Minutes of the Mailers' Technical Advisory Committee December 15, 1994 Mr. John Wargo welcomed the members and introduced the Postmaster General, Marvin Runyon. Mr. Runyon began by expressing appreciation to MTAC member for facing the serious issues of the last year head on, and for offering good advice and strong support. He stated that the recent rate increase, in general supported by the governing board, was modest and would meet the financial needs of the Postal Service. He noted that the financial results of the year were positive, much better than predicted, mainly because of increased productivity and increased mail volumes. There was, he said, a cloud on the financial horizon in the form of legislation that could require prefunding retiree health benefits. He reported that the cost of the prefunding proposal could be $11.6 billion, forcing the Postal Service to immediately seek another rate increase of about 6 percent, and putting off the timing of the reclassification case. Mr. Runyon said that a group of mailers were contacting their representatives to express their opposition to this proposal. During the new year, Mr. Runyon said, the Postal Service would continue to pursue financial and service improvements. Other 1995 objectives include an effort to increase the business management flexibility of the Postal Service, including the ability to respond to competitive challenges quickly and effectively; the ability to introduce new products and seek new markets; and the ability to effectively manage postal employees, to reward those who excel and to deal properly with those who do not. In response to a question, Mr. Runyon explained that "privatization" could be defined in many ways. Some good, some bad. He said that steps to be more commercial and more competitive would be appropriate, but that a wholesale conversion to a private enterprise would not be good for the American people. On the subject of wage negotiations, Mr. Runyon said that the current negotiation process is badly broken, leaving important system-wide decisions in the hands of a third party. He said the offer the Postal Service made to the unions represented a fair, reasonable wage, and that the organization would work to hold the line on costs because there are no funds for increases. Concerning the rate increase that would result from the prefunding proposal, Mr. Runyon felt the American public would not understand or accept a "stamp tax." He said mailers have told him they intend to convey the impact on their companies, wages, jobs and so on, of such legislation to their Representatives. Mr. William Henderson, Chief Operating Officer, underlined the urgency relating to the pending legislation, and that once such a package was developed and gained momentum, it can be very difficult to redirect it. Therefore, he said, timely action is needed. On the positive side, Mr. Henderson noted that the fall season was going well, with higher volumes, and very tight observation of activities through the National Control Center. An increase in net income is anticipated, he said, although there is some concern about a decrease in volume related to the rate increase, which hopefully will be a temporary phenomenon. The flats automation process is under full steam, which demonstrates the commitment to automation in all aspects of the Postal Service. In response to questions, Mr. Henderson observed that the relationship between the Postal Service and the Postal Rate Commission had improved, but that further improvements in communications and understanding was in order. The PRC, he said, was clearly committed to the success of the Postal Service in its various projects. Concerning various suggestions related to privatization (like freeing third class from the rate process), Mr. Henderson suggested that most ideas would be discussed in various forums, but that a "pick-and-choose" approach would probably not work. Mr. Norman Lorentz, Vice President, Quality, explained that he had been with the Postal Service for five months, employed to focus on quality control systems and processes. He said he accepted the position because he could tell clearly that the Postmaster General and those in top management were absolutely committed to improving service. In addition, he said he discovered that the employees, as a whole, were similarly inclined. In the first phase of his work, Mr. Lorentz ascertained that the quality processes were in place but were inconsistent, and that data was somewhat difficult to come by, available in some areas, rarer in others. About current activities, a team is in place to develop customer- focused, internally actionable indicators which allows identity of cause and effect of specific actions. Although it is fairly easy to identify service factors, it is important to identify external factors which relate specifically to the service, and that requires management tools to achieve a consistency. Mr. Lorentz added that, although not vying for the prestigious award, the Postal Service was applying the standards of the Malcolm Balderidge Award to management as a benchmark for quality of service, focusing first on the first class mail process. During discussion, Mr. Lorentz expanded on the importance of identifying the "actionable" indicators. Responding to a comment about a public opinion poll which placed USPS at a low level of service, Mr. Lorentz reminded the members that such polls define "perception", which includes much more than just the quality of service. Nonetheless, he said, such a public perception is important as a part of the combination of factors that provide a basis for devloping a quality assurance program. Historically, a member noted, service breakdown had resulted from two causes, a real breakdown of processes and a cover-up by management of the breakdown. Mr. Lorentz agreed that both are the result of a lack of a quality assurance program that would see problems as "gems" of opportunity. If management understands that problems are opportunities rather than career risks, both can be dealt with. Asked about when service indicators from the EX2C and EX3C would be available, Mr. Lorentz said that the team involved will have a recommendation in the first calendar quarter of 1995. One important issue is sharing data with the customer but not the competition. Finally, Mr. Lorentz assured the members that senior management has promised sufficient budget to accomplish the total quality control program. Mr. Wargo recognized the service contribution of a number of departing members including David Allen (Sears Merchandise Group), Jerry Loftus (Bell and Howell). He also recognized several retiring sub-committee co-chairs, including Joan Rau (First Class), Bill Armistead (Third Class) and Sig Guthman (ABC Ad Hoc Group). He then expressed appreciation to Bill David, outgoing Industry Chair, presenting him with a clock and a caricature signed by senior members of MTAC and the Postal Service. After a brief recess, Mr. David introduced Gene Del Polito (AMMA) who commented on the pending legislation. He explained that materials had been prepared for distribution and would be immediately available. Mr. Ted Russell introduced the agenda item concerning service issues. Mr. Bob Sheehan described the actions taken to plan for the fall season rush. He noted that the BMC performance had thus far been excellent, and that the BMC annexes that were in place for the rush would remain in place for the most part. He presented a series of figures that showed that, almost across the board, volume and