Mail Transport equipment

1. Pacific Area Focus Group Mail Transport equipment MTe 1

2. Mail Transport Equipment • Strong Equipment Inventories • Inventories continue to exceed demand • MTE Management • Multiple LSS Projects in Place • Weekly MTE Inventory Reporting • HQ Monitoring Demand and Inventories Weekly • Industry Fall Mailing Webinars Planned for Summer 2014 • Fall Mailing Season Readiness • MTE Planning - Fall Mailing Season 2

3. METEOR Update • We will launch MTEOR for Local Mailers in all Areas in 2014 using a phased approach • Provides Mailers the ability to request MTE from their Postal Plant • Allows Postal Plants to manage their MTE requests from Mailers online • Pacific Area • Launched Feb 3, 2014 (Southern) & March 3, 2014 (Northern) • 18 Active Plants • 526 Mailers Registered for METEOR • 379 Mailers Who Have Placed at Least One Request

4. Mail Transport Equipment • MTEOR Deployment Schedule • Southern Pacific Area – February 3, 2014 • Northern Pacific Area – March 3, 2014 • Eastern Area – April 7, 2014 • Great Lakes Area – May 5, 2014 • Southern Area – June 2, 2014 • Northeast Area – July 7, 2014 • Capital Metro Area – August 4, 2014 • Western Area – September 8, 2014

5. Pacific Area Focus Group Major FY 2014 Initiatives DSCF Standard Mail Load Leveling 24 Hour Clock Project 5

6. Pacific Area Focus Group DSCF Standard Mail Load Leveling 6

7. Imbalance of Mail Delivered by DOW 45% Disproportionate amount of Standard Mail is scheduled for delivery on Monday resulting in: 40% • Service Variability 35% • Operational Inefficiencies • Increased Cost 30% 25% 20% 15% 10% 5% 0% SAT MON TUE WED THU FRI Postal Quarter 1 FY 13

8. Expected Days of Delivery SCOPE OF LIMITED CHANGE DELIVERY DAYS MEETING SERVICE STANDARD Thursday Friday, Saturday, Monday Friday, Saturday, Monday DSCF Standard Mail** Dropped Before 4pm* on Current Proposed Friday Saturday, Monday Saturday, Monday, Tuesday Saturday Monday, Tuesday Monday, Tuesday, Wednesday Sunday Monday, Tuesday, Wednesday Monday, Tuesday, Wednesday *The current Critical Entry Time (CET) for Standard mail is 4 pm **For delivery in the continental United States 8

9. Expected Days of Delivery What Doesn’t Change • Standard mail dropped at a DDU does not change • Standard mail dropped at a NDC does not change • EDDM Retail does not change • Periodical/Newspaper processing does not change • First-Class does not change • Priority does not change 9

10. Pilot Sites Proof of Concept Plant South Jersey National Implementation Began April 10th Additional Pilot Sites 10

11. Benefits • Benefit to Mailers and Customers • Consistent and Reliable Service • Consistent Delivery Times by Day of the Week • Less Competition in the Mailbox • Additional FAST Appointment Availability • Cost Containment 11

12. Pacific Area Focus Group PROJECT

13. Synchronizing the 24 Hour Clock

14. 24 Hour Clock Process PROJECT • 24 Hour Clock Compliance Charter • Implement Processes, Technology and Operational • Discipline to Align with the 24hr Clock Parameters • Drive Consistent Service • Improve the Consumer Receiving Experience • Increase Operational Efficiency 14

15. Carriers by 1700 & 1800 Improving Trend Critical Indicator

16. Benefits • Long Term Benefits • Predictable Service • Customer Satisfaction • