FSS Symposium 2008

Flats Symposium Agenda
National Postal Forum 2008

Tuesday, May 20, 2008
Speaker /
Time Activity
Participant(s)
Mike Winn
10:15 am Welcome
Tom Foti
10:30 am Keynote - USPS Flats Strategy Bill Galligan
Rosa Fulton
10:50 am Flats Sequencing System (FSS-101)
Brent Raney
Mike Winn
James West
11:15 am Panel 1 – The Future of Flats Addressing
Krista Finazzo
Steve Dearing
12:00 pm Future Technology for the Flats World Walt O’Tormey
12:15 pm Lunch Break
Joe Schick
1:30 pm
Panel 2 – Flats Containerization Krista Finazzo
Sharon Daniel
Anita Pursley
Panel 3 – Logistics, Planning, and Transportation in
2:15 pm Tony Dobush
the Flats Sequencing Environment
Jeff Williamson
3:00 pm Afternoon Break
FSS Communication Workgroup Introduction and Peter Moore

3:20 pm
Briefing Sharon Daniel
Mike Winn
3:35 pm FSS Town Hall Session Jack Widener
Rosa Fulton
Tom Foti
4:15 pm Wrap-up Mike Winn
Speakers Title & Company Information on the Next Page
1
Flats Symposium Agenda
Tuesday, May 20, 2008
Speakers
Bill Galligan Walt O’Tormey

Senior Vice President, Operations Vice President, Engineering
United States Postal Service United States Postal Service
Rosa Fulton Mike Winn

Executive Director, FSS Director, Postal Affairs and Operations
United States Postal Service R.R. Donnelley
Tom Foti Jack Widener

Manager, Integration and Planning, Marketing Director, Finishing and Distribution
United States Postal Service Newsweek
Steve Dearing Joe Schick

Manager, Intelligent Mail Planning & Standards Director, Postal Affairs
United States Postal Service Quad Graphics
Brent Raney Anita Pursley

Manager, Technology Applications, Engineering Vice President, Postal Affairs
United States Postal Service Quebecor World Logistics
Krista Finazzo James West

Manager, Operational Requirements & Integration Director, Postal and Government Affairs
United States Postal Service Williams-Sonoma
Sharon Daniel Tony Dobush

Manager, Mailing Standards Partner
United States Postal Service PLS-Midwest
Jeff Williamson Peter Moore

Manager, Network Development & Support President
United States Postal Service Peter J. Moore & Associates, LLC
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National Postal Forum
Flats Symposium 2008

Bill Galligan
Senior Vice President, Operations
USPS

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National Postal Forum USPS Salary & Benefits: $54 Billion
Mail Processing 22%
Support 0.9%
Other Functions 9%
Delivery 43%
Customer Service 16%
Maintenance 6%
Vehicle Services 2.4%
Source: 2007 Annual Report

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National Postal Forum Managing Delivery Costs
Incremental Cost Improvements Over the

Last 10 Years
Delivery Will Continue to be Largest Cost

Center
Continued Delivery Point Growth
Address Infrastructure Burden

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National Postal Forum What is Delivery Point Sequencing?
Technology Places Mail Pieces

into Exact Order of Delivery
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Letter Mail Technology (City) – DPS Trend
DPS Letter and Cased Volume History (City Delivery) 87%
100.0
90.0
DPS Letters
Cased Letters
80.0
70.0
60.0
Percent
50.0 • USPS Has Sequenced Letters

40.0 Since 1993
30.0 • Resulting in Over $5 Billion
20.0
Annual Savings
10.0
0.0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
YTD
Cased Letter %
Fiscal Year
DPS Letter %
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National Postal Forum Replicate Letter Mail Success for Flats

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Flat Volume Trend
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Annual Flat Volume
52 Billion Flats
FY 2007 (RPW)
First-Class
Mail
8% Standard
Mail
75%
Periodicals
17%
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National Postal Forum Flats End-to-End Strategy
Streamline and Simplify Mail Make-up
Reduce Number of Entry Points
Induct the Mail Where Processed
Bypass Sack / Bundle Distribution
Automate Mail Preparation
Automate Sequencing of Flats for Delivery
Leverage the Use of Data

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National Postal Forum Mailer Changes
1. “The Address”
2. Mail Entry
• Entry Points
• Critical Entry Times
3. Mail Prep in FSS Environment

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National Postal Forum FSS Benefits
Substitute Technology for Manual Labor
Manage Delivery Growth
Reduction in Future Delivery Vehicles
Reduction in Facility (Delivery Unit)

Space Needs
Improve Processing Performance and

Service
End-to-End Visibility
Create Lowest-Combined-Cost System

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FSS 101
Rosa Fulton Brent Raney
Executive Director, FSS Manager Technology Development
USPS USPS

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National Postal Forum Agenda
Overall Program Timeline
Prototype FSS Test
Pre-Production FSS Status Dulles VA
FSS System Overview
Production Deployment
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National Postal Forum Multi Phase Development / Deployment
Prototype – Indianapolis IN Apr 2006
BOG Approval 100 Production FSS Machines Dec 2006
Pre-production Install – Dulles P & DC Sept 2007
Production - First Article Installation May 2008
Phase 1 Deployment Begin Oct 2008
Phase 1 Deployment End

Oct 2010
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National Postal Forum Prototype – Proof of Concept
Test System - 192 bins and 2 feeders

Mail prep work stations 21,600 Pieces per hour
ai equipped flat feeders 16,200 Delivery points
OCR / VCS / ICS Carrier Routes – 20 - 25
2nd pass feeder assist Flat volume 30,000
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National Postal Forum Indianapolis, Indiana – June 2006
Test performed from April 17th

to June 10th 2006
FSS Machine Location

z Mail Processing Annex
(MPA)
z Indianapolis, IN
Carmel Indiana Delivery Unit

FSS Delivery Unit
Processed mail z Carmel IN
for
Zone: 46032 z Zip Code – 46032, 46033, &
46082
City Carriers – 24
Rural Carriers - 16
z City Carriers – 35
z Rural Carriers - 31
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National Postal Forum Indianapolis Test – June 2006
Four Major Areas Tested & Analyzed

1. Machine Performance
2. Processing Operational Impacts
3. Delivery (City & Rural) Impacts &
Concepts
In-office Operations
Street Activity
4. Customer Service Distribution Impacts

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Phase 1 Deployment – 100 Systems
Dec 2006: BOG Approve 100 Phase 1 FSS
29 Districts
33 Processing Facilities (FSS Locations)

z 28 Existing Processing Centers
z 5 New Facilities
2 - 5 Systems per Facility
1,800 Zones
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Phase 1 FSS Deployment Sites
#
Area Districts Plants / Facility
FSS
Northern NJ 4 NJ BMC
NYM Long Island NY 3 Mid Island NY P & DC
Central NJ 3 Trenton NJ P & DC
Boston 3 Northwest Boston P & DC
Massachusetts 4 Middlesex Essex P & DC
NE
Connecticut 5 Springfield BMC
SE New England 3 Providence RI P & DC
EA Columbus 3 Former Columbus P & DC
South Florida 5 New Miami Facility Project

SE Atlanta 4 Atlanta BMC
Central Florida 4 Orlando P & DC
Colorado / Wyoming 5 Denver P & DC

WE Arizona 5 New West Valley (Phoenix) Facility Project
Mid America 2 Kansas City P & DC
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#
FSS
Los Angeles 2 Herb Peck Annex
Sacramento 3 Sacramento P & DC
Bay-Valley/San Francisco 4 San Jose P & DC
PA Sierra Coastal 4 Van Nuys Main Office
Santa Ana 2 Anaheim P & DC
3 New Aliso Viejo Facility Project
San Diego 2 New Perris DPC Facility Project
Greensboro 2 Raleigh P & DC
2 Greensboro P & DC
CM Northern VA 4 Dulles P & DC
Richmond 4 New Richmond Facility Project
Capital 2 Curseen-Morris P & DC
Greater Indiana 2 Indianapolis MPA
Northern IL 3 Palatine P & DC
2 Carol Stream P & DC
GL
Central IL 2 Fox Valley P & DC
2 South Suburban P & DC
Southeast MI 2 New Royal Oak Facility Project
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National Postal Forum Dulles Pre-production Status
Installation Complete Oct 2007
Integration / Machine Testing Nov 2007
Live Mail Ramp-up Dec 2007
Feb /Apr
Field Pre-Test/Test 2008
Full Machine Ramp Up May 2008

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National Postal Forum Dulles Pre-Production FSS

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National Postal Forum Dulles: Pre-production FSS

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National Postal Forum Flat Sequencing System Overview
Tray
Staging
Flats Sorting
Machine
Dolly
Induct
Stand-
Alone Mail
Integrated Prep
Tray
Converter
Feeders /
Auto-
Induction
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National Postal Forum Stand-Alone Mail Prep Overview

ACTs
Dolly
Bundles and flat tubs are

prepped into Automation
Compatible Trays (ACTs) and
then loaded onto Dollies
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National Postal Forum Dolly Induct Process

Dolly Induct
Dolly
In-Feed Line ACTs

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National Postal Forum Infeed Line: Automated Feeder
Automated Feeder
Infeed Line Facts:
2 Infeed Lines per machine
2 Feeders per Infeed Line
3 Flats per Second per Feeder
6 Flats per Second per Infeed
12 Flats per second total

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National Postal Forum Infeed Line Functionality

Image Acquisition Module
6 piece per second processing rate

OCR / VCS System
Labeling Module
Labeler
Printer
Verifier
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National Postal Forum TOP 2000 Sorter
Sorter Facts:
2 levels, 2 sides
360 bins
Automated empty tray supply
Automated tray exchange
Automated full tray takeaway
Rigid Captive Tray (RCT)

Improves stack quality
Maintains mail sequence
Used within FSS only
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National Postal Forum Tray Staging
Tray Staging used between passes

Pass 1 to Pass 2
Pass 2 to Dispatch
Staging Capacity
768 Staging locations
360 Full Tray Accumulation Line
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National Postal Forum Integrated Tray Converter

Automating Second Pass Feeding
1st Pass Mail ACTs

In RCTs
Integrated Tray
Converter (ITC)
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National Postal Forum Integrated Tray Converter

Verticalizing Flats for Dispatch
Sequenced Mail
Street Trays
In Rigid Trays
Integrated Tray
Converter (ITC)
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National Postal Forum Tray Labeling and Container Loading
Street Trays are loaded

automatically into
rolling carts
Carrier Automated Street Tray Rack (CASTR)

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National Postal Forum Northern VA Delivery Operations

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National Postal Forum Manual Sequencing for Delivery

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National Postal Forum DPS Letters

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Fairfax – FSS DPS
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National Postal Forum Fairfax – FSS Route
Saturation
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National Postal Forum Fairfax – FSS Route

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National Postal Forum Reston – FSS DPS

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National Postal Forum Reston – FSS Route

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National Postal Forum FSS Production Roll-out
1st Production FSS – Dulles VA

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National Postal Forum FSS Production Roll-out
1st Production FSS – Dulles VA

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National Postal Forum Panel Members
Mike Winn
Director, Postal Affairs and Operations
R.R. Donnelley
Krista Finazzo
Manager, Operational Requirements and Integration
United States Postal Service
Steve Dearing
Manager, Intelligent Mail Planning & Standards
James West
Director, Postal and Government Affairs
Williams-Sonoma
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National Postal Forum Flats Sequencing System (FSS)
Tray
Staging
Flats Sorting
Machine
Dolly
Induct
Stand-
Alone Mail
Integrated Prep
Tray
Converter
Feeders /
Auto-
Induction
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National Postal Forum New Address Standards
New Standards for the Delivery Address are

Effective in March 2009 and Specify:
Minimum Type Size for All Commercial Flats
New Spacing Requirements for All Automation

Flats
Placement Within the Top Half of the Mailpiece

for All Commercial Flats Except First-class Mail
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Address Characteristics — Type Size and Spacing
0.125"
0.028"
0.028 "
0.028"
0.125"
Ideal Address: Uses Type Larger Than 8 Points, All Required/

Recommended Clear Spaces, and Arial Capital Letters
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Address Characteristics — Type Size and Spacing
Mailers May Use 6-point Type if a POSTNET or Intelligent

Mail Barcode with a Delivery-Point Routing Code is Used
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The Delivery Address Must be Entirely Within

The Top Half of The Mailpiece– the “Top” is:
Either of the Shorter Edges on Enveloped or

Poly-Wrapped Pieces
The Upper Edge When the Spine is Placed On

the Right-Hand Side of an Unenclosed Piece
Either of the Shorter Edges on all Carrier

Route (or ECR) Saturation Pieces
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Catalog Example
******** 5-DIGIT 98765
Top half ATTN: VICE PRESIDENT

ABC COMPANY
Bound edge
123 MAIN ST
ANYTOWN US 98765-4321
Usually Addressed on
Back Cover.
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Magazine Example
******** 5-DIGIT 98765

ATTN: VICE PRESIDENT
ABC COMPANY
123 MAIN ST
Top half Bound edge
Usually Addressed on
Front Cover
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Magazine in Polywrap Example
Top half
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
Often Addressed
on an Insert.
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Business Envelope Examples
Horizontal Format is Still Okay
Top half Top half
******** 5-DIGIT 98765

ABC COMPANY
123 MAIN ST
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National Postal Forum Resources
Postal Explorer
pe.usps.com
MailPro
usps.com/mailpro
DMM Advisory
dmmadvisory@usps.com
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Intelligent Mail® Barcode
Steve Dearing
Manager, Intelligent Mail Planning & Standards
USPS

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National Postal Forum Intelligent Mail® Barcode
Importance and Richness of the Intelligent

Mail Barcode
z Improved Tracking Intelligence
Can Uniquely Identify More Mailpieces
Enables Improved Customer Service
Enables Service Measurement
z Multiple Services through One Barcode
Provides More Real Estate for Mailpiece
Automation Discounts, One Code Confirm™, OneCode
ACS™
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National Postal Forum Intelligent Mail® Barcode
Challenges of the Intelligent Mail Barcode

z Worked With the Flat Mail Industry (IDEAlliance)
Tested Variable Print Speeds and Book
Thickness
Identified Inkjet Constraints
Modified Barcode Specifications
Shortened Height of Barcode
Reduced Barcode Clearance
Increased Void Tolerance
Retain Comparable Footprint of POSTNET™
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Customer Perspective & Challenges
James West
Director, Postal and Government Affairs
Williams-Sonoma

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National Postal Forum Customer Perspective and Challenges
Challenge to Creative Flexibility
z Compromise Prime Merchandising Space
z Hinder Creative Flexibility
z Address Orientation Within Address Area

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National Postal Forum Customer Perspective and Challenges
Value Challenge
z Sales Revenue vs. Mailing Requirement
z What is Our Other Option?
z Is This a Permanent Change?
z What is FSS and Why is it Important?

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USPS Engineering - Future Technology
Walt O’Tormey
Vice President, Engineering
USPS

Engineering Solutions
Bulk Flats Processing
Flats Postal Address

Redirection System
Bulk Flats Processing (BFP)
BULK FLATS PROCESSING & EQUIPMENT

HAVE EVOLVED TOGETHER
Manual Mechanized
Bulk Flats Processing
THE MAILING COMMUNITY & USPS ARE
EXPLORING FUTURE BULK FLATS PROCESSING
MTAC formed two subcommittees to review flat mail
preparation
z MTAC 96 – Adopt “Auto-Ready” Pallets
z MTAC 115 – In Process
“Auto-Ready” Pallet
BFP - Low Footprint
SAMP: 1410 sq ft
MANUAL
MECHANIZED BFP 1125 sq ft
AUTOMATED
Auto-Ready: 1 BFP and 1 SAMP Serves 2 FSS

MULTI-ZONE BFP IN DEVELOPMENT
De-palletize bundles
Bundle Buffer/Sort
Cut Straps Load ACTs
Stack ACTs
Make Dollies
FLATS PARS
Flats Postal Address Redirection System

PARS for Flats
Postal Address Redirection System for Flat Shaped Mail
Corrects Addresses Not Current
Corrects to the Finest Depth of Sort
AFSM Machines Will

Intercept
Process Return to Sender
Label and Print Current Address
FSS Will Intercept

Undelivered-As-Addressed
Undeliverable-as-addressed (UAA) mail

processing. Every year…
− 17% of population moves
− Resulting in 45 million change of address
requests
− 5-6 billion undeliverable-as-addressed
mailpieces
Forwarding Prior to FPARS
NY
LA
Recipient
moved!
MIAMI
FPARS Interception Solution
Recipient
moved, NY
intercept &
label
LA
MIAMI
FPARS
Schedule
Prototype Test Boston – February 08
FPARS Contract Award – Tentative, Fall 08
Field Test – Next Year

United States Postal Service - Engineering
Engineering Focus –
Provide Customer Benefits
Reduce Cycle Time – Service
Control Total Process Costs
Increase the Value of the Mail

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Sharon Daniel
Manager Mailing Standards
Krista Finazzo
Manager Operational Requirements and Integration
Joe Schick
Director Postal Affairs
Quad Graphics
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National Postal Forum FSS Mail Preparation — Focus
Match Mail Preparation and Entry to

Processing Needs
Manage Impact on Mailing Processes
Maintain Sufficient Pallet Volume
Sustain and Grow Flat Mail

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National Postal Forum FSS Mail Preparation — Pricing
Carrier Route Bundles & DDU Entry are Not

Needed in FSS Zones
Maintain Pricing Structure But Change Prep:
z FSS Zones
5D Bundle Contain 5D/CR/HD Pieces
DSCF Lowest Priced Entry Point
z Non-FSS Zones
Separate 5D/CR/HD Bundles
DDU Lowest Priced Entry Point For CR/HD
Pieces
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National Postal Forum Pallet Preparation
Bypass APPS
Enable Auto Induction
Create Efficient Preparation for Both

FSS and Non-FSS Mail
Maintain Sufficient Pallet Volume

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National Postal Forum Bundle Preparation
Strapping Only
No Counter-Stacking
Bundle Thickness to Maximize Mail into

Automation-Compatible Trays
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National Postal Forum Auto Prep Test
Auto-Ready Pallet Finished Product

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National Postal Forum End-to-End Solutions
Streamline and Simplify Mail Makeup
Reduce Number of Entry Points
Bypass Bundle and Sack Distribution

Where Possible
Automate Mail Preparation
Leverage Data Exchange

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Anita Pursley
Vice President, Postal Affairs
Quebecor World Logistics
Jeff Williamson
Manager, Network Development and Support
USPS
Tony Dobush
Partner
PLS-Midwest
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National Postal Forum Agenda
Integration of FSS into Network
Drop Shipment Changes
Network Strategy
Industry Challenges / Opportunities

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National Postal Forum Integration of FSS into USPS Network
Deploy to Multiple Types of Facilities
z Co-located with Bundle Distribution
z Co-located with P&DC Operations
z Stand Alone FSS Deployment

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National Postal Forum Integration of FSS into USPS Network
Transportation Flow To FSS

z End-to-End Product Through Existing Network
Transportation
z Drop Ship
Down Flow From Upstream Entry (BMC, ADC,
SCF)
Directly to FSS Site
Transportation From FSS to DDU – Based on
Density to Optimize Trip Utilization
z Direct to DDU
z Transfer Through P&DC
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National Postal Forum Drop Shipment Impacts
Objective is to Minimize the Number

Of Entry Points
Preparation Changes to Align With

FSS Schemes
Service Standards
CET
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National Postal Forum USPS Network Strategy
Objective:
z Create a Network That Produces

the Lowest Combined Cost for
USPS & Customers, and Improves
Consistency of Service
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National Postal Forum USPS Network Strategy
Focus on:
z Air Transportation
Reliable Low Cost Air Network
Reduce Air Mail Center (AMC) Operating Cost
z Processing & Distribution Center (P&DC)

Plant Consolidations
Eliminate Excess Processing Capacity
z Bulk Mail Centers (BMC)

Optimize Utilization of Key Assets
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National Postal Forum Industry Challenges / Opportunities
FSS in Multiple Facility Types

z Increase in Number of Entry Points
z Multiple Requirements for Drop Ship Entries
z CET Management for In-Home Planning
New Pallet Preparation Requirements

z Additional, Smaller Pallets
z Increased Number of Sacks
z Less Finer Level Sorted Pallets
z Additional Handling Costs
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National Postal Forum Industry Challenges / Opportunities
Co-Mail and Co-Palletization

z Value of Co-Mail Increases?
z Added Complexity
z Additional Space / Staging Requirements
Transportation
z Increased Costs – Fuel, Stop-off Charges
z Load Factor
z Load Stability
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National Postal Forum Summary
Despite Challenges, the Industry

Supports the FSS Initiative and the
USPS Objective of Creating a Network
that Produces the Lowest Combined
Cost for USPS & Customers and
Improves Consistency of Service
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Peter Moore
President, Peter Moore & Associates

Communication Team
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Cross-functional
► Industry
► Postal
Co-chairs
► Peter Moore – Industry (PJM@PeterMoore.com)
► John Nagla – Postal Service (john.nagla@usps.gov)

Purpose
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Develop Process to Facilitate FSS-

Related Communications Among
Key Stakeholders
► Customers – Mail Owners
► Mail Service Providers
► USPS
Initial Questions
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What data needs to be communicated?
Who needs to know?
What is the necessary timing? Frequency?
How well suited are existing

communication channels?
What changes and additions are needed?
How best to provide feedback?

Key Data
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FSS Deployment Schedule

Entry Points
Critical Entry Times
Mailing Standards
Mailpiece Design
Preparation Requirements
Establishing the Process
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Program Initialization
► Raise Awareness
► Create and Refine Data Structures And

Communication Channels
Deployment Of Machines Into New Areas
► Labeling, Transportation Changes
► Regional Effects – Local & Regional

Mailers
Short Term Objectives
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FSS Web Page

► Linkage from USPS.com, RIBBS, etc
► Specific Data
► Links to all Things FSS
Brochures
► Addressing
► Preparing for FSS
► Distribution Through BMEU, PCC, BSN

More Specifics
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Addressing Presentation
“Workshop-in-a-box”
► PowerPoint
► For use at PCCs, Industry Meetings, etc.
► Addressing, FSS, IMB
Speakers Bureau
► Industry Functions; e.g., Conferences
► USPS Functions; e.g., PCC meetings, Focus
Groups
Resources
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FSS Symposium DVD
Postal Explorer
PCC Insider
PCC Education
DMM Advisory
MailPro
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Flats Sequencing System

Overview
Presented by: <your name>

Agenda
Background
Flats Strategy
Flats Sequencing System (FSS) at a Glance
Deployment Timeline
FSS Equipment & Processing Strategy
Mailing Industry Impacts
Conclusion & Questions

2
The Strategic Transformation Plan
“Reduce the cost of meeting

universal service obligations
by focusing on major cost
drivers, especially delivery
operations. Fully capture
improvements from existing
equipment and technology
and target new investments to
further drive productivity
gains.”
3
What is Flat Mail?
Magazines
Large Envelopes
4
Catalogs
What is Delivery Point Sequencing
Technology Places Mail Pieces into Exact Order of

Delivery
USPS Has Sequenced Letters Since 1993
● Over $5 Billion Annual Savings
Flats Sequencing System

(FSS) Will Replicate for Flats
What we do Today for Letters
5
Annual Flats Volume
52 Billion Flats
FY 2007 (RPW)
First-Class
Mail
8% Standard
Mail
75%
Periodicals
17%
6
Delivery Handling of Flats Today
52 Billion Flats
Saturation
FSS
20% Target
Volume
Needs Casing
By Carrier
80%
7
USPS Salary & Benefits: $54 Billion
Mail Processing 22%
Support 0.9%
Other Functions 9%
Delivery 43%
Customer Service 16%
Maintenance 6%
Vehicle Services 2.4%
8
Source: 2006 Annual Report
Managing Delivery Costs
Successful Cost Management Over the

Last 10 Years
Will Continue to be Largest Cost Center
● Continued Delivery Point Growth
Ease Rate Pressure by Aggressive Cost

Reductions
9
Flats Sequencing Benefits
Minimize Carrier In-Office Time

● Substitute Technology for Manual Carrier Casing
Benefit From Street Opportunities
● Carriers Start Street Delivery Earlier
● Consistent Delivery Times
● Manage Growth
● Optimize Routes
Other Benefits
● Delivery Day Visibility
● Capture Real Estate Opportunities
10 ● Manage Vehicle Fleet
FSS Flats Strategy
Letters and Flats Sorted Separately

● DPS Letter Sorting Continues
● Flats Sequencing in Delivery Point Order
Saturation Mail Continues

Reengineer Our Processes for Handling
“Residual Volumes”
11
FSS Flats Strategy
TODAY TOMORROW
12
FSS at a Glance Flats Sequencing System
Tray Staging
Carousel-style
Sorter
Dolly Induction
Subsystem
Mail Prep
Subsystem
Integrated Tray
Converters
13 Automatic High
Speed Feeders
Deployment Timeline
Prototype – Indianapolis IN Apr 2006
BOG Approval 100 Production FSS Machines Dec 2006
Pre-production Install – Dulles P & DC Sept 2007
Production First Article Jul 2008
Phase 1 Deployment Begin Oct 2008
Phase 1 Deployment End Oct 2010
14
Phase 1 Deployment – 100 Systems
28 Districts
32 Processing Facilities (FSS Locations)
● 27 Existing Processing Centers
● 5 New Facilities
2 - 5 Systems per Facility
1,700+ Zones (and growing!)
15
#
FSS
Northern NJ 4 NJ BMC
NYM Long Island NY 3 Mid Island NY P & DC
Central NJ 3 Trenton NJ P & DC
Boston 3 Northwest Boston P & DC
Massachusetts 4 Middlesex Essex P & DC
NE
Connecticut 5 Springfield BMC
SE New England 3 Providence RI P & DC
EA Columbus 3 Former Columbus P & DC
South Florida 5 New Miami Facility Project

SE Atlanta 4 Atlanta BMC
Central Florida 4 Orlando P & DC
Colorado / Wyoming 5 Denver P & DC

WE Arizona 5 New West Valley (Phoenix) Facility Project
Mid America 2 Kansas City P & DC
16
#
FSS
Los Angeles 2 Herb Peck Annex
Sacramento 3 Sacramento P & DC
Bay-Valley/San Francisco 4 San Jose P & DC
PA Sierra Coastal 4 Van Nuys Main Office
Santa Ana 3 New Aliso Viejo Facility Project
2 Anaheim
San Diego 2 New Perris DPC Facility Project
Greensboro 2 Raleigh P & DC

2 Greensboro P & DC
CM Northern VA 4 Dulles P & DC
Richmond 4 New Richmond Facility Project
Capital 2 Curseen-Morris P & DC
Greater Indiana 2 Indianapolis MPA

Northern IL 3 Palatine P & DC
2 Carol Stream P & DC
GL
Central IL 2 Fox Valley P & DC
2 South Suburban P & DC
Southeast MI 2 New Royal Oak Facility Project
17
New Equipment – Flat Trays
Tray Type Contents Where used
Automation Mail preparation

Mail to be
Compatible Tray Automated Induction
sequenced
(ACT) (ai)
12” mail
16”x16.25”x10.4” ITC output
1st pass & 2nd Sorter outputs

Rigid Captive Tray pass in process In process tray
(RCT) mail staging
19” x 13.75”x 12” Sequenced mail ITC Input
9” mail
Verticalized mail ITC output dispatch

Street Tray
for carrier Dispatch
17.83”x12.125”x6”
15” mail Mail Carrier
18
Prototype Trays – Under Development
New Equipment - FSS Street Tray
19
Prototype – Under Development
New Equipment - Dolly
20
New Equipment - Transport
21
Carrier Automation Street Tray Rack (CASTR)
Potential New Equipment –
Vehicle Stowage & Retrieval
22 Vehicle Stowage & Retrieval System

FSS Processing Strategy
17 Hour Run Day (Operating Window)
280,500 Sequenced Pieces Per Day Per Machine
1st and 2nd Pass are Run Consecutively
Each Zone Will be Run Once a Day
One Dispatch Per Day Per Zone (other than FCM)
FCM May Not be in DPS based on FSS Operating

Window and Mail Availability
23
Mailing Industry Impacts
1. Increase Customer-Applied Delivery Point Barcodes
2. Improve Address and Barcode Readability
3. Standard Address Placement
4. Evolving Standards for Machinability
5. Match Mail Preparation Requirements to Processing

Needs
6. Changes in Entry Points and Critical Entry Times

24
Increase Customer Applied Delivery Point Barcodes
5-digit
<1% No Barcode
7%
● Transition from 9-Digit to
11-Digit
● Move From 11-Digit to 9-digit

Intelligent Mail Barcode 33%
● Intelligent Mail Barcode

is Available Now for Flats
11-digit
60%
2007 Flat Barcode Analysis

Barcode sampling results - January 2007
25
Improve Address Readability
Address Format Improvements

● 8-Point Font Size (at least 0.080 inch tall)
● Horizontal and Vertical Character Spacing
● Maximum 5 blank spaces
● Prefer sans-serif type font
● Prefer all capital letters
26
Standard Address Placement
Orient Address for Carrier Street Handling

Implement MTAC Workgroup 101 Results
• This could represent the front or

Anywhere, USA 12345
Anywhere, USA 12345

123 Main St
John Doe
John Doe 123 Main St
Anywhere, USA 12345
123 Main St
back cover of the mailpiece.

John Doe
• For enveloped or polywrapped

pieces, the top is either of the
Can be left or right shorter edges.
justified, or centered.
Can face left or right • Delivery address and optional
delivery endorsement can
appear anywhere in the address
zone (top half above the dotted
line) when the bound edge is
Anywhere, USA 12345
123 Main St
John Doe
Address cannot read aligned to the right.

upside-down in relation to
the top edge. • Customer number, source code,
and messaging can appear
anywhere on catalogs.
Bound edge
on right
27
New Placement Standards
The new address placement standards apply to all

presorted, automation, and carrier route Periodicals,
Standard Mail, and Package Services flats.
Address must be in top half of mailpiece.
Vertical address may cross midpoint if placed within 1

inch of top edge.
When the address is on an insert polywrapped with the

host piece, the address must maintain placement
throughout processing and delivery.
28
Address Format
One-inch label using 10-point type and

all required/recommended clear spaces.
29
Address Format
Eight-point type.
Six-point type.
30
New Formatting Standards
All commercial flats must be addressed using at least 8-

point type (each letter or figure must be at least 0.080 inch
high).
Flats using 11-digit POSTNET barcode or Intelligent Mail
barcode may use 6-point type (each letter or figure must
be at least 0.065 inch high).
Address characters cannot overlap. Address lines cannot
touch or overlap (0.028-inch clearance preferred).
Address elements may be separated by no more than five
blank spaces.
Sans-serif font and all capital letters preferred.
31
Evolving Standards for Machinability
Automation Flats
● Flexible
● Rectangular
● Uniformly Thick
Polywrap Standards
32
Match Mail Preparation Requirements to Processing Needs
Shift from CR-RT Presort to FSS Scheme Sort for FSS Zones
Evaluate the Preparation of FSS Bundles on Pallets, Each With
One or Multiple Set of FSS Schemes
Evaluate Non-compensated FSS Scheme Bundles– Secured by
One or Two Straps
Target the Use of APPS for the CR-RT and 5-Digit (Non-FSS), 3-
Digit, and ADC Bundles to the Greatest Extent Possible
Promote Co-palletization
Promote Co-mailing
Continue to Promote the Drop-shipment of Flats Deep into the
USPS System
33
Changes in Entry Points and Critical Entry Times
The Postal Service is Optimizing the Co-location of

