®

Flats Sequencing System(FSS)

Flats Sequencing System(FSS)

November 20, 2008November 20, 2008November 20, 2008November 20, 2008

Rosa FultonRosa Fulton

Phil FabrizioPhil Fabrizio

AgendaAgenda

FSS Pre-production / Production

Flat Volume Update

Phase 1 Capacity Review

● Forecasting for Change

Flats Track – National Postal Forum 2009

Pre-production & Production Program UpdatePre-production & Production Program Update

Dulles P &DCDulles P &DC

Dulles FSS StatusDulles FSS Status

Preprod FSS Install & Operational Complete

1st Production FSS Install & Ramp-up Complete

Production Pre-Test In-progress

Acceptance Test Nov 24th

2nd Production FSS Installation In-progress

3rd Production FSS Installation Nov 2008

Dulles Operational Ramp-upDulles Operational Ramp-up

Production FSS Seven Sort Schemes

● 10 Delivery Units

● 19 Zones

Sort Scheme Zones

Reston Annex 20191, 20194

Fairfax Main 22030, 22035, 22038

Sterling MainReston Main

20164, 2016720190, 20195

McLean 22101, 22109

BurkeCulpeper

22009, 2201522701

Alexandria – Belle ViewAlexandria – Engleside

2230722309

Falls Church 22040, 22043, 22046

Preproduction FSS Four Sort Schemes

● 3 Delivery Units

● 4 Zones

Sort Scheme Zones

Arlington - South 22204

Arlington – North 22207

Manassas 20109

Manassas 20110

FY 2008 SPLY Comparison FY 2008 SPLY Comparison

RPWMonthly - Total Flat VolumeFY 2007 / FY 2008 - Comparison

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Pie

ces

(000

)

FY 2007 5,831,920 5,188,039 3,941,061 4,423,839 4,029,330 4,610,545 4,374,478 4,213,254 3,686,106 3,763,803 4,287,702 4,060,164

FY 2008 4,985,502 4,727,329 3,521,277 3,950,168 3,715,010 3,843,851 3,908,920 3,694,561 3,257,217 3,483,190 3,672,144 3,806,478

Amount Change (846,418) (460,710) (419,784) (473,671) (314,320) (766,694) (465,557) (518,693) (428,889) (280,613) (615,558) (253,686)

Percent Change (14.5) (8.9) (10.7) (10.7) (7.8) (16.6) (10.6) (12.3) (11.6) (7.5) (14.4) (6.2)

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

First Class Periodicals Standard Total Flats

2007 4,080,168 8,664,060 39,042,289 52,410,240

2008 3,462,942 8,466,043 34,107,189 46,610,045

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

Piec

es (0

00)

FY 2008 Total Flat Volume & Volume by ClassComparison to SPLY

-15.1

-11.1

-2.3

-12.6

FY 2008 SPLY Comparison FY 2008 SPLY Comparison

FY 2008 YTD Total Flat Volume Decline

-11.1%FY 2008 YTD Total Flat Volume Decline

-11.1%

RPW

Decline-5.8

Billion Flats

Decline-5.8

Billion Flats

FY 2008 SPLY Comparison FY 2008 SPLY Comparison

RPW

20

25

30

35

40

45

50

55

60

Flats Yearly Volume Trend2001-2008

Flat Vol. Billions 58.2 57.8 51.7 52.4 53.9 53.8 52.4 46.6

2001 2002 2003 2004 2005 2006 2007 2008

Lowest Volume Since 1997Lowest Volume Since 1997

Flat Volume 2006 – 2008 Comparison Flat Volume 2006 – 2008 Comparison

2006 2007 2008

53.8 Billion 52.4 Billion 46.6 Billion

Flat Volume Decline-1.4 billion

Flat Volume Decline-5.8 billion

-2.6% -11.1%

Zones Required to Support 100 FSS

1,300 1800 2400+

Original FSS Capacity ModelOriginal FSS Capacity Model

Capacity ReviewCapacity ReviewCapacity ReviewCapacity Review

Baseline Model - 2006

Recast Model with 2007, then 2008 Data

Candidate Zone Criteria for 32 FSS Sites

8,943 Zones Expanded to 12,460 Zones

Sweet Spot Focus on 2,484 Zones

FSS Scheduler Activities for 100 FSS

Capacity Scenario Based on 2008 Actual Data

What If - Sensitivity AnalysisWhat If - Sensitivity AnalysisWhat If - Sensitivity AnalysisWhat If - Sensitivity Analysis

Applied Volume Loss Sensitivities

● Possible Incremental Declines

Scenarios Performed

● Over-deployment Risks Identified

● Implementation Scheduling Impacts

Modeled Loss Scenarios for all 32 Sites

Identified Low, Medium and High Risk Sites

Identified Reaction Timelines

Next StepsNext Steps

Due Diligence Trigger Points

Deeper Dive Highest Risks

Developed an Early Warning System

Identified Alternate (Phase 1A – 2) Sites

Last Resort - Redeploy, if/when Necessary

National Postal Forum 2009 PlanningNational Postal Forum 2009 Planning

National Postal Forum

®

®

Flats Track Proposal – NPF 2009 Flats Track Proposal – NPF 2009

Combine Periodical Track, Printer Track and Flats Symposium into One Flats Track

Target Workshops to Support all Flat Mailers

Total of 12 Workshops

Certificate Program

● Participants Required to Attend a Total of 4 Workshops and the Tuesday General Session to Receive Certificate

NPF 2009 - Flats TrackNPF 2009 - Flats Track

Workshop # 1 2 3 4 5 6

WorkshopTitle

USPSFlats

Strategy

AddressingStandardsfor Flats

(Includes IMB)

Future Prep& Entry for

Flats

Co-mailCo-Pallet

Co-Binding

The Skinnyon

Slim Jims

Future of

Catalogs

TargetAudience

Periodical Mailers Periodical Mailers Periodical Mailers Periodical Mailers

Catalog Mailers Catalog Mailers Catalog Mailers Catalog Mailers Catalog Mailers Catalog Mailers

Printers Printers Printers Printers Printers Printers

Proposed Workshops

Workshop # 7 8 9 10 11 12

WorkshopTitle

Building YourPeriodical Business

Optimizing Postage

Savings, Small Volume

Periodicals

PeriodicalPricing

Managing Postal

Budget & Cost Reduction

Opportunities

Nuts & Boltsof

Periodicals

Printers Expand into

Mailing10 Steps to

Success

TargetAudience

Periodical Mailers Periodical Mailers Periodical Mailers Periodical Mailers Periodical Mailers

Printers

Flats Track Proposal – NPF 2009 Flats Track Proposal – NPF 2009

Finalize Workshop Descriptions

Finalize Speakers

Finalize Format of Each Workshop

Next StepsNext Steps

ConclusionConclusion