was going well and that the software for periodicals has been reviewed and should be deployed in time for August mailings. He also discussed Periodicals customer requirements, to qualify for participation in the Advance program. A copy of his presentation is attached. Glen stated that the ADVANCE program technical guide will be distributed through the National Customer Support Center in Memphis. For information, the toll free number for the NCSC is 1-800-238-3150. The threshold for Periodicals ADVANCE will be between 6 and 50 pieces per carrier route. Glen also said that the program will be available nationally and he will provide another update at the September MTAC meeting. Joe Schick, Quad Graphics, suggested that the requirements for Periodicals ADVANCE be published in the Postal Bulletin and Glen agreed if the Industry feels it is necessary. PERIODICALS FOCUS GROUP REPORT QUARTERLY REPORT ON PERIODICALS AND RELATED ISSUES. Tom Tully, McGraw-Hill, and National Chair for the Periodicals Focus Groups, talked about service reports received from the focus group meetings and said that service was not too bad. However, he did point out some service problems in Atlanta, South Florida, Chicago, New York and Philadelphia. Lou Bradfield, Mid-Atlantic/ Allegheny Industry Co-chair, said that the meeting held on April 16, 1996 reported a 50% decrease in complaints compared to the March meeting. Tom expressed concern over some origin and destinations which were not processing Periodicals according to the critical entry times and that one report indicated a facility holding mail as long as twelve hours before processing. Tom said that the New York Metro/Northeast and the Mid-Atlantic/Allegheny Focus Groups have put together service teams that would go out to a printer's plant to review the mail makeup and print order, to improve service. Tom urged the committee to contact the ADC's and ask how your publication will be handled after reclassification. Tom also gave a copy of the Focus Group calendar for the minutes and also encouraged the committee association members to attend. There will be a Periodicals Focus Group meeting scheduled for the National Postal Forum in Washington, DC in August. POLICY, REQUIREMENTS AND METHODS (PRM) UPDATE ON AMC PROCEDURES AND OTHER ISSUES. Dennis Farley, Fairchild Publications, reported on the PRM work- group meeting held June 11, 1996. Jim Cunningham, Manager, AMC Operations, spoke about the elements needed for a complete Air Mail Center (AMC) information guide. He also asked the industry for information such as AMC volumes, preparation and transportation costs and that the information be sent to him at USPS Headquarters, Room 7631. Joel Rosen, AMC Specialist, mentioned that the USPS was looking at putting the AMC information on the Internet as well as RIBBS. Also discussed by Joel was a list of operational issues pertaining to the handling of periodicals between air carriers, the Postal Service, and publishers. On a separate issue, Dennis Farley expressed serious concern with the deployment schedule for flat sorters which handle tabloid size publications as well as an implementation timeline for barcode rates for tabloids. Steve Feldman of American Business Press, asked that this be made a key issue (see attached). Jim Cunnigham said that he would investigate the issue for the group. Also discussed was the need to review the co-mailing requirement outlined in DMM Section E230.8.5 by the USPS to ease the requirements and allow printers of shortrun publications to co-mail. Bob Kooken agreed to present the issue to Anita Bizzotto for comment. REPORT ON THE IMPLEMENTATION RESOURCE TEAM FOR CLASSIFICATION REFORM ISSUES FOR PERIODICALS Dick Funck, Meredith Corporation, said that although periodicals classification reform has not presented as many changes as First- Class Mail or Standard class, it is becoming apparent that there are many problems. Dick talked about some requirements that were changed, such as the "AUTO" marking for automation rate letters that was dropped if the mailer prebarcoded in the address block, and the 6 month extension for utilizing material that still identifies the Periodicals as Second-Class. Dick indicated that the implementation team meets every Friday via teleconference at 9:30 A.M. EST. He spoke about the interface problems where 2 out of 3 software programs were not properly working for Periodicals. Joyce McGarvy, Crain Communications, related her difficulties interfacing with her mainframe. Monica Lundquist cautioned that even thought the product is available, publishers should not expect the software to work on all platforms. In addition, she indicated nonprofit mailers would only be getting one software program from the vendors and the choice would be to make up the mail in accordance with Classification Reform rules or to get an exception. Dick Funck said that next meeting of the Periodicals Implementation Group will be August 1, 1996 in Milwaukee following the GCA meeting. Ed Wronski, Manager of the NY Metro RCSC, clarified questions concerning mail classification reform requirements and guidelines for publishers requesting exception to the July 1, 1996 deadline. The Subcommittee has concerns about the implementation and has made this a key issue (see attached). MAIL NORTH OF THE BORDER. Charles Pace introduced Clayton Bonnell, Manager, International Operations from the USPS International Group, Rhonda Dagenais, Network Integration, Canada Post, and Mark Dandeno, Officer, Network Planning, Canada Post.. A joint presentation (copy attached) focused on the preparation and treatment of Periodicals being transferred between the postal services of the USA and Canada. Additional discussion on Canadian service standards and flats automation followed. Clayton also offered to be a point of contact for follow-up questions at 202-314-7234. Signed: _______________________________ Date:_______________ Charles L. Pace Chair KEY ISSUES - JUNE 12, 1996 MEETING MTAC PERIODICALS SUBCOMMITTEE #1 Cause of great concern - Mailings being run before and after 7/1/96 cannot use two separate sets of software (must be one or other). If a mailing is to be made on or before 6/29/96 - 6/30/96, can we use new software and new schemes while still paying old rates in order to help with software conversion? #2 We ask the Postal Service's Corporate Management to set a definitive timetable to allow tabloid-size newspapers and magazines to take advantage of the barcode discount. This also includes Periodicals over one pound. As of now, there is confusion and apprehension about the new equipment's (FSM 1000) capability to handle non-magazine periodicals that are barcoded. Set the date when we will be allowed to claim the discount. Charles Pace Chair