FSS, APPS, and AFSM 100 Machines Where Space
Allows
Objective is to Consolidate the Entry of Flats to

Facilitate More Efficient Processing Through the Use
of APPS and the FSS Equipment
Evaluate Critical Entry Times (CET) for Flats
34
Summary – Flats Supply Chain Vision
Drive Down Costs Through Automation
Enable Future Growth
Improve Processing Performance and Service
End-to-End Visibility
Create Lowest-Combined-Cost System
35
36
New Address Standards
for
Commercial Flat-Size Mail
Agenda
Address Characteristics
Address Placement (“top half” rule)
Federal Register Overview
Mailpiece Examples
Frequently Asked Questions
Implementation
Questions and Feedback
New Address Standards for Commercial Flat-Size Mail 2

New standards for commercial flats specify

three things:
The address must be big enough.
The address must be spaced properly.
The address must be placed within the
top half of the mailpiece.

The “delivery address” is:

Recipient
Street address lines
City, state, ZIP Code
SUE SMITH, PRESIDENT
CAPITAL CORPORATION
123 MAIN ST STE 3B
ANYTOWN, US 12345-1234

New standards ensure readable addresses

for:
Accurate sorting
Accurate delivery
Accurate redirection
Speedy service

Address Characteristics — Minimum Size
All presorted and carrier route flats must be

addressed using at least 8-point type.
► Each letter or figure must be at least
0.080 inch high.
Flats using an 11-digit POSTNET or an Intelligent

Mail barcode may use 6-point type if the address
is printed in all capital letters.
► Each letter or figure must be at least
0.065 inch high.
Address Characteristics — Style
Two preferences for best read rates:

Sans-serif font (Arial, Helvetica).
ALL CAPITAL LETTERS.

Address Characteristics — Spacing
Additional standards for automation pieces

only:
Address characters cannot overlap.
Address lines cannot touch or overlap
(0.028-inch clearance preferred).
Address elements may be separated by no
more than five blank spaces.

One-inch label using 10-point type, all

required/recommended clear spaces, and
Arial capital letters.

In summary:
The address must be big enough on all
commercial (“bulk mail”) flats.
The address must be spaced properly on all
automation flats.

Address Placement
The new placement standards apply to all

Periodicals, Standard Mail, and Package
Services flats mailed at presort, carrier
route, and automation prices.
They do not apply to First-Class Mail!

Address Placement
The delivery address must be entirely within

the top half of the mailpiece.

Address Placement — Enclosed Flat

Address Placement — Unenclosed Flat

Address Placement
The “top” is:

Either of the shorter edges on enveloped or
polywrapped pieces.
The upper edge when the spine is placed on the
right-hand side of an unenclosed piece.
Either of the shorter edges on all Carrier Route
(or ECR) Saturation pieces.

Address Placement
When the address is on an insert polywrapped

with the host piece, the address must
remain within the top half throughout
processing and delivery.

Address Placement
“Vertical” address may cross midpoint if it begins

or ends within 1 inch of top edge.
Important for digests
Anywhere, USA 12345

and other small flats.
123 Main St
John Doe
Small flat

Federal Register Notice
Final rule available on Postal Explorer

(pe.usps.com):
Click on “Federal Register” in the left frame.
Scroll down to the “New Address
Requirements…” notice.
Use PDF or Word files because they include the
graphics (the “text” file is text only).

Federal Register Notice
Final rule consists of four parts:

Supplementary Information — a narrative
summary of the new rule.
Summary of Comments — responds to
comments on the proposal.
Summary of Changes from Proposed to Final
Rule — how the final rule differs from the
proposal.
Revisions to the Domestic Mail Manual.

Address Placement — Catalog
Example
******** 5-DIGIT 98765
Top half ATTN: VICE PRESIDENT

ABC COMPANY
Bound edge
123 MAIN ST
Usually addressed
on back cover:

Address Placement — Magazine
Example
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
Top half Bound edge
Usually addressed
on front cover:

Address Placement — Magazine in Polywrap
Example
Top half
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
Often addressed
on an insert:

Address Placement — Business Envelope
Examples
Horizontal format is fine:
Top half Top half
******** 5-DIGIT 98765

ABC COMPANY
123 MAIN ST

Address Placement — Step-by-Step
Identify the “top” of the mailpiece:

► Either of the shorter edges, or the upper
edge with the spine on the right.
► Front or back of the mailpiece.
► The “top” has nothing to do with the
printing on the piece or how it is
constructed. Pretend the mailpiece is a
blank object.

Address Placement — Step-by-Step
Define the “top half.” Fold and crease the

piece, or measure with a ruler.
Place the delivery address entirely in the top
half. It can be parallel or perpendicular to the
top edge, but not upside-down.
Done with “top”! Now place the postage and
return address in relation to delivery address
as it is read (postage to the right or upper
right, return address to the upper left).

