Mailers' Technical Advisory Committee September 14, 1995 Minutes The meeting was called to order at 9 a.m. on Thursday, September 14, 1995, by Yvonne Reigle, Mailers' Technical Advisory Committee (MTAC) Industry Chair. She welcomed members and guests and introduced Postmaster General Marvin Runyon as a special speaker. Postmaster General Runyon addressed three key issues in his remarks to the MTAC: postal performance, neighborhood mail, and legislative reform. He noted that financially, the Postal Service's performance this past year has been the best ever. Expenses are $825 million less than budget; revenues are $574 million ahead of expectations; and volume has increased by 2 percent. Next year's budget has been approved by the Board of Governors and calls for a net income of $504 million with a continued increase in volume. Service performance continues to remain strong, and the Postmaster General discussed a plan for maintaining outstanding service during the coming holiday mailing season. In discussing neighborhood mail-a simple method for postal customers to promote their products and reach local markets-the Postmaster General noted the realities of competition that are driving implementation of this program and development of other new business opportunities. He said that the proposed test of the neighborhood mail program has been postponed until next year, after the program design has been evaluated further and discussed more fully with customers. Finally, Postmaster General Runyon gave an update on legislative reform. He noted that important information for upcoming Congressional hearings on postal reform came out of two recent meetings: (1) a Postal Service-sponsored international conference in July, called FuturePost 95, in which leaders from 15 major U.S. businesses specified legislative changes they would like to see, and Directors General from five foreign postal administrations discussed postal freedoms available in other countries; and (2) the August National Postal Forum during which postal customers supported some important legislative changes and recommended more business flexibility for the Postal Service. He also discussed the support that the key postal chairmen in Congress--John McHugh and Ted Stevens--are giving to postal reform. After thanking the committee for its tremendous support and requesting members' assistance in reforming MTAC, the Postmaster General answered some questions from the floor. During this time, he emphasized the following: (1) Postal Service commitment to competing for international business; (2) the need to increase revenue and hold down rates; (3) the need to improve productivity/quality and to control postal costs; (4) plans for operating post offices in Atlanta during the Olympics; (5) plans for increasing media advertisement of postal services; and (6) the challenges of making in-house bar coding by transitional employees a viable investment. Mr. Runyon also suggested that MTAC invite Jim Walton, Vice President of Workforce Planning and Service Management, to speak on workload complements at its next meeting. Ms. Reigle thanked Postmaster General Runyon for his presentation. Next, John Wargo, Vice President of Sales, welcomed Bill Henderson, Chief Operating Officer and Executive Vice President. Mr. Henderson thanked the committee for its support and requested members' help in striving for record levels of service during the upcoming fall season. Next, Mr. Wargo introduced Loren Smith, Chief Marketing Officer and Senior Vice President, to give his perspective on what is necessary for the Postal Service to be competitive into the next century. Mr. Smith began his presentation with an update on reclassification, a first step toward adequate pricing. He then noted two laws that impact Postal Service efforts to "price right," or competitively: the economies of scale and the law of the open marketplace. When considering the economics of the Postal Service, the focus is on optimizing volume and revenue to maintain the lowest overall cost and the highest level of service. Remaining competitive also means identifying and targeting new service markets in a changing, open marketplace (i.e., the neighborhood mail program and Fastnet). To compete in light of these demands, the Postal Service is investigating the use of technologies such as electronic commerce and hybrid mail. Mr. Smith closed by stressing Postal Service commitment to being the most efficient and effective provider of mail services in the world and by encouraging ongoing dialogue between MTAC operating committees and Postal Service leaders. Mr. Wargo introduced the next speaker, Norm Lorentz, Vice President of Quality, to discuss changes in dealing with Postal Service customers and their requirements. Acknowledging the challenges of changing an organization to focus on its customers, Mr. Lorentz expressed confidence in the leaders of the Postal Service and optimism about their support for such a transformation. He focused on actions taken by the Postal Service after completion of the Baldrige assessment in February. Under a program called CustomerPerfect!, 10 specific areas of the assessment were singled out as fundamental to creating a management system with a customer satisfaction focus, and 10 leadership action planning teams were launched to study and implement changes. Mr. Lorentz briefly described some of the 10 areas of focus: (1) creating business objectives based on customer, employee, and marketplace needs; (2) improving strategic planning; (3) realigning education requirements and compensation packages; (4) creating a reliable method for new product development; (5) managing business in a process- oriented way; and (6) measuring customer satisfaction effectively. He noted that implementing these and other changes would be more difficult than identifying them, and he requested ongoing support and encourage-ment from MTAC members as the CustomerPerfect! program is advertised internally. When questioned about the cost of implementing a quality management program such as CustomerPerfect!, Mr. Lorentz underscored the costs of lacking such a program (e.g., rework and mail not being moved). The goal of the program's 130 dedicated quality professionals will be to turn everyone in the postal business into a quality professional, more than recouping initial program investment by improving overall productivity/quality. John Kelly, Vice President of Area Operations for the New York Metro Area, was introduced by Mr. Wargo to update the MTAC on New York's "key number" system. The New York Metro Area is developing an alternate number system to control mail flow for New York City apartments. A "key number" will be part of the address format. Mr. Kelly also noted that a proprietary file with names and a list of key numbers is being developed for use in converting other customer lists to the key number system and in delivering Express Mail. Individuals will be advised to continue using an apartment number for their business with private delivery. Next, Mr. Wargo introduced Virgil Horton from the American Forest & Paper Association, to give an overview of the industry. Mr. Horton addressed various factors influencing the capacity/supply, demand and costs: (1) slowing capacity growth, financial constraints of the paper industry, and changing global markets; and (2) availability affected by world demand, costs of building new paper mills, and availability of fibers. For more details on this presentation, refer to the attached briefing charts. In his final remarks, Mr. Wargo thanked Jim Jellison, Ed Meszaros, and Chris Rebello for their recent recognition of national account manager, Judy Wolf. She was presented the George Shannon Award by the Parcel Shippers Association. Then Mr. Wargo presented an award to Dick Funck, Chair of the ABC Core Group, for the group's efforts to integrate customer and postal activities into the automation program. Similar awards were given to each industry member of the group. Before adjourning the meeting at 11 a.m., Ms. Reigle requested that MTAC members bring their new name badges to future meetings. First-Class/Expedited Mail Subcommittee Meeting September 13, 1995 Meeting Minutes 1. McHugh Proposal - Payment Date is Postmark Date - A briefing was provided on the legislation currently in the House of Representatives which would establish the post mark date as the date in which charges to an account would be posted. This bill developed as a result of a letter writing campaign initiated by a radio talk show host. It was in response to complaints by consumers that payments to credit card companies and other billing agents were either delayed in the mail by the Postal Service or were intentionally being posted after the due date so that companies could charge interest on late payments. The negative impact of this legislation would be significant. American Express indicated the two areas most significantly impacted would be loss of finance charges and system changes required to redesign entire remittance processes. It was noted that the new legislation could require firms to retain copies of envelopes as proof of date of receipt. It also was noted that new emphasis would be placed on improved service performance of the Postal Service in handling remittance mail. Members were asked to be sure that their respective associations were briefed and that government affairs departments took the necessary steps to emphasize the impact this could have when dealing with congressional representatives. It was noted that the likelihood of this bill passing is not great. The importance is to make sure that significant efforts are being made to decrease the emphasis of this legislation in the future. A copy of the proposed legislation is attached. 2. Remittance Mail Working Group Update 3. Remittance Mail Postal Update - An update of both the working group and Postal Service activities on remittance mail was provide. Copies of the presentations are attached. Emphasis was placed on the expectations of the committee and what has been accomplished to date. The Postal Service emphasized the actions surrounding the Delivery Policy Letter. It was noted that this letter was designed to bring plant manager attention to the day-to-day operations of processing remittance mail. This was designed to have an immediate impact on performance of this product. Second, the emphasis was placed on the FIM Network by looking at the FIM sort plans for each area. This was to assess the current distribution practices and evaluated proposed distribution changes which would improve service. The next steps will be to monitor the progress of the FIM Networks and the progress on solving service problems to designated city pairs. It was noted that a "Best Practices" operating plan would also be developed which would support the plants in handling this service. The need for more local remittance working groups was emphasized and the resolution of performance measurement issues was also discussed. 4. EXFC Quarterly Report - The performance trends for overnight First-Class Mail, as well as the two-day and three- day categories continue to improve. Compared to the same period last year which had a performance of 83%, overnight First-Class Mail for this physical year quarter II was 87%. The two day commitment for quarter II of this year was 79% as compared to last year when it was 72%. The three day performance was 77% in quarter II, 1994 as compared to the same period in 1995 when it reached 82%. This performance set a record for overnight and two-day and tied the previously set record for three-day mail. Graphic representation of this data is attached. 5. First-Class Mail Research - Research was presented on First-Class Mail which was designed to look at what can be expected in the future. The market was defined as documents designed to provide visual representations of information. The current transfer systems included mail, facsimile and EMail/EFT/EDI. The general consensus for the future is that hard copy communications will continue to grow. However, electronic message systems will grow at a faster rate. The demand for communications is created by economic growth, population growth, household and business formation, and business practices and consumer habits. Of these, business practices/consumer habits and technology are the only areas which could have a negative impact on growth of hard copy communications. Over the next five years, all forms of communications will grow with customers having a greater choice in the methods of communications. The greatest needs facing communications include reach and effectiveness, cost and timeliness, accuracy and quality, security and privacy, acceptability and familiarity, convenience. Change is being driven by highly efficient mail preparation, reclassification initiatives, decentralization, database management and development of digital printing. Details of the presentation are attached. They include the support data of estimated growth and market share estimates going into the year 2000. Additional research is now being developed which will examine business processes and customer needs in billing, payments and statements, both before and after items become mail. This research is being conducted by PSI. The Postal Service is interested in obtaining volunteers who would be willing to be interviewed for this research over the nest two months. If you have interest, please contact Kent Smith at Postal Headquarters, 202-268-6009. Mury Salls Chairman MTAC SECOND-CLASS SUBCOMMITTEE SEPTEMBER 13, 1995 Charles Pace, Industry Chair John Dorsey, Postal Chair Introduction Charles Pace opened the meeting and welcomed all guests. Erv Drewek, Director of Distribution of the Banta Publications Group was introduced to review recommendations by the Industry that a change be considered for DMM Section E230.8.5. Recommendation by Industry that a change be considered for DMM Section E230.8.5 Erv explained that current regulations require a separate mailing statement be prepared for the per-pound postage computations for each publication. The per-piece postage computations for all regular rate publications must be on the mailing statement for the regular rate publication containing the higher or highest amount of advertising. The nonadvertising adjustment must be computed on the appropriate mailing statement for each rate category based on the publication containing the higher or highest amount of advertising matter for that rate category. He noted that the Policy, Requirements and Methods (PRM) Group has made the following observations and recommendations for change: current policy outdated; computer technology advanced; proper administration of postage payment is still critical; Industry emphasis on comailing issues; documentation should accommodate separate mailing statement per publication, per-piece computations on each statement, and nonadvertising adjustment on each mailing statement; and polybag issues encompass same publisher and different publishers as well as firm packages. Erv requested additional Industry input to the PRM Group. Dennis Farley of Fairchild Publications expressed that this is a great idea. If different publishers are involved the current regulations will not provide accurate accounting of postage. Comailing will still be a practical reality with or without second-class reclassification. Charles Pace requested that Anita Bizzotto provide additional perspective on the PRM group recommendations. Discussion pointed out that in a comailing environment publishers need to distinguish between bundles and individual packages. Policy, Requirements, & Methods (PRM) Update Bill Strong, Industry Chair of the PRM Group, reported that the Group's meeting yesterday focused on airmail facilities (AMF). He also reviewed the recent meeting at the National Postal Forum in Philadelphia with Operations personnel as being extremely beneficial. The industry feels that the Bulk Mail Acceptance Directory is in need of updating and that it should be made available on CD ROM and/or RIBBS. He mentioned that Hassett's Dale Brewer attended the meeting. Bill then reintroduced Erv Drewek who reviewed examples whereby copalletization can work to the advantage of small publications. He stressed that copalletization might not be for publishers who have time sensitive needs, but short run printers can use this to advantage for clients. His examples showed sacks saved for the Postal Service and thanked Ernie Collins' efforts which were instrumental in taking the PRM Group's recommendations, culminating in the March 95 final regulations. Erv's copalletization examples are attached for detailed review. Erv said the next step is to take multiple titles and use copalletization to advantage. Bill Strong reviewed the PRM Group's concern over AMF facility differences. The group wants to profile the handling of mail at AMF's to encourage USPS development of consistent operating standards. The group will continue to identify opportunities to improve acceptance procedures and will attempt to focus on priorities including minimizing paper usage and enhancing EDI efforts. He asked for those interested in joining this effort to identify themselves. ADVANCE Charles Pace then introduced the Postal Service's Glen Cournoyer who reviewed the ADVANCE system currently in use by third-class mailers as a tracking and monitoring system which might be adapted for use by second-class publishers. He covered the process, which calls for mailers to submit data to the National Customer Support Center eight days prior to mailing; data is then electronically transmitted to the ten Area Offices and then goes to 5,700 delivery units. The delivery supervisor records time of arrival and start/end time of delivery. This information is available on RIBBs to enable electronic access to participating customers. Glen suggested second-class publishers consider which requirements are appropriate for them and whether or not they can adapt this system to meet their needs. Glen mentioned there are currently 35 third-class mailers in this program. Ted Russell of Time-Warner asked if the data from ADVANCE is actionable and if it can be used as a performance indicator. Glen responded that the system can help determine why a mailing is late and it can be thought as "real time" information. He also said EX2C is only actionable after the fact whereas ADVANCE is actionable during the fact. Glen asked Charles Pace and John Dorsey to form a committee of publishers to review this program to provide policy and technical recommendations to the group. The following have offered to serve on the committee: Name Publication Telephone # Fax # Bob Terry RPA 205-870-4720 205-870-8957 Howard Schwartz Conde Nast 212-880-4372 212-379-6331 Bernice Geisert Advanstar 218-723-9217 218-723-9533 Tom Tully McGraw-Hill Inc. 212-512-2188 212-512-2160 Bill Strong RTNP 708-854-8186 708-854-8187 Dennis Farley Fairchild Publications 212-630-4529 212-630-4454 Jerry Okabe Miller Freeman 415-905-2259 415-905-2233 Charles Pace APA 203-834-0533 203-834-0207 Non-Profit Second-Class Update John Dorsey reviewed the classification reform plans for second-class non-profits. He stated the first customer meetings took place during June 1995 and that market research is now underway. The results will be used to help resolve such issues as anticipated volume levels at alternative requirement levels (90% vs. 80%, etc.). A proposal will be ready for filing by January 96. John stated the USPS does not want non-profit reclassification to pose problems for publishers planning to implement currently proposed reform of second-class and also not to be an issue if a new rate filing should occur during 1996. Second-Class Focus Group Special Report Tom Tully, National Industry Chair for the Second-Class Focus Groups, provided a report on national delivery and current issues being addressed by the five Focus Groups. He reviewed the recent meeting of publishers at the National Postal Forum in Philadelphia during which Postal Service Operations personnel from New York's JAF, New Jersey's DVD, and Los Angeles showed how second-class publishers can enhance service by providing proper makeup and knowing specifics about each facility through which their mail flows. Other facilities reviewed included Chicago's Irving Park, Atlanta, and Northern Virginia and specific service problems were discussed for each of these. Tom indicated flow charts for second-class mail for the facilities reviewed would be attached to these minutes. He also reviewed Joyce McGarvy's presentation which covered Chicago's introduction of the "Mr. Quality" program to enhance service and which involved such features as a 24- hour hotline, etc. Joyce also reviewed the Irving Park phase-in schedule for secondary zones (chart also attached) which represents a major change for publications such as Crain Communications and which has created a number of problems. Tom Tully stated that based on some EX2C data there are indications that lateness is occurring 30-70% of the time. It was agreed that Areas perceived as requiring attention will be identified at each of the Focus Group meetings. Tom noted Lou Bradfield (Industry Co-Chair for the Mid Atlantic/Allegheny Focus Group) and Dick Strealy (Industry Co-Chair for the Southeast/Southwest Focus Group) reported that service complaints are down for these Areas. Tom reiterated that these groups are extremely effective for publishers who want to work with the Postal Service concerning specific service issues in order to gain resolution of any problems. He said the attachments to the minutes will also include meetings scheduled for rest of this year. Update on Classification Reform Dick Funck reported on the status of the Periodicals Implementation Advisory Group. He reviewed the meeting results from this past July 31 (see attachments for detailed minutes) and he stated that, with the exception of the Periodicals Group, the working groups in general have completed their work. His group is planning at least one more meeting the time and place yet to be determined. He covered such subjects as the FSM 1000 which shows promise in accommodating more machinable flats and will be deployed next year. However, it does not yet accommodate "flimsies" and further work is required. He stressed that his group recommends that the "85/15" ruls (85% requirement of 9 digit and 15% coded to 5 digit) be maintained since it is impossible to get 100% barcoded in the publications service. Update of Network Issues Bob Sheehan reviewed his part in the BMC network study, the 2C volume as part of this, and the opportunites for service improvement. His approach has been open discussion with the industry group, and focus on processing & distribution issues that improve service (as opposed to revamping the Distribution Network). Issues being discussed are 2C hubs, plant loading, impact of reclassfication, impact of air to surface diversions, critical entry times/operating plans, and existing transportation. The outcome is that discussion issues are included in the BMC Network Study. New Business Monica Lundquist, Brown Printing Co., raised the issue of problems arising from the new acceptance and verification by field personnel. Ed Wronski, Manager, New York RCSC, promised to review this situation. Charles Pace, Chairman Date: 9/14/95 MTAC Third Class Subcommittee Industry Chair Dan Minnick began the meeting by noting that the item regarding possible changes for flats barcoding specifications to be presented by USPS's Sheryl Johnson would be tabled to the next meeting. Due to the number of samples offered, the testing of customers' differing flat- sized mail pieces was not yet completed. A full report of the results by Sheryl and technical representatives would be given at the December meeting. Dan Minnick then introduced Tim Reeter, Sales Manager from Great Lakes Area as the new Postal Chair of the group. Meeting Discussion 1. Return Rates for Third Class Pieces Kathy Siviter from AMMA gave an update (handout attached) on the progress of the task group formed after the last rate case where Third Class parcels over 5 ounces received a 20 to 86% increase. The group has already achieved some short- term changes such as extension of the Carrier Release Program to Third Class and bound educational material being allowed to be returned as Fourth Class bound printed matter. The group also has long-term alternatives including the possible availability of Shipper Paid Forwarding for Third Class parcels and a new Address Correction Requested / Do Not Forward / Return Postage Guaranteed endorsement permitted under Address Change Service in the future. The major accomplishment to date is the pending creation and testing of a new Third Class Bulk Parcel Return Service. This would include return to a central USPS facility and establishment of a new bulk rate paid on the total weight of the returns. This would allow mailers to simplify postage payment and acceptance. The USPS would benefit by lower costs and increased revenue through use of this service. It would also decrease the number of customers forced to decline having low value parcels returned, which causes USPS to bear the cost of their disposal. After completion of market surveys, it is expected that the USPS will file for this experimental new service by November 1995 for a one year test. 2. Classification Reform - Flats Implementation Advisory Group Dan Minnick reported that the significant results of the most recent meeting were that barcoded and non-barcoded packages did not have to be physically separated in containers. In addition, some "fletters" (pieces qualifying as letters or flats) will be allowed, if submitted as barcoded flats, to be prepared on pallets. 3. Mailing Facility Liability if Mail Owner Defaults on Postage Check Don Harle of Mid America Mailers reported that he had discussions with Mike Riley and Richard Porras on this issue. He then introduced Richard Porras who said that USPS is clarifying its position of this issue to put liability for insufficient funds on the writer of a check made out to USPS and not the mailing facility preparing the mail. This does not include checks from the customer to its mail preparer; only checks made out to USPS. The new policy has not received final USPS internal clearance from legal or the Inspection Service. Richard said that the final proposal will also be sent to the Area Vice Presidents, but a survey of the 85 districts indicated that this was not a national problem but limited to a few localities. It is expected that the final rule will be out within 30 days. 4. Non-Profits Using "Doing Business As " Names in Return Addresses Brian Hummel of the Alliance of Non-Profit Mailers explained this issue. Many non-profit customers want to use an organization's commonly known name in the return address instead of the official (USPS authorization) name. The commonly known name is officially recognized by States' Attorney Generals. The USPS appears to have an inconsistent policy in this regard and he asked if both the official and "Doing Business As" name could be jointly held in USPS records. The USPS's Jerry Lease responded with an option which would allow non-profit mailers to have their authorization held under their "Doing Business As" name. He said this was better than multiple name authorizations which had both fraud and USPS administrative concerns. Mailers could send a document from their state showing approval of the "Doing Business As" name and the Memphis Non-Profit Service Center could change the name in the data base. If the industry agrees, Jerry said that this could be implemented rather quickly with instructions to Memphis and the field. Brian Hummel said that he would prefer having both names in the data base but would survey the industry to see if this was acceptable. 5. New Non-Profit Eligibility Requirements and Implementation USPS's Ernie Collins and Evelyn Stein gave an update on this issue which has new rules effective 10/1/95. Ernie said that advertisements for products and services must be substantially related to the approved purpose of the qualifying organization. Also a product must be a low cost item (under $6.50 value as of 1/1/96) excluding donated items which are allowable. Non-Profit publications can be mailed as long as the advertising content is eligible. There are new and different rules for both advertising and products and customers should be aware. Evelyn Stein advised interested customers to obtain a copy of Publication 417, "Special Bulk Third Class Eligibility" which is now available to customers. There is a six-step process in the publication to help customers determine eligibility. Evelyn said that USPS training has not been completed for Managers of Business Mail Entry, Postmasters, and Bulk Mail Acceptance clerks prior to the October 1st implementation. 7. "Or Current Resident" on Piece with "Address Correction Requested" Dan Minnick updated the committee on this endorsement recommendation. He also mentioned a new endorsement of "Address Change Service" only which would allow the owner of a list to receive the necessary address corrections without penalizing the list renter by paying the cost of returns, forwarding, etc. This would greatly improve the address hygiene of mail lists. A straw man will be prepared on these general endorsement recommendations and the additional specifics, as above will be pursued at the next task group meeting. 8. Non-Profit Classification Reform Status John Dorsey said that the preliminary data had been established and he anticipated a January 1996 filing based on R-94 costing data. Third Class and Second Class Industry Advisory Groups have given input and the consensus is that as much as possible, the proposals mirror the current Standard and Periodicals Classification Reform requirements. At present the Third Class group was more comfortable than the Second Class group due to some uncertainty about the final rules on Publications and Periodicals. For example, they might not mirror the Publications requirement of 90% sorted to the 3-digit level, but might recommend only 80% sorted to the 3-digit level. Industry data will be gathered in the next few weeks to support the group's work. It is hopeful that by mirroring the current Classification Reform proposal as much as possible, the Non-Profit case can shorten the normal 10 month time frame. This would also shorten the period of time that USPS has differing rules for Standard Mail, Periodicals, and Non-Profits. 9. Neighborhood Mail John Dorsey also gave a brief summary on the status of "Neighborhood Mail" for those members who did not attend the Philadelphia National Postal Forum. There are some misconceptions and erroneous information on the USPS intent of this program. In Philadelphia, Loren Smith said that we are targeting the low-end, small business market to access the mail as a medium. It was also hoped that they would eventually evolve into traditional Ad-Mail customers. The idea was to have small businesses present Simplified Address mail at local post offices in Carrier Route saturation quantities. The program's objective is not to take business away from list compilers, letter shops or other allied services. The original test has been delayed until January 1996. In the interim USPS will discuss with the industry to how best define the program to its intended (new) market segment. Anyone wanting to offer feedback can call John Dorsey (202) 268-2255. Dan Minnick MTAC Third Class Subcommittee Chairperson MTAC Addressing and ZIP+4 Address Change Service Rich Schart opened the meeting with a description of his experience in using ACS. His company is a recent participant in Address Change Service. He ran his list through an NCOA licensee and then about 6 weeks later mailed the pieces with an ACS participant code. He was receiving ACS corrections at a higher rate than he felt he should considering the NCOA processing done earlier. He also received a number of hard copy corrections. Mike Murphy of the National Customer Support Center (NCSC) explained that it takes an average of 3 weeks for a change of address order to appear in the NCOA database once it has been filed with the Postal Service. This is due to the collection validation and product generation process. About .5% of the permanent changes may be delayed even longer because the address which the customer supplied cannot be validated or ZIP+4 coded. Once that has happened, then those records are added. Mike also explained that not all actual moves will be captured in the NCOA matching process. This is because of the strict name and address matching logic which the licensees use. The Postal Service wants to be sure that only the correct information is supplied from the matching process. Mike urged that mailers examine the results which are identified as NCOA Nixie Moves. These are records which are probable moves, but because of the matching logic cannot be updated. In addition, approximately 15% of the records in the database are either "Moved, Left No Address" or "Box Closed" records, where the customer has "abandoned" the mailing address. Mike also pointed out that the quality of the addresses in the list or the address list system itself may contribute to a decreased number of matches by the licensee. Mike also listed several conditions which will always result in hard copy returns to the mailer. While CFS sites cover between 93%-96% of all forwarding activity, there are still some sites which will always be producing manual returns. A list of the covered ZIP Codes is available. Other reasons include: the customer is deceased; the piece has been refused by the recipient; no order is on file, forwarding order has expired or mail is received through a single delivery point, such as a hospital, college, commercial mail receiving agency, prison, etc. Mike urged mailers who are experiencing what they feel are high rates of hard copy returns to contact Audrey Conley at the NCSC. However, he also pointed out that the inappropriate actions of delivery unit personnel are customer service issues. If the problem persists in particular areas, mailers should contact the district manager who is responsible for those offices. Address Element Correction Address Element Correction service provides an opportunity for mailers to improve addresses which could not be matched to the National ZIP+4 file using commercially available address matching software. Step 1 provides a computer resolution process which is CPU intensive. 100,000 addresses can take 20-30 hours to process. Step 2 uses proprietary name and address files to add additional matches. Currently, the process is correcting an average of about 60%-65% of the addresses it processes in Step 1. Step 2 adds about 10% of the remainder. Some new software enhancements are planned in a couple months which may raise the average improvement rates of Step 1. Currently, two DSF licensees are testing their capability to run the process commercially. The postal AEC service prefers a minimum 10,000 records but occasional accommodations can be made for smaller files. Mike urged mailers to run a sample test first and examine the results closely so that the results of further use of the process could be easily understood. Several mailers urged the other members to spread the word about this service and encourage its use to help them move towards 100% coded addresses. CASS Testing Mike described the cooperative approach the Postal Service has taken with its Partners in Tomorrow work group. The group met in June to discuss the new CASS tests which will be available next year. CASS testing will be checking for valid military box codes in military ZIP Codes. It will also eliminate the default ZIP+4 code "5000" for military addresses. Mike reminded the audience that CASS testing is designed to make sure that what comes out of the matching process is correct. It combines both science and art. The Postal Service is concerned that users of software are adding more "art" than the vendors used when processing the certification test. He is working with the vendors to help ensure the software is used appropriately. Linda Taggart added that her company regularly goes through the testing process even though they are using certified software. She added that the test takes some time and effort but there is no direct cost and she has used the process to ensure the software is installed and working properly. She recommended that others do the same. Optional Endorsement Line Clear Space Requirements Cheryl Beller addressed the issue of the clear area around the optional endorsement line. She indicated that a meeting is planned in the next two weeks to finally resolve the issue. A letter is being sent this week to the field to eliminate confusion about the operational endorsement line until final resolution can be made. Addressing Work Group Bob O'Brien reported on the meeting of the Addressing work group. He commented that many of the issues had been discussed during Michael Murphy's presentation. Bob said the AEC service is going well and it had been his experience that the quality of the matches provided was not as suspect as some others may believe. He encouraged users to provide feedback on their returns to the NCSC. Bob was quite pleased with his experience and urged others to take advantage of it, adding "Any enlightened mailer will be using it. ...(It's) the only game in town." Bob then discussed some simulations that had been done to evaluate the impact of classification reform in light of the changes to presort. In his examples, the total postage went down, but the make-up of the mail changed substantially. Bob asked when information on 5-digit schemes might be availabe. He also discussed the "electronic only" option for ACS that has been requested by some mailers to limit the amount of hard copy notices they may receive. Address Quality Implementation Advisory Group Joe Lubenow discussed the most recent meeting of the Address Quality Implementation Advisory Group. He indicated he had made a presentation on Line of Travel and Uniform Placement of Address Elements at the Postal Forum. He offered copies of the handouts to those who wanted them. He indicated that the line of travel requirement exists in enhanced carrier route and publications service. A technical guide for the LOT product is available from the NCSC by calling 1-800-238- 3150. Joe added the definition of uniform placement is final and that it is a process best done by computers. He reiterated the bi-monthly product cycle which will shorten the active life of carrier route data from 8.5 months to 6.5. ZIP+4 coding must be performed every 6 months for access to barcoding rates. The group also felt the proposal to verify the accuracy of 5 digit ZIP Codes was reasonable. The group is also eager to develop additional alternatives to meet the Move Update requirement. Joe referenced the work of some vendors to develop alternatives and indicated a variety of technical and licensing issues still needed to be resolved. John Kelly's presentation on the New York KEY numbering plan was deferred due to scheduling problems. Peter Moore closed the meeting by once again asking members to supply agenda items for the December meeting. MTAC MINUTES FOURTH-CLASS SUBCOMMITTEE September 13, 1995 Meeting was opened at 10:30 A.M. by Ed Meszaros. First introduced was Pete Zeranski who gave an update on Parcels Reclassification by describing the meetings which have been already held. He went over the methodology of the customer input process. Next meeting is October 18 here at USPS HQ. The agenda has not yet been developed but may be presentation of final product definition. Controversial elements include treatment of light weight 3C parcels, customers have been heard and the issue is being addressed now. A lengthy discussion regarding other elements of the proposed plan developed, Mr. Zeranski indicated that a letter soliciting input will go out in the near future, responses should be directed to Mr. Zeranski or Lloyd Karls. Mr. Karls added that he encouraged objective input into the process to develop a higher quality product. Rick Schart, of JC Penney's, and Stephanie Tolson gave a presentation on the Shipper Paid forwarding test currently underway. After a several year discussion regarding creating this product, JC Penney's is the first customer they view it as very successful and are very pleased with it. Keyline includes rate code, JC Penney's uses this service for BPM and are being charged BPM, problems with information contained on the invoice and, in some cases, carriers still trying to collect Postage Due. USPS has to get word out to employees. 3C not yet included but is being considered. It can't be added until the expected 3C filing. Stef Tolson solicited a work group from the MTAC committee to help with writing rules for the Federal Register. Stef continued with an update on the increase of parcel size 130 in. length and girth combined. Operations, including delivery, is still looking at the actual size they can handle. The 130 in. is not barrier but individual dimensions may be. Once defined a special filing will be made to enter into a test. Actual filing would occur with the Parcel Reclass filing Phil Parazino then provided Parcels Work Group update. That meeting, held Tuesday, dealt with 5 issues: 1.Bar code of future - the current barcodes are still the choice for the near future. A discussion regarding the next phase of technology ensued. As a result, at the next meeting people from the USPS and industry will be invited to discuss future technology. 2.Bar code discounts - Current included as part of Parcels Reclass. 3.Polywrap issue - Win Zimmerman explained Swiss Colony will have machine which can read through Polywrap. This is not a Postal fix but may have application for industry. 4.Use of same Bar Code for Flats and Parcels - Technology does not yet allow for this. 5.Track and Trace update - The USPS is in pursuit of an integrated system to meet the needs of the mailing community. The next Parcels Work Group meeting will be held on the Tuesday preceding MTAC> After Phil, Tom Higgins gave a Volume and Revenue update for 4C mail. Volume for all 4C is up by over 23% for AP 12 with BPM leading the way with an increase of over 52%. The Year- to-Date figures show an increase of 7.1% for all 4C. Parcel Post is down by 3.8% Year-to-Date. Dave Shinnebarger gave an update on the USPS Tracking and Tracing plans, a copy of his presentation is attached. A description of the integrated approach being undertaken by the USPS in pursuing this important enhancement was presented. The system being developed will exceed the stated needs of the customers and testing of the concept may begin as early as December. It is planned to include all products and provide door-to-door tracking at Real/Near Real time. The meeting was closed by Mr. Meszaros at 12:20 PM _________________________________ Ed Meszaros Fourth-Class Co-Chair MAILERS TECHNICAL ADVISORY COMMITTEE ENGINEERING & TECHNOLOGY/TRANSPORTATION SUBCOMMITTEE MEETING MINUTES SEPTEMBER 13, 1995 Industry Chair - Joe Lubenow Postal Chair - Bob Cundiff PIEX Report - Rick Graff: - The PIEX Group met September 12, and currently is working on three projects in concert with the USPS. The first project is a beta test of the Publisher's Electronic Payment System (PEPS) with two publishers. The intent of the test is to run three consecutive issues without errors prior to a roll-out beyond the two test publications. The test is experiencing problems with the weight as computed by the system for the publication versus the actual weighing by the DMU clerk. Additional help from other PIEX members was solicited, and a work group will be established to help address those issues. The second project involves helping the Postal Service to define and implement ways to use the Graphic Communications Association's new GCA MAIL.DAT specification, which is discussed in detail below. The third project is a payment option program that may impact a variety of mail classes. According to Rosemary Hamel, the USPS is considering a change in its procedures and regulations to allow overnight debiting as a new electronic payment option. Under this option, a bulk mailer may be able to do a bank transfer overnight, debiting an account previously set up by the mailer for this purpose, instead of arranging payment in advance and perhaps before the amount owed is known. The testing will be conducted through the San Mateo PDC using a network to transfer funds between the mailer and USPS based on the value of all mailings within a one day period. This would provide additional float time for the participating mailers. Containers & Transportation Report - Russ Shores: In the meeting September 12, Paul Seehaver of the USPS provided an update on the fall plans for mail transport equipment. There should be few problems this fall getting sacks, trays, or pallets. Current stock includes 1.7 million pallets. The current contract for production of pressed board pallets expires in early 1996 and USPS will be going to mostly plastic pallets which will include a heavier duty plastic and are more environmentally friendly. Forty million trays are on hand of which 2.5 million are the extended tray management trays, and 1.5 million are half-trays. Twelve million #3 plastic sacks are also available. The disposable plastic sack label holder has been redesigned for easier use. The comment period for the new pallet regulations proposed in the Federal Register closed on August 30. The final notice, to be published in late October to early November, will reflect opportunities for more mailers to palletize. The 500 lb. pallet will be required, but a 250-499 lb. pallet will be optional. A new working pallet will be also be allowed after the mailer has completed all the required pallets possible, for left over packages or bundles which will be distributed to the appropriate origin postal facility. Pallet integrity monitoring procedures will be implemented with feedback will be provided to the mailer. There is no resolution yet on the percentage of defects that will be allowed before a mailing is held up or rejected. Concern was expressed about the pallet regulations overlapping with classification reform and the amount of time needed for software companies to rewrite their programs to accommodate the regulations. Another topic was the 8125 form accompanying mailings to the destination, which continues to be an issue when many mailers are using third party logistics services and paperwork may pass through a lot of different hands. Discussion on this issue included possible options to the 8125 process through an EDI environment. There still seems to be a problem in getting timely drop ship appointments to certain locations such as the New Jersey BMC due to short windows. Clarence Banks of R.R. Donnelley will work on identifying problem areas. Classifying rescheduled appointments as no-shows continues to occur. Flats Report - Dick Funck: Dick recognized Sherl Johnson for her significant contributions to improving flats automation. USPS continues to run tests in Gaithersburg to certify as many polywrapped mailpieces as possible to qualify for the automation discounts. A particular type of polywrap is being tested quite successfully on a variety of shapes and weights of mailpieces. Twenty-one poly manufacturers are involved in observing the tests. Other tests are being scheduled for mailers in late November. Other non-machinable mailpieces are also being tested for automation discount qualification based on machine modifications in Chicago and Hartford. The modifications includes raising the pusher finger, that pushes the mailpiece along, and modifying the diverter to accommodate flimsy mailpieces that are currently subject to flyover. The tests are ongoing and not yet concluded. These modifications are necessary as new flat sorting equipment will not be available until 1996 or later. The flats group feels that it may not necessarily continue to meet separately as significant progress is being made on its current agenda. Longer term objectives such as flats automation policy and gaining discounts for pieces on new flat sorters will be transferred to the main Engineering & Technology/Transportation Committee to be addressed in future meetings. Postal Costing and Endorsements - John Reynolds: This presentation showed how the USPS rate case cost data gathering system worked, and highlighted the potential benefits to mailers of providing more information on the mail piece about classes, subclasses and rate categories to allow for more precise development of postal rates. Accounting data is supplemented with data from the ongoing statistical sampling system and from special studies. The end products are revenue, volume and cost information by class and subclass and rate category. The USPS currently relies on statistical sampling to measure these items through observation of mailpiece endorsements to determine categories of mail. Field data collectors, numbering 783 full time personnel, are monitored by auditors and USPS inspectors. The USPS provides the Postal Rate Commission all the data, computer programs and system documentation on which the figures are based. All interested parties, including customers and