service efficiency numbers were up from the last year. Among them, he showed that fourth class volume was up 21 percent, third class up 9 percent, primary parcels up 5 percent, sacks up 5 percent, non-machinables up 5 percent and cross dock up 10 percent. Looking at vans, he said, the negative numbers showed the improvement in usage: vans on hand at start of operation down 31 percent, plan failures down 52 percent, vans around more than 24 hours (part of the failure issue) down 87 percent, and remarkably those there over 48 hours are almost nonexistent, down 98 percent. These numbers, Mr. Sheehan said, show a sustained improvement, especially when looked at in a line chart. The next issue to be addressed, he said, are drop ship appointments, which are currently under-used considering the advantage to both Postal Service and client. Nonetheless, the appointments are up about 50 percent. In general, "no shows" are relatively light. Finally, Mr. Sheehan said the monitoring of service would continue through the end of the year, service would be maintained including many units working through the holiday weekend, and a "post mortem" would be held immediately after the year to judge the effectiveness of the service plan. Units should cooperate with major mailers who need to meet midnight December 31 deadlines. Asked about the reasons for the dramatic improvement in service, Mr. Sheehan gave credit to senior and middle management getting behind the plan and supporting the operations at the BMC level which, given that support, delivered for the customer. Mr. Russell observed that the current service level would be used as a benchmark for future plans. He asked if the industry forecasts should be developed earlier in 1995, since that information in 1994 was valuable in the planning process. Mr. Frank Auer described the National Control Center operation. Besides the internal information systems available to it, its purpose includes listening to the customer more efficiently and to develop information and action on a cross-function basis. This serves to better inform management and customers and to "flatten" the organization with such exchange of information. Acting as an "ear" across functions adds to the validity of information gathered from many sources, and enhances rapid response to problems which may be discovered. To this end, Mr. Auer said, a Periodic Service Status Report, which asks service- related questions of clients through their account managers, is solicited on a periodic basis. The NCC can add that information to its data base for analysis, but also acts specifically on the individual needs of the respondent. Mr. Russell described a team of MTAC volunteers who offered to spend some time in USPS plants learning about the process of moving the mail and to look for bottlenecks that may prevent efficiency. Both BMC facilities and customers benefit from such visits, especially when customers witness their own products being processed. Information from such visits should be provided to the NCC and recommendations for improvements communicated through the appropriate MTAC subcommittee. Ms. Yvonne Reigle, Industry Chair, rose to recognize Joe Schick and Ted Russell for participating in the fall season planning process. She introduced Gail Sonnenberg, Vice President, Marketing Systems, who provided additional written information about the pending legislation. Ms. Sonnenberg explained that, depending on the way the legislation was written, the increase in rates could be in the area of a .35 first class stamp, a 9.4 percent increase, which would mean a second and third class increase of 22 percent. Mr. Hank Cleffi, Manager, Mailing Standards, then discussed the rate implementation set for January 1. He explained that immediately after the December 12 acceptance, under protest, by the Board of Governors, the Postal Service set in motion the processes by which the various offices around the country would have rate information to disseminate to customers. Complete information, in traditional format, should be available just before the rates increase, since relevant Postal Bulletins are scheduled to be shipped just after Christmas. He mentioned that there were rate implementation coordinators in the Areas and Districts who could assist mailers in getting rate information and mailing statements. Mr. Charles McBride, Manager, Reclassification, making the assumption that the reclassification filing will proceed in late January, expressed appreciation for the working group contributions, some of which will be handled in the filing, others in the "notice and comments" procedures. He mentioned a new working group formed to address specific proposals for the preferred rate subclasses (e.g., nonprofits). Concerning recommendations by the group, there will be a market survey for nonprofit third class, and the reclassification proposal will contain the same requirements for third class for both nonprofits and others. The working group is presently addressing preferred-rate second class. There is a staff team of pricing, costing, and volume forecasting experts preparing testimony for the reclassification filing, scheduled for late January. However, the plan calls for adopting the Commission's forecast of FY 95 cost, volumes and revenues as a starting point for forecasting results after reclassification occurs. Any changes in this approach could require extra time. Additionally, the market surveys and cost studies are incomplete and any surprises may cause delays. In response to questions, Mr. McBride said that several proposals for other mail classes would be prepared for future filings, the timing of which would be controlled somewhat by the personnel resources required for each filing. The plan for the January filing is to maintain contribution neutrality within each current subclass. Mr. Wargo gave a follow-up report on the Account Management Program. He told the members that Mr. Henderson, and the Area Vice Presidents, in response to the MTAC Ad Hoc Subcommittee recommendations, have expanded the program to more customers. In addition to the 200 National Accounts, the program will be implemented at the District level to the next largest 5,000 customers which will be designated as Premier Accounts. Mr. Wargo will continue to work with Yvonne Reigle as co-chairs of the ad hoc group in determining customer needs for further development and expansion of the program. Ms. Reigle closed the meeting by emphasizing the urgency to respond to the health benefits legislation, perhaps even with a CEO meeting to initiate face-to-face contact with legislators. She added that new issues must be submitted before Friday, February 10th, although earlier notice allows more time for preparation. MTAC First-Class Mail Subcommittee December 14, 1994 Meeting Minutes 1. Update on 1995 Stamp Status with New Rates - All of the G-Series stamp stock was stored at the Kansas City, Missouri national stamp depository until the USPS began to distribute the stock in anticipation of the current rate increase. In October, the USPS began moving the "G" stock to ten pre- positioning sites around the country and by the end of November, distribution was completed to all pre-positioning sites. Pre-positioning sites began shipping a "first wave" of "G" stock to stamp distribution offices (SDOs) in early November and by December 6, all SDOs had received "G" stock for subsequent distribution to post offices, stations and branches. SDOs completed distribution to all post offices, stations and branches making "G" stock available at all facilities as of December 12 and "G" stock was placed on sale on Tuesday, December 13. Distribution of the "second wave" of "G" stock from pre- positioning sites to SDOs was initiated on December 14 and will continue as space becomes available at SDOs to accommodate the new stock. A back up supply of "G" stock will be provided to the six Accountable Paper Depositories (APDs) to accommodate the additional needs of the SDOs. "G" stock items available at all post offices are: "G" prime rate stamps $0.32 - sheets of 100 and booklets of l0 "G" make up rate stamps - $0.03 - sheets of 100 and booklets of 20 "G" post card rate stamps - $0.20 - sheets of 100 and booklets of 18 "G" prime rate - $0.32 - coils of 100 Some "G" items will be distributed to APDs of SDOs only, to be ordered by post offices that have a need for these items. These include: "G" prime rate - ATM sheetlets of 18 (only distributed to SDOs that serve banks in the ATM program) "G" prime rate - coils of 500, 3000, 10,000 "G" First-Class Presort - coils of 500, 3000 "G" prime rate OMAS - coils of 100 A copy of the stamps is attached to the minutes. Actual rated stamps will become available in approximately ninety days. 2. Marketing Trends in Hard Copy Messaging - The discussion focused on the Correspondence and Transaction Strategic Business Plan concerning the strategy to defend against diversion of the mail. The idea is to promote the enduring value of hard copy mail. An example of the competition advertising was presented which showed AT&T's positioning of postcards which you did not have to mail. This was followed with a video showing the value and long life expectancy of the hard copy mail. The Crane stationary advertisement was also shown which is an example of the value of personal letters. The Postal Service is scheduled to begin promotion of hard copy communications by focusing on the value of paper, group events and literacy. Ads will promote the value of mail in conjunction with electronic communications. 3. Update on Service Performance - Quarter IV data (May to September, 1994) was presented and indicated a notable improvement. The results indicated the following: Service Standard % on-time % one Day Late Tail of Mail Over Night 82.6 10.4 7.0 Two Day 74.4 14.6 11.8 Three Day 78.6 11.8 9.6 For 1994 in total, the on time performance was 8l.9%-Over night: 72.5%-Two Day; and 75.1%. Three Day Customer Satisfaction Index indicated that 85% of the responses for 1994 indicated that the customers rated service Excellent, Very good or good. This compares to 89% rating in 1993. The fair to poor service rating for 1994 was 15% as compared to 11% for 1993. 4. Direction and Priorities of Operation Design - The general update emphasized the importance of integration within the Postal Service and the important role played by customer involvement. The critical questions which are asked are how the programs effect the customer at the beginning and the end. Currently the redesign group is looking at BRMAS and CRM/Remittance systems. Focus groups have been conducted with remittance mailers and will be conducted within the organization to look for commonalties in operations and services we provide. The key element is that the redesign group structure is now in place and can begin working with product management to support such programs as electronic manifesting. The Redesign Group would like to participate in the March MTAC meeting to discuss more significant actions that will have taken place. 5. Update from November 21 Remittance Meeting - The discussion focused on the background of the meeting and the seven expectations remittance mailers have of the Postal Service. It also focused on the five action items which were identified at the November meeting. All this information is attached to the minutes. The significant outcome of the MTAC discussion was to identify the industry leader and small working committee willing to work with Postal Operations managers to immediately begin to address the issues of remittance mailers. The industry leader will be Mury Salls, Chairman of the First-Class Mail Subcommittee. His address and telephone numbers are: Mury Salls International Billing Services 5220 Robert J. Mathews Parkway El Dorado Hills, CA 95762-5712 Telephone (916) 939-4896 Fax (916) 939-4777 The Postal Service was asked to identify an Operations Senior Manager who would champion this effort. A recommendation was Vice President of Operations. The Postal Service Operations person who will work with the customers and the field will be: Tony Bonanno Field Intervention Team 425 L'Enfant Plaza SW U. S. Postal Service Washington, DC 20260-2405 Telephone (202) 268-4219 Fax (202) 268-4555 The Postal Service MTAC First-Class Mail Coordinator will work with Tony Bonanno and Mury Salls in support of the meetings and working group. He is: Al Kellert Sales 475 L'Enfant Plaza SW Room 5540 U. S. Postal Service Washington, DC 20260-2400 Telephone (202) 268-2259 Fax (202) 268-5193 Members of the industry working group will be contacted by Mury Salls to set up the initial working meeting with the Postal Service. Yvonne Reigle Acting Chair MTAC SECOND-CLASS SUBCOMMITTEE December 14, 1994 Charles Pace, Chairman John Dorsey, USPS Coordinator Introduction Charles Pace opened the meeting by welcoming new attendees. Overview of Outbound International Mail David Alvino, USPS International/Military Mail Operations, opened his presentation with a list of destinations from each outbound Postal processing plant and the frequency and transit times of international shipments from each (handout attached). About 75 percent of international shipments depart from the New Jersey International Bulk and Foreign Mail Center and 25 percent from Oakland/San Francisco. He also provided a list showing the exchange offices that handle each country. Some countries are reached through the transit services of other countries, for example, Albania is shipped via Greece. David commented that the T-4 Handbook which shows the labeling lists is currently out of date and will be updated soon. The transportation is contracted on a container service basis. Responding to questions, David explained that the transit times are based on the contracted service. The transit time is from the outbound pier to the port of the destination country. Publishers who have problems with shipments to foreign countries can telephone David Alvino on (202) 268-6033. Publications sent to APOs/FPOs That No Longer Exist John Dorsey introduced the problem the Postal Service is having with large volumes of publications being sent to APOs/FPOs that no longer exist. Postal Operations in New Jersey are processing about 20,000 pieces of undeliverable 2C and 3C, requiring ten people per day to handle. They do a lookup of the publisher and address to return 2-C magazines (30 percent) to publishers with irregularity reports. About 70 percent of the volume is 3-C catalogs, which are thrown away if they do not have address change endorsements. John suggested that we may have to consider making the optional address matching for the APO/FPO portions of lists mandatory to cleanup the problem. At a minimum, we need widespread communication of the problem throughout the publishing and advertising mail related associations. Major Robert Deese and Master Chief Steven Byington, Military Postal Service Administration -- Pentagon, shared all the efforts of the past two years to move the military addressing into a standardized address structure in order to take advantage of automation. They