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1 I NTERNATIONAL & E XTRA S ERVICES R2006-1 Rate Case Training Course #40201-29

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2 Agenda International Services that will be eliminated Why are rates changing? International Highlights Domestic Extra Services

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3 International Product Changes Eliminated the following services which have low market demand and/or 24 to 42 day (delivery) service: - Economy Parcel Post - Economy Letter-post - Publishers Periodicals - Books and Sheet Music - Economy M-bags - Aerogrammes

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4 Publishers Periodicals Books & Sheet Music Significant Changes Publishers Periodicals discontinued Books and Sheet Music discontinued

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5 Why Change Prices First price restructuring since 2001 Costs going up Changes in postal operations and the market Pricing will track the Consumer Price Index (CPI) over time

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6 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS product prices below the competition Summary of New products and services Additional Services Mail Classification Decisions Extra Services

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7 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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8 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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9 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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10 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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11 International Product and Price Initiatives Examples of Comparable Products of Competition USPSFedEX EMI 1-pound to Japan $22.55 Economy 1- pound to Japan $48.00 GXG 20-pounds to Australia $174.00 Priority 20-pounds to Australia $220.75

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12 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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13 Global Express Guaranteed Express Mail International Priority Mail International First Class Mail International GXG document GXG non-document Global Express Mail Airmail Parcel Post Economy Parcel Post Global Priority Mail Airmail Letter Post Economy Letter Post International Highlights Services TodayServices Tomorrow

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14 Current ProductR2006-1 Product Offering Economy Parcel PostPriority Mail International Economy Letter Post First Class Mail International or Priority Mail International Economy Registered ServiceAir Registered Service AerogrammeAir Letter Post Economy PublishersInternational Surface Air Lift Economy Books and Sheet MusicInternational Surface Air Lift Recorded DeliveryAir Registered Service Retail Products to Be Affected

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15 International Priority Airmail (IPA) International Surface Airlift (ISAL) ISAL M-Bag Service Global Shipping Solutions (GSS) FY 2007 Change: Price Increase Only No Change to Product Offering Commercial Products

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16 Global Express Guaranteed (GXG) The Postal Service is simplifying the pricing structure of Global Express Guaranteed by combining the existing document and non-document price structure into one.

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17 Express Mail International Regrouped country rate groups Offer two flat-rate envelope prices More specific service standards

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18 Priority Mail International New service combines three old services One flat-rate envelope Two flat-rate boxes Parcel post

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19 Priority Mail International More time specific service standards Regrouped country rate groups Tracking information and extra services

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20 First-Class Mail International New service combines, airmail letters, economy letters and aerogrammes For letters, postcards and other items up to 4 pounds Priced lower than GXG, Express Mail International and Priority Mail International

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21 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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22 International Highlights M-bags, direct sacks of printed matter to one addressee International Priority Airmail (IPA), bulk air letter service for First-Class Mail International International Surface Air Lift International Surface Air Lift M-bags M-Bag

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23 Free Matter for the Blind Key Points Must be marked Free Matter for the Blind Postage rate for an eligible item is: - free when sent at First-Class Mail International - applicable rate based on weight for other services Registered Mail and Insurance only Extra Service allowed

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24 Postage Statement New PS Form 3700 One form for all International Mailings Complete one part per mailing each part except Part S requires a separate PS Form 3700 be completed

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25 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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26 Rulings Standards are in the International Mail Manual Critical role of Manager Business Mail Entry Revenue Deficiencies

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27 Appeals When a customer disagrees with a mail classification decision made at the local level, they can appeal that decision to the Pricing & Classification Service Center (PCSC). They address the appeal to the district Manager Business Mail Entry who gathers additional information, if necessary, and forwards all documents to the PCSC.

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28 Requests for Exception Background Request Format Authorization

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29 International Highlights Clear-cut easy to use products Four new international products Available online tools Recognizable packaging USPS products prices below the competition Summary of new products and services Additional services Mail classification decisions Extra Services

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30 Recorded Delivery which is the International equivalent to Certified Mail Registered Mail is the alternative service Barcodes on insured pieces No signature indemnity of $200 or less Updated indemnity claim standards New prices for many services Overview of International Extra Services

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31 Extra Services

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32 Extra Services Strategy What we want to accomplish Effectiveness & Efficiency Keep costs low

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33 Domestic Extra Services Significant Changes New low-cost OneCode Address Change Service for letters Changes to Confirm Service Redesigned Insurance Changes to Extra Services such as Return Receipt fee Continue to realign Post Office Box fees