competitors have full access to the computerized rate case data. There are four major national data systems on which postal rates are based, as follows: 1) The In-Office Cost System (IOCS) involves random observation of clerks, mail handlers, carriers and lower level supervisors. Nearly 800,000 observations are scheduled each year. Piece endorsements are relied on to associate each observation with a category of mail. The amount of time spent on a category determines the percentage of salary attributable to that category. This data is used to attribute $20 billion in payroll costs to classes and subclasses of mail. 2) The Transportation Cost System (TRACS) is also used to attribute cost data from USPS accounting systems to classes of mail. USPS spends $3 billion annually with 68 airlines and 13,000 trucking firms and inspects 10,000 randomly selected truck, airline and rail van trips to attribute costs based on space utilization by class of mail. 3) City and rural carrier cost systems (CCS City and CCS Rural) involve counting volume by class for each delivery point. 12,000 routes are tested each year to attribute about $7 billion per year. 4) National revenue, volume, and weight by class of mail is reported as Revenue, Pieces and Weight (RPW). In FY94, 60,000 examinations of mailing statements were conducted to allocate $50 billion in revenues and 177 billion pieces of mail. Mailing statements provide most revenue and volume data, but do not provide all the data needed so they must be supplemented with the statistical sampling. The audited Cost Revenue Analysis Report (CRA) provides the contribution derived from each class and subclass of mail and is a published report available to anyone. The CRA by itself is insufficient to complete a rate schedule that must recognize differences in piece, weight, shape, distance traveled, work sharing and special services. Additional special studies, including cost attribution studies, cost avoidance studies, and weight and distance related studies are needed to complete a rate case with thousands of rate categories. MAIL.DAT (GCA Mailing Database Format) - Dan Minnick: MAIL.DAT is a database for efficient communication for those providing list processing, mail production and processing. It provides information about the pallet, sack or tray, about the package and in some cases down to the piece level, with more complete detail than the current GCA container summary file. Mail.Dat has 8 files which are: 1) Header: Who, what, when and why. In most cases a single record. 2) Segment: Overview of the list components for the job 3) Selective Bind: Make-up definition for different versions or editions of a job. 4) Container Summary: The quantity, weights and destination per container. 5) Container Label: For each container summary record, there is a container label. 6) Package Quantity: Weights, rates and destination per package. Most data is contained in this file. 7) Package Label: This file is for international mail information only at this time. 8) 3/5 Digit Container Quantity: The quantities for presort, barcode or whatever rate eligibility the pieces in that container qualify for, presented by three or five digit zip code within the container. MAIL.DAT provides all the data pertaining to the job except the mailing addresses. The related files are linked together by job ID, segment ID, container ID, etc. as one penetrates deeper into the file set. MAIL.DAT can be used to facilitate transportation planning, postage computation, and potentially for the elimination of hard copy documentation. Rosemary Hamel of USPS is planning the use of the MAIL.DAT file as input to a system that would nationally receive data and distribute it back to the local DMU, facilitating a more disciplined acceptance procedure and saving time and money. Tracking mailings or parts of mailings may be more feasible once MAIL.DAT information is captured. In the future, this could also provide the USPS with a universal database which can predict the flow and nature of mail volumes coming through each processing point up to 10 days in advance. Dan suggested that anyone interested in finding out more about MAIL.DAT talk to him or call GCA. More information will be provided later based on planned future meetings with Rosemary Hamel. Comprehensive Interactive Information System (CIIS) - Joe Lubenow A potential agenda item for a future subcommittee meeting is the Comprehensive Interactive Information System (CIIS) which is expected to be a comprehensive approach to tracking and tracing mail in lieu of the numerous current attempts at developing tracking systems. This may also incorporate the Unit Load Tracking Architecture (ULTRA) which has been discussed in prior meetings. OCR/BCS Processing Smudging Problems - Chuck Shaw: This was a USPS response to an industry concern about the smudging of certain types of mail such as laser printed pieces with internal smudging on inside components due to external pressures of the OCR/BCS equipment puts on the mail piece while it is being processed. USPS has been testing a variety of possible modifications to mail processing equipment. The most practical and economical solution is likely to be to go to flexible belting. Results from testing the new belts show that smudging is reduced by approximately 50%. An Engineering Change Request is in process and the change board is scheduled to meet within the next couple of weeks to review replacing the current belts with the new flexible belts. Full replacement will most likely take about two years. Another related problem is the abrasion of the belt rubbing against the mailpiece as the mailpiece is pushed into the OCR/BCS stacks. New belts may also help eliminate this problem. In addition, Engineering is also testing new software that will automatically shut down a machine if no mail is being processed after a 30-second interval to reduce the situation with the stacker belts continuously rubbing against the last mailpiece entering a OCR/BCS stack. The new delivery barcode sorter or Phase 3 machine has a different design of stacker that has a retractable guard that protects the mail in the stacker. Soft rollers currently available in the industry have not proven to provide additional benefits in conjunction with the flexible belts. There is no plan to test these rollers until the new flexible belts are completely installed on all the processing equipment, which will take about two years. Slim Jims (5 3/8" x 8 3/8") catalogs, that are not tabbed, have to be processed in the flat sorting machine with the bound edge forward standing on end. The aspect ratio of these pieces is such that they will not process consistently in the flat sorter. There is no modification in test to make those mailpieces machinable regardless of current rumors. Flimsy flats were being tested in Chicago and Hartford, as discussed by Dick Funck, and machine modifications are being evaluated, but not for Slim Jims. ________________________________ Joe Lubenow Industry Chair Engineering & Technology/Transportation Subcommittee