have assigned a simpler unit number for military addresses, getting rid of the old Division, Brigade, Battalion, etc., style of addresses. They are entering these new unit number addresses directly into the postal AMS directory file. They are assigning carrier routes for each group of 400-500 boxes. They have also set up NCOA operations in Germany, Korea and Spain to handle address changes more expeditiously. For more information on military addresses, Master Chief Steven Byington can be telephoned at (703) 325- 9505 or 9408. Supplements and Enclosures Moving Toward Final Rule Jerry Lease, USPS Business Mail Entry, reported that about 27 responses were received in connection with the September closing of the Federal Register notice on supplements and enclosures. In about two weeks a final rule will be published in the Federal Register with a possible February 1, 1995 effective date. Publishers were advised not to plan anything new in issues around that date as internal Postal reviews could cause shifts in the effective date. Alixe, Johnson, USPS Business Mail Entry, described highlights of the final rule to be announced. The 25 percent rule has been retained as in the current supplement/enclosure requirements. The new rule also includes clearer language regarding "Supplement To..." being required on supplements outside of newspapers in a wrapper. Alixe also highlighted the addition of a USPS number as well as an ISSN or ISBN number to the list of criteria for non eligibility for 2-C rates. Sheets making use of "novel" devices (batteries) producing lights or music are added to exclusions, while other fasteners such as grommets, rubber bands, etc., will be allowed by the new rules. Use of products and product samples have been relaxed some with respect to when an item is a printed sheet. There is also a section that mentions that issues may include annual reports and directories, in addition to buyer's guides. The final rule will be written in the same format as the proposed rule. Review and Verification of Circulation Ed Wronski, USPS RCSC - New York, described that the Postal Service has attempted to separate the eligibility portion of verifications from the postage or revenue part. The proposed rule will set a number of records that have to be checked and once eligibility has been reached the review can stop. The new process has been tested in the New York areas and reviewed by management. One last level of internal reviews are due and then training of postal personnel will be conducted on the Postal Satellite Training Network. In response to questions, it was announced that four organizations will be authorized by the USPS to do audits. The ABC, BPA and, VAC and CAC, two new organizations will be published in a Postal Bulletin as soon as the two new organizations have had final clearances. A question was asked regarding the retention of publisher records. DMM E216.1.3 states that the publisher must keep records for each issue of a publication for 3 years from its issue date, except for records for any year for which postal verification is performed by a USPS-authorized audit bureau. A publisher whose records are verified by an authorized audit bureau is not required to keep source records of requests and subscriptions longer than required by the audit bureau. Policy, Requirements and Methods (PRM) Group Report Bill Strong, Crain Communications, reported on the Tuesday, December 13 meeting of the PRM Group, a work group of smaller circulation publishers and short-run printers. Bill reported that the members of the group are very dedicated to making change as demonstrated by the fact that many travel to PRM meetings even though they cannot stay for the following MTAC meetings. The biggest break-through for the group is their representation of work by the Postal Service to propose new rules that will simplify the documentation requirements for copalletizing. This has been a significant barrier to short-run printers being able to offer their publisher clients the option to place packages of multiple titles on the same pallet. USPS is going to draft a rule change for this revision to replace existing documentation requirements for copalletizing. This can be expected to occur in the January time frame. Bill also mentioned that the PRM Group has advocated new pallet rules that may include the option for 250 pound minimum weight pallets to the 3 digit and maybe even SCF levels. Bill shared some ideas that came from the meeting including, the use of Sitma equipment that can be configured to do combining of publications into packages at a more affordable investment than some of the larger scale combining equipment. Bill reminded that the group remains committed to finding ways to take costs out of the 2C system and improve service in the process. Second-Class Service Issues Jim Cunningham, USPS Operations Support, introduced himself as a person who has worked closely with and learned 2C operations from Joe Kaczka in New York and Harry Stanley, (retired). Jim is a team leader in the Distribution Networks areas of Operations which involves labeling, mail make-up, drop shipping, and policy on facility sorting. Jim suggested that he can serve the group in several ways. He could look at data provided on service trends -- no data received to date. He can also share information on the operating status of USPS and use the Control Center to spot problem areas. Jim described that, as is typical of this season, there is delayed mail in the system but the trend since last spring is one of improvement. He would prefer to take a systemic approach to problem solving which usually has lasting results, rather than the Band-Aid approach. It was suggested that Jim and a few publishers get together to decide what would be the most useful format for publishers to submit data. Jim agreed to this step to make future service data sharing more actionable and suggested other postal organizations related to service issues could be brought into the process. Computer Model Demonstration Peter Moore, representing PIA, demonstrated a computer model that allows evaluation of alternative rate scenarios for publications with different sort levels circulation sizes, weight, advertising content and other rate determining factors. He suggested that this would be a useful tool for evaluating the best rate outcome for publications in response to the proposed reclassifications for a Publications Service. It was observed that, for example, circulation size alone, may not always be a reliable determinant for eligibility or rate advantage from reclassification rates viewpoint. Status -- CD-ROM/Diskette Eligibility for 2-C John Dorsey reported that, following much analysis of the issue, the Postal Service has decided not to seek reclassifications actions to allow second-class eligibility of CD-ROM and diskette based publications. The impact on second-class overhead could be significant to provide for verifications of content with equipment and systems in hundreds of acceptance units. The USPS will continue to work toward favorable service and price combinations to assure competitive delivery of these products in other classifications. Update on Publications Watch Redesign/Testing Jim Strong reported that the testing of the new Publications Watch concept (PRESS) would begin in January and continue for a 60 day period. Twenty publisher representatives have received training and will participate in the test. Several weeks delay have resulted from software development. Testing is expected to begin in about 2 weeks. Once the testing is complete, the Postal Service will decide on the final implementation. Final plans will depend on test results. Charles L. Pace Chairman Third Class Subcommittee Meeting December 13, 1994 Industry Chair: Daniel J. Minnick USPS Coordinator: Jean Li Rogers Drop Shipment Appointment System Joel Rosen, Processing and Distribution Policy and Programs, described the implementation and enhancements of DSAS since the last MTAC meeting. The testing with postal users and mailers began in October. There are now over 150 mailers who make appointments electronically. Mailers may also continue to make appointments by phone. The USPS contact will integrate that information into DSAS. General DSAS appointment features include, on-line entry, batch entry, delivery acceptance feedback, available slots customized by local facilities within national parameters, four types of appointment category (pallet, sack, bedload, express), one- time entry of standing appointments and the integration of PIP (perishable products) loads into the system. These enhancements resulted in improved response time, fewer phone calls, expanded opportunity for making appointments, improved adherence to schedules and established procedures to notifying the USPS of late-arriving mail. The Plant Verified Drop Shipment Program also established procedures for constructive response for those chronically misusing the appointment scheduling system, no shows, late arrival, unscheduled arrival or frequent cancellations. Tracking of these exceptions to good performance may lead to suspension of electronic access, in specific cases (see attached), to prevent the loss of the system's benefits for the industry and the USPS. Electronic scheduling will continue to be prohibited within 24 hours prior to the intended arrival. However, this is being revised. In the interim, local units have discretion on these "same day" appointments. The MTAC members thanked Joel, and his group, for quickly developing this promising tool in response to the industry's interest. Mailing Facilities Liability upon Client's Default of Postal Payment Lee Epstein pointed out the inconsistency of the USPS' policy regarding mailing agent's (printers, lettershops) postage liability. The policy states the mailing agents are not held liable; however, the next paragraph in the DMM state the USPS has the right to review and, if appropriate, hold the mailing agent liable for the defaulted amount. At the very least, the industry would like a clarification that if the mail owner's permit is used, then the mailing agent it not liable. Dan Minnick and Lee Epstein will pursue a resolution prior to the next MTAC meeting. Carrier Route Minimum for Destination Entry Mailings Mail preparers are encountering an aggravating, and yet postage insignificant problem created by the segmentation incorporated into mailings by Destination Entry. Cheryl Beller described the problem of rate determination when there are inconsistent definitions of what constitutes a mailing. Within the DMM, ":mailing" is a pivotal criteria for many determinations. Cheryl indicated that the toughest obstacle, however, was the circumstance of carrier route minimums having been defined in the Domestic Mail Classification Schedule, not the DMM as are virtually all other presort criteria. Therefore, this issue would be more appropriately handled as part of a package of Reclassification changes to the DMCS. MTAC members said that this seemed a deferral of the issue. Industry members also noted that the resolution of this issue would benefit both the Postal Service and the industry. Lastly, the new and larger destination entry discounts will create additional segmentation, thereby increasing the frequency of occurrence. Names were collected of those who will help pursue this issue. Update eon DARS Program - SWAT - ADVANCE Chris Rebello provided the context for the discussion by summarizing his concerns and problems encountered with the Delivery Activity Reporting System. Michele Denny answered Chris' concerns with an announcement of a newly developed program. Referring to an article in Memo to Mailers, she described the Southwest Area Tracking (SWAT) program. SWAT's success has led to the development of a new national program, to be renamed ADVANCE, to eventually replace DARS. ADVANCE - Notification and Monitoring System The mail owner provides an image of the piece and specific quantity information to the National Customer Service Center (NCSC) in Memphis. In turn, appropriate subsets of this information are passed along to approximately 7,000 delivery units via electronic mail. Then each delivery unit will provide: receipt date, delivery begin and end dates and delivery performance summary per five digit. A consolidation of the specifics will also provide a summary including early, on-time and late elements. The pilot test, to be done in the Southwest Area, is scheduled for completion by January 1st and is currently limited to 3C mail with requested in-home delivery dates. ADVANCE will bring awareness to the service, improve communication with customers, improve communications with the USPS and improve the delivery process. The first step is bringing all 7,000 units up to speed with electronic mail. Then to roll-out the program to the other nine areas. The target date for this Phase I roll-out is March '95. Those interested in participating in he program may contact the NCSC in Memphis at 800-458-3181. Anomalies in Labeling Lists Dan Minnick highlighted inconsistencies that occur within the published DMM labeling lists. Jim Cunningham had already discussed, in a prior MTAC session, how the USPS' new distribution network strategy will resolve these anomalies prior to distribution of the exhibits. Updates to follows. MTAC MINUTES FOURTH-CLASS SUBCOMMITTEE DECEMBER 14, 1994 Ed Meszaros, Industry Chair Tom Higgins, USPS Coordinator Ed Meszaros opened the meeting at 11:20 AM. He began by introducing Stephanie Tolson who was to provide an update on the Shipper Paid Forwarding effort. Stef announced that the new rules governing this product enhancement would be published in the Federal Register during January of 1995 and they would go into effect in March of 1995. Ms. Tolson then introduced Rocky Mathews who gave a presentation on the new rules as they relate the current Address Change Service (copy of handout attached). Jeff Spotts was then introduced and he gave a presentation on the necessary label format and Keyline information. This presentation included a description of 11 alpha codes to describe the class of mail being sent Several members of the audience expressed a concern over the need for that many codes and suggested it be reduced to 4 or 5. That suggestion is being reviewed. A concern was also expressed regarding what information would be provided to USPS field employees about the contents of the ACS Keyline. Only the Central Markup Unit employees would be provided information about the contents of the Keyline. Customers would receive the bills for this service on a frequency they determine, right now that would be every week or 2 weeks, soon a monthly option will be available. Mr. Spotts informed the subcommittee that a Tax Payer ID number would be necessary when applying for this service and those already participating in ACS will asked to provide that information in the near future. Ed then introduced Tom Higgins. Tom began his presentations with an analysis of the impact of the recent rate case as it affected the Destination Bulk Mail Center (DBMC) rate. He then