Address Placement
Recap
No
123 MAIN ST
Yes ABC COMPANY

******** 5-DIGIT 98765
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
Yes
******** 5-DIGIT 98765
Top half Bound edge
123 MAIN ST
ABC COMPANY
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
Yes
Yes ******** 5-DIGIT 98765
123 MAIN ST
ABC COMPANY
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
******** 5-DIGIT 98765

No
123 MAIN ST
ABC COMPANY
******** 5-DIGIT 98765
ABC COMPANY
123 MAIN ST
No
No

FAQs
The new standards DO NOT apply to letters

mailed at letter prices or parcels mailed at
parcel or NFM prices. They DO NOT apply to
any type of single-piece mail.
They DO apply to pieces mailed at flats prices
because of weight or thickness.
They DO apply to “letters” or “cards”
polywrapped with and carrying the address for
a flat-size host piece.

FAQs
The new standards do not change:

The existing standards for use of a return
address. Best placement is still to the upper left
of the delivery address.
► Refer to Publication 177 on www.usps.com.
The existing standards for barcode placement.
The existing four options for indicia placement.

Implementation
Final rule effective on March 29, 2009:

DMM will be updated on that day.
Implementation materials:
► Customer presentations (PCC Workshop, etc.)
► MailPro articles
► New Quick Service Guide
► New fact sheets and posters

Implementation
Local Mailpiece Design Analysts can help with

specific designs.
► Use MDA lookup tool on Postal Explorer (click
“Postal Links” in the left frame).
Mailers in the National Customer Rulings
program can request a written, pre-production
decision from the Pricing and Classification
Service Center.
► More info on Postal Explorer (click “PCSC” in the
left frame).

Resources
Postal Explorer
pe.usps.com
MailPro
usps.com/mailpro
DMM Advisory
dmmadvisory@usps.com

FSS Symposium 2008

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Flats Symposium Agenda

National Postal Forum 2008

10:30 am Keynote - USPS Flats Strategy Bill Galligan

12:00 pm Future Technology for the Flats World Walt O’Tormey

12:15 pm Lunch Break

3:00 pm Afternoon Break

FSS Communication Workgroup Introduction and Peter Moore

4:15 pm Wrap-up Mike Winn

Speakers Title & Company Information on the Next Page

Bill Galligan Walt O’Tormey

Rosa Fulton Mike Winn

Tom Foti Jack Widener

Steve Dearing Joe Schick

Brent Raney Anita Pursley

Krista Finazzo James West

Sharon Daniel Tony Dobush

Jeff Williamson Peter Moore

Flats Symposium 2008

National Postal Forum 2008

National Postal Forum

National Postal Forum USPS Salary & Benefits: $54 Billion

Mail Processing 22%

Customer Service 16%

Source: 2007 Annual Report

National Postal Forum Managing Delivery Costs

 Incremental Cost Improvements Over the

 Delivery Will Continue to be Largest Cost

 Continued Delivery Point Growth

 Address Infrastructure Burden

National Postal Forum What is Delivery Point Sequencing?

Technology Places Mail Pieces

DPS Letter and Cased Volume History (City Delivery) 87%

50.0 • USPS Has Sequenced Letters

National Postal Forum Replicate Letter Mail Success for Flats

National Postal Forum

National Postal Forum

National Postal Forum Flats End-to-End Strategy

 Streamline and Simplify Mail Make-up

 Reduce Number of Entry Points

 Induct the Mail Where Processed

 Bypass Sack / Bundle Distribution

 Automate Mail Preparation

 Automate Sequencing of Flats for Delivery

 Leverage the Use of Data

National Postal Forum Mailer Changes

• Critical Entry Times

3. Mail Prep in FSS Environment

National Postal Forum FSS Benefits

 Substitute Technology for Manual Labor

 Manage Delivery Growth

 Reduction in Future Delivery Vehicles

 Reduction in Facility (Delivery Unit)

 Improve Processing Performance and

 Create Lowest-Combined-Cost System

Flats Symposium 2008

National Postal Forum 2008

National Postal Forum Agenda

 Overall Program Timeline

 Prototype FSS Test

 Pre-Production FSS Status Dulles VA

 FSS System Overview

National Postal Forum Multi Phase Development / Deployment

Prototype – Indianapolis IN Apr 2006

BOG Approval 100 Production FSS Machines Dec 2006

Incremental Cost Improvements Over the

Delivery Will Continue to be Largest Cost

Continued Delivery Point Growth

Address Infrastructure Burden

Streamline and Simplify Mail Make-up

Reduce Number of Entry Points

Induct the Mail Where Processed

Bypass Sack / Bundle Distribution

Automate Mail Preparation

Automate Sequencing of Flats for Delivery

Leverage the Use of Data

Substitute Technology for Manual Labor

Manage Delivery Growth

Reduction in Future Delivery Vehicles

Reduction in Facility (Delivery Unit)

Improve Processing Performance and

Create Lowest-Combined-Cost System

Overall Program Timeline

Prototype FSS Test

Pre-Production FSS Status Dulles VA

FSS System Overview

FSS Machine Location

33 Processing Facilities (FSS Locations)

2 - 5 Systems per Facility

2 Feeders per Infeed Line

3 Flats per Second per Feeder

6 Flats per Second per Infeed

12 Flats per second total

6 piece per second processing rate