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34 Extra Services Examples OneCode ACS Fees CurrentNew Automated First-Class Mail (letters only) First two notices, each N/A 0000 Additional notices, each N/A 5555 Automated Standard Mail (letters only) First two notices, each N/A 2222 Additional notices, each N/A 15

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35 Extra Services - Examples ACS Fees CurrentNew Electronic ACS notifications (First-Class Mail) 21 6666 Electronic ACS notifications (other classes) 21 25 Manual (paper) notifications (all classes) 75 50

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36 Mailer Services - Standard Mail (UAA) Return Service Requested Undeliverable As Addressed (UAA) mail is disposed of as waste UNLESS it bears a correct Ancillary Service Endorsement (ASE) Standard Mail mailpieces bearing the ASE Return Service Requested will be charged the weighted fee for UAA mailpieces.

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37 Mailer Services - Standard Mail (UAA) Return Service Requested TThe weighted fee is 2.472 times the applicable First-Class Mail or Priority Mail rate of postage. CCards will be returned for $.65 each RReturn of a 1 ounce mailpiece is $1.02 ((2.472 x.41 = 1.013...which is rounded up to $1.02)

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38 Mailer Services - Standard Mail (UAA) Address Service Requested Mailpieces endorsed Address Service Requested that are UAA and there is no COA on file will be returned to the sender and the weighted fee will be charged. A section of the weighted fee table is on slide 48. The entire table is located at http://56.64.130.18/marketing2/ under Webcast Presentationshttp://56.64.130.18/marketing2/

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39 Mailer Services - Standard Mail (UAA) Address Service Requested Mailpieces endorsed Address Service Requested that are UAA and there is a COA on file will be forwarded and the mailer will be sent a manual 3579 and charged $.50. If the mailer is a OneCode ACS participant, the rates are outlined on slide 34 Rates for ACS are on slide 35

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40 Confirm Service Confirm Current Subscription Level Fee and Term Additional Scans Silver Up to 15M Scans $2,000 3 Months $500 2 million Gold Up to 50M Scans $4,500 12 Months $750 6 million Platinum Unlimited Scans $10,000 12 Months N/A Confirm New Subscription Level Fee and Term Additional Scans Silver Up to 15M Scans $2,000 3 Months $500 2 million Gold Up to 50M Scans $6,000 12 Months $750 6 million Platinum Unlimited Scans $19,500 12 Months N/A Additional Subscriber IDs Current New Quarter $500 $750 Annual $2,000

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41 Domestic Insurance AAll items barcoded NNew insurance prices: $0.01 to $50 will increase to $1.65(From $1.35) $50.01 to $100 will decrease to $2.05(From $2.30) $100.01 to $200 will decrease to $2.45(From $3.35) $200.01 to $300 will increase to $4.60(From $4.40) Cost per additional $100 of insurance will decrease to $0.90 (From $1.05)

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42 Domestic Insurance Online Claims Customers who purchase domestic insurance online through Click-N- Ship or eBay will be able to file their claims online at www.usps.com/insurance. www.usps.com

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43 Extra Services -- Examples Item CurrentNew Certified Mail $2.40 $2.65 Express Mail Insurance ($100 to $200) $1.05 75 Return Receipt (paper copy) $1.85 $2.15 Return Receipt (electronic) $1.35 85 Permit imprint and annual mailing fees $160 $175 Annual accounting fee $500 $550

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44 Extra Services Fees Service Current FeeNew Fee Express Mail Insurance $100.01 to $200 $1.05 $0.75 Registered Mail $0.0 Declared Value $7.90 $9.50 Registered Mail $0.01 to $100 $8.45 $10.15 PO Box lock replacement$11.60 $14.00 Domestic Money Order $0.01 to $500.00 $0.95 $1.05 Return Receipt Electronic $1.35 $0.85

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45 Extra Services on PostalOne! Fixed rates will be updated

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46 PO Box Service Post Office Box fees are realigned to better reflect the costs the Postal Service incurs for each individual location. Caller Service fees are also realigned into the same fee groups as PO Boxes. Instead of one set price for caller service, prices will range from $370 to $630 for each 6-month period.