gave an update on the External Fourth-Class Measurement system telling the group that Parcels, Product Management had sent a letter the Consumer Advocate agreeing to be a sponsor for the service. Information about the status of the test from Mary Jane Crain was given the group. All bounce back cards have been received and the last of the data input operation is occurring. Tom announced the successful creation of the Security Notice (introduced at the last MTAC meeting) with the publication of rules in the November 10, 1994 Postal Bulletin. Mr. Higgins then asked for customers to provide feedback regarding two product enhancements being considered. The first, Delivery confirmation, involves the need to develop a unique identifier for any packages using this service. Tom presented three possibilities, color coding, a unique Keyline, or the inclusion of the phrase "Delivery confirmation" in human readable font placed near the Tracking and Tracing Barcode. Tom asked that any comments or ideas be sent to him within 30 days. The second new enhancement is the inclusion of the recipient's day time phone number be included as part of the address block. The purpose would be to provide the USPS with a phone number to call if the package is undeliverable. Both of these ideas will be pursued. The meeting adjourned at 12:45 PM. Ed Meszaros Fourth-Class Co-Chair ADDRESSING AND ZIP+4 Addressing Federal Register Notice Peter Moore opened the meeting with a recap of the events surrounding the Federal Register notice of June 17. He explained that an additional meeting had been scheduled for October which allowed the industry another opportunity to comment on the proposals. Approximately 60 people attended the meeting which provided an open forum for discussion of the issues. Hank Cleffi reaffirmed that the Postal Service did not intend to implement any of the proposals without input from the industry and indicated that several issues are being explored jointly. Final disposition of this proposal was delayed due to preparations for the rate case, but a recession of the proposal should be published shortly. The original problem had arisen as a consequence of the proposals being published without having been previously discussed with MTAC. Had this been done, much time and expense could have been saved. Hank agreed that all effort would be made to ensure that this does not happen in the future. The membership commended Gail Sonnenberg and her people, in particular Hank and Leo Raymond, for their response to mailers' concerns, and their willingness to discuss this in an open forum. CASS Certification Cycle Michael Murphy explained that the CASS certification cycle has now been extended to one year. Notice of this change appeared in the December 8 Postal Bulletin. Stage 1 test files are now available for the cycle which will begin July 15, 1995. Stage 2 test files will be available in mid January. Michael also said the Postal Service will be canvassing the industry to determine the number of MASS test decks which will be required in the upcoming test cycle. Address Matching Guidelines A subcommittee of the Partnership for Tomorrow group has been developing a guide to long term improvement in address matching processes. The document is designed to serve as a guide to software developers and users, both of whom are represented in the group. The guide will present a number of address "problems" and the correct answers when using Postal Service national address files (ZIP+4 and City State). The guide will also provide information on how far to search within the files to locate the correct answers. The guide is intended to be a dynamic, growing document which will continue to be developed jointly and will serve as a platform upon which tools could be built to improve matching. Gene del Polito asked if the use of the Delivery Point ZIP Code could be used to help improve addresses which are incomplete. Michael indicated that in use with other elements the Delivery Point ZIP Code could help improve the matching process. Flaw in December AIS Products Michael also announced a data flaw discovered in the December AIS transaction products. Notice has been given to all subscribers of the flaw which impacts a few carrier routes. The January product will contain the corrections and the two files should be processed sequentially once the January product has been received. RIBBS The USPS is about to institute charges for the use of the Rapid Information Bulletin Board System (RIBBS). MTAC members who are actively using RIBBS were urged to take advantage of the opportunity to assist by answering questions. It was also requested that more Headquarters offices be represented, including the RSCSs. Gene del Polito proposed that a questionnaire be sent to all MTAC members asking about the barriers to using RIBBS they may have so that solutions might be developed. DARS Program Changing to ADVANCE Delivery Activity Report (DARS) is being replaced with ADVANCE. Mailers currently using DARS will be served until the middle of January when the new system goes on line. A full presentation on ADVANCE was included in a later session. Correct Address Notification The chairman asked if the Postal Service had received any feedback from the industry on the impact of Correct Address Notification (CAN) mailings. He asked that mailers review address change activity for the ZIP Codes which have had notification pieces delivered. One member suggest mailing a notice to their customers explaining the use of the standardized address, reinforcing the Postal Service message. Gene del Polito asked that correct addressing be built into the Sales and Marketing plan. Another member suggested that mailer using detached cards use that space to reinforce the addressing message. Still another cited the personalized approach where the individual carrier sends a message to the customer identifying pieces which are improperly addressed and requests assistance in notifying the correspondent of the correct information. Michael's final comment reaffirmed the release of CDS products in the AMS II format. Proposed Changes to the National Distribution Network Bob Sheehan and Jim Cunningham presented information on proposed changes to the National Distribution Network. Bob indicated that the proposal is in the process of getting the final approvals from field managers. The changes, which have impact on internal Postal Operations and labeling done by industry, focus primarily on letter size mail. Some of the changes include changing the prefixes on labels to more accurately identify the plant location desired, such as labeling more mail to ADCs and AADCs to consolidate processing of automated mail to the same operation and scheme; changing the label of automated "residue" to 60 concentration sites, ensuring that "uncoded" processing centers are REC/RES sites; eliminating AADC defaults in some smaller processing centers; developing a list of special firm holdouts to be finalized on the first pass at the origin site; and ensuring that all FCM letters are placed in trays. Work is also underway to begin the next generation of scheme management tools which will use density analysis to optimize the need for finalization at the origin site. They are also looking forward to an opportunity to have an electronic interface with customers so that flexible schemes could be developed to more closely match the incoming volumes. Members raised several issues for inclusion in the review for other processing categories. A copy of the presentation is attached. Address Quality (ABC Letter Mail Subcommittee) Report Bob O'Brien reviewed the discussion at the ABC meeting. He reported that AEC performance is near 70% resolution in Step 1. He urged all mailers to take advantage of AEC processing, citing the proposals to reclassification as a reason. He also indicated that there may be outsourcing of the AEC processing to the vendor community. The USPS has not been satisfied with the performance/acceptance of Step 2 of AEC, entailing carrier correction of otherwise uncodable addresses. Under consideration are a number of alternatives, including contracting out to commercial vendors. Discussion about the volume of ACS hard copy followed. Bob cited that there may be legitimate reasons, due to DMM regulations which require hard copy notices to be returned. A copy of the matrix is attached. Michael Murphy is to develop a procedure or methodology to report ZIP Codes where high concentrations of hard copies are returned. Peter urged mailers to spend the resources to collect the data for analysis by the Postal Service and possible corrective action. A list of ZIP Codes where ACS service is not provided is available to ACS participants on RIBBS. The need to further educate USPS employees on proper handling was cited, particularly on "Nixie" notices which have a higher proportion of hard copy returns. Mailers' Technical Advisory Committee Engineering & Technology/Transportation Subcommittee Wednesday, December 14, 1994 Industry Chair: Joe Lubenow USPS Coordinator: Bob Cundiff Postal/Industry Electronic Exchange (PIEX) - Rick Graff Rick started his presentation by advising that there is currently no USPS corporate sponsorship for the program. Mailing System Development is currently being reorganized. The industry participants on this group are seeking a new sponsor within Headquarters who is willing to discuss the future requirements. The PIEX group met on December 13 and the new System Certification Program (SCP) was the item of discussion. The USPS filed a Federal Register Notice on November 29. Comments on the notice are due by January 30. The original program had three stages of certification: postage payment, mailing operations, and electronic information exchange. The new program calls for a full-plant certification without any stages. The new program is voluntary and no longer tied into reclassification or rate eligibility. The new proposed SCP has six parts, four required and two optional, as follows: Required Elements 1) Mail Production Quality - CASS certified address matching on all lists owned/controlled by mailer - Use of a Postal Service address correction service - Must use USPS certified equipment to produce Postnet barcodes 2) Presort System Quality - Presort documentation meeting USPS standards - PAVE certified software, where applicable 3) Postage Payment Quality - Entire operation must be certified and verifiable 4) Mail Presentation Quality - Controls for staging, loading, and dispatch Optional Elements 1) Address Information Quality - CASS certified address matching on all lists, including supplied lists - Complete and standardized output 2) Mailpiece Quality Control Specialist (MPQC) Program - MPQC specialists must be trained and utilized Mailers who qualify under the SCP program will benefit from simplified acceptance procedures and from expedited induction of mailings, but do not receive rate incentives. In yesterday's meeting, the USPS was advised that by not tying SCP into reclassification or providing some other rate incentive, there may be insufficient motivation for widespread mailer participation. Rick closed by suggesting that industry respond to the Federal Register Notice and provide comments. Containers/Integrated Mail Handling System - Bob Lindsay Bob provided an update on IMHS from the ABC Containers/Transportation Focus Group which had received a presentation from Robert Brooks, USPS project manager. IMHS is moving forward with an improved budget for new automated equipment such as forklifts, pallet jacks, intra- postal containers, etc. This equipment is in addition to the MTE equipment managed by Paul Seehaver's group. Cross docking will be expanded to at least 10 BMCs and perhaps more. Bob then discussed the strategic issues he felt were raised by Bob Brooks' report. There is concern that sacks may not disappear even though the stated goal of IMHS is to eliminate sacks. Further, it is not clear whether the expansion in cross-docking through IMHS will be supported by the new palletization rules. New pallet preparation requirements are not yet resolved with respect to minimum weights and optional or mandatory levels. Bob also reported on the Drop Ship Appointment System. He reported that industry response was very favorable and felt that it was a major step in putting the USPS on the information highway. Bob urged all attendees to take advantage of the benefits provided by this system. Improvements needed are improved response, simpler log-on procedures, and more user-friendly screens. Parcel Issues - Phil Parizino Phil provided an update from the ABC Parcel Focus Group meeting conducted on December 13. The parcel group briefly discussed a prototype barcode reader being tested by Win Zimmerman at Swiss Colony that will read barcodes through polywrap and provide a second barcode on the outer wrap. The small bundle and parcel sorter is being tested in Portland and will provide the advantages of being able to read both a two-dimensional barcode and a Postnet barcode as a result of using a video camera instead of a laser scanner. More information on the test will be available at the next meeting in March. The USPS has contracted with 3M to look into improved types of polywrap. Tracing and tracking tests are almost completed with four companies in the Greensboro BMC. Each company will have specific barcodes and configuration requirements. The four companies are CTC, Neodata, Fingerhut, and Deluxe Corp. ABC Update/Barcoding Polybagged Flats - Dick Funck Dick provided an update on the ABC Flats Focus Group meeting of December 13. He stated that a long standing topic for MTAC and the ABC Group was the acceptance of polywrap pieces as machinable and thus automatable. Many parties have been involved in the issue, particularly Norm Scharpf and the USPS Engineering Group, but have not been able to make sufficient progress. There appear to be polywrapped items being processed on USPS flat sorters without any difficulty, but no one can define what are the necessary preconditions for success. Dick showed an example of two unbound pieces, weighing about an ounce, that were tested in Seattle, Denver, and Jacksonville. For some unexplained reasons, the tests in Denver and Jacksonville were successful, but this was not the case in Seattle. The tests were ruled inconclusive by the USPS. A decision was then made to retest using different mailpiece types. The pieces tested were a seven and a thirteen ounce piece wrapped two ways. The traditional way uses a vertical seam going up and down the center of the mailpiece. The USPS processing operators shake the piece down so that the item is tight at the bottom and is placed on the sorter with about a one inch overhang at the top. The USPS Engineers have stated that the overhang needed to be less than a quarter of an inch to be acceptable, which is not efficient in production for thicker pieces. The mail pieces were redesigned to have the overhang on the sides, which was accomplished by turning the machines around 90 degrees. This was more successful. The poly on these samples was of a type called cast poly as opposed to blown poly, and was of medium density. It was determined that the medium density poly worked best in sliding off the sorter into the bins. Low density poly currently being used by the industry does not seem to work as well. One and a half mil and one and a quarter mil poly thicknesses were used in the test. Putting the bound edge forward was required in processing on the flat sorter. The USPS has agreed to more testing beginning January 12. The Postal Service is working on a new flat sorter, US1000, which will process polywrapped mail pieces, tabloids, newspapers and pieces weighing over a pound. Currently, the USPS is evaluating the possibility of including a barcode reader on this new flat sorter. The industry feels that this additional step is critical for the flats barcode program and for reclassification, particularly for third class where mailers will be faced with a higher rate if they don't automate. Next, Dick provided a briefing on the USPS Corporate Automation Plan as presented to the ABC Group by Mitch Gordon. By 1999, the USPS hopes to save $4 billion through automation. Currently, 46.2% of letter mail is not barcoded. The plan discussed letter mail automation and not flats or parcels, though the USPS does plan to develop a flats automation strategy. Several MTAC members would like to see more specific goals and timelines in the Automation Plan. The Sales group presented their priorities to the ABC Group. Regardless of what is and is not included in the Corporate Automation Plan, reclassification will be emphasizing automation and barcoding and should be a priority for sales. Joe Lubenow then spoke about the upcoming reclassification and the anticipated shift to a predominantly automated letter mail process (Prebarcoding/OCRs/Remote) from the current situation with half going through an automated process and the remainder being mostly carrier routed. One task of this committee will be to discuss what measures we can take to prepare for that shift. Drop Ship Appointment System - Joel Rosen A question was raised about the sign-on procedures and it was noted that the USPS is looking at some new products that may simplify the sign-on requirements. Currently, the mailer is entering information after signing on and the USPS is looking to batch some information together before a sign-on is initiated. A comment was made about response being affected by type of the equipment and the speed of the modem. Joel stated that the response time will be improved and the issue will be discussed in the Drop Ship Ad Hoc committee meeting. Another comment was that there are currently about 150 users on the system and there is a concern if usage increases, there might be some system problems. The response was that there was sufficient resources on the mainframe to handle any increases. Transportation Information Management Evaluation System (TIMES) - Jim Nawrot Jim Nawrot was unable to attend due to conflicting commitments and an overview handout was made available. Glassine Windows on Envelopes - Len Read/Bob Muma Len Read discussed the importance of automation and the ability to determine the correct delivery point or read the correct delivery point barcode. It is easier for the USPS to read a barcode than an address. Things that affect readability include the quality of the insert and the clarity of the window film, including haze, that is, optical clarity; scuff marks and wrinkles or distortions. Glare is also a problem when light is reflected back. Len provided a demonstration of how readability varies with different window envelope types and how glassine windows can affect the readability. If there is a gap between the window and the insert, the piece becomes less readable. Research at the USPS Engineering Group looked at some of the characteristics of the window materials. Plastic and glassine were looked at, but the USPS is not endorsing any product. The engineering group looked at film clarity, gloss, effect on print quality, and environmental stability, and ran some operational tests. As the haze increased, the address quality dropped. Research recommends about a 70% maximum correlated haze as measured by a standard industry technique, American Society Testing Materials D1003. Bob Muma discussed concerns of manufacturers regarding glassine. Environmental concerns have forced manufacturers to use glassine over other types as a window patch material. Depending on the print quality of the address, barcode and the basis weight of the glassine, there have been some problems with glassine automation compatibility. Automation compatibility standards for a window envelope covering material focuses on a measurement that combines the window material transparency and the print quality of the address or the barcode as it appears behind it. The DMM standards for letter size mail, in automation rate mailings, are that addresses viewed through a glassine window must provide a print contrast ratio (PCR) of at least 45%, and a barcode viewed through the material must provide a print reflectance difference (PRD) of at least 30%. Glassine manufacturers were concerned about the lack of a criteria for acceptance during the manufacture. The test provided a value of no greater than 70% for correlated haze. Glassine is manufactured mostly in two basis weights, 22 pounds and 25 pounds. Manufacturers state that it is difficult to stay below the 70% ceiling on 25 pound glassine. To meet compliance, the cost of the glassine would increase 25-30%. They suggest 22 pound as a potential alternative, but envelope manufacturers are having problems running the 22 pound glassine with web breaks, low productivity and rippling of the film Glassine is a paper product, affected by humidity and more so with the lighter weights. Glassine manufacturers support the 70% ceiling as a recommendation, but not as part of the DMM requirements. It's important to allow use of the 25 pound glassine which may exceed the 70% ceiling for advertising mail with larger windows and for reducing costs. Closing Comments Joe Lubenow reported some information on the Reply Card Scanning Project from Bob O'Brien's ABC Letter Mail Focus group. Companies involved in the test are Fingerhut, Neodata and Rodale. Testing is going well. The reply card is being scanned at the origin facility and is digitized, if possible. The USPS feels that digitizing adds value to this process and reduces transmission costs. The results are sent to a regional electronic mailbox and are forwarded to a third party such as a fulfillment warehouse where action can be taken without the originating company being involved. The destiny of the hardcopy is an issue at this time. The goals are to save time and to reduce costs for customers. There is a PRC filing possible, once the market research is completed. The market research will include some potential prices for this service. Enhanced services might be available such as address correction. Lyn Seidler of USPS provided the report to the ABC Group. The Remote Barcode System, as presented to the ABC Letter Mail Focus Group by Mary Portko, is now a 50/50 proposition between USPS and outside contractors. The original plan was for contractors to do all the work, but the job was given back to the USPS craft employees. There are currently about 45 sites and about October of 1996, there will be 143 sites. In phase three, 268 sites are projected to cover the majority of the United States. Joe Lubenow Industry Chair Engineering & Technology/Transportation Subcommittee