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47 PO Box/Caller Service Fees Fee GroupPO Box FeeCaller Service 1$42 to $390$630 2$35 to $326$550 3$28 to $250$485 4$20 to $196$475 5$18 to $148$465 6$13 to $110$415 7$10 to $ 86$370 E$ 0 to $ 0No Caller SVC PO Box fees listed are for Box Sizes 1 and 5 Fee group E locations are determined by USPS

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48 Weighted Fee Table Single-Piece Weight Not Over (ounces) Weighted Fee per Piece LETTERS Weighted Fee per Piece FLATS Weighted Fee per Piece -- PARCELS Card Rate$ 0.65 1 ounce$ 1.02$ 1.98$ 2.80 2 ounces$ 1.44$ 2.40$ 3.22 3 ounces$ 1.86$ 2.82$ 3.64 4 ounces$ 2.28$ 3.24$ 4.06 The complete table is located at http://56.64.130.18/marketing2; click on Webcast Presentations. http://56.64.130.18/marketing2

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50 Communicating usps.com/ratecase DMM Advisory dmmadvisory@usps.com MailPro usps.com/mailpro mncsc@usps.com Federal Register usps.com/ratecase BMA Newsletter bmanewslettersubscribe@usps.gov bmanewslettersubscribe@usps.gov Area/District Rate Case Implementation teams

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51 Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions? Questions ? Questions? Questions? Questions ? Questions? Questions? Questions? Questions? Questions? Questions? Questions?

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52 Questions & Answers Q. What flat-rate options will be available for International Mailing? A. Flat-rate Express Mail International Envelope Flat-rate Priority Mail International Envelope (4 pound limit) Flat-rate Priority Mail International Box (2 sizes) (20 pound limit or country listing weight limit, whichever is less)

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53 Questions & Answers Q. Without Publishers Periodicals rates, what options will these mailers have? A. Publishers Periodicals, Books and Sheet Music, and International Surface Air Lift were combined into the new ISAL service a bulk mailing service for First-Class Mail International items. ISAL does require a 50- pound minimum per mailing. Single-piece mailing options would be First-Class Mail International and Priority Mail International.

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54 Questions & Answers Q. Other than rates, will there be any other changes to IPA and ISAL? A. No Q.Will there still be a nonmachinable surcharge for letters? A. Yes, the nonmachinable surcharge for First-Class Mail International letters weighing 1 ounce or less is increased to $0.17.

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55 Questions & Answers Q.Will there be a new Postage Statement? A. Yes, there will be only one International Postage Statement, PS Form 3700. It will consist of nine pages and be broken down as below: Part A - First-Class Mail International including M-Bag Part B - International Surface Airlift (ISAL) including ISAL M- Bag Part C - International Priority Airmail (IPA) including IPA M-Bag Part D - Priority Mail International Part S - Extra Services Part E - Global Shipping Solutions - International Commercial Packages Part F - Global Direct - Canada Admail Part G - Global Direct - Canada Publications Mail Part H - Global Bulk Economy Mail

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56 Questions & Answers 1.OneCode ACS is for customers using the _________ Barcode? A.UCC/EAN 128 B.Intelligent Mail Barcode C.POSTNET Barcode D.All of the Above

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57 Questions & Answers 1.OneCode ACS is for customers using the _________ Barcode? A.UCC/EAN 128 Barcode B.Intelligent Mail Barcode C.POSTNET Barcode D.All of the Above

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58 Questions & Answers 2.For Mailer Services, Standard Mail Return Service Requested, the weighted fee is __________ times the applicable First-Class or Priority Mail Rate of the Postage? A.2.742 B.4.247 C.2.427 D.2.472

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59 Questions & Answers 2.For Mailer Services, Standard Mail Return Service Requested, the weighted fee is __________ times the applicable First-Class or Priority Mail Rate of the Postage? A.2.742 B.4.247 C.2.427 D.2.472

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60 Questions & Answers 3.Permit Imprint application fees and all annual mailing fees will increase form $160 to ____________? A.$170.00 B.$175.00 C.$180.00 D.$185.00 E.The Rates Will Decrease

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61 Questions & Answers 3.Permit Imprint application fees and all annual mailing fees will increase form $160 to ____________? A.$170.00 B.$175.00 C.$180.00 D.$185.00 E.The Rates Will Decrease

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62 Questions & Answers 4.Part of our Strategy as a business is to maximize our _______________ and _______________.

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63 Questions & Answers 4. Part of our Strategy as a business is to maximize our efficiency and effectiveness.

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64 Questions & Answers 5.First-Class mailers who participate in Address Change Service (ACS), which is an manual/paper address correction notice will see a considerable decrease in the new fees. A.True B.False

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65 Questions & Answers 5.First-Class mailers who participate in Address Change Service (ACS), which is an manual/paper address correction notice will see a considerable decrease in the new fees. A.True B.False -

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66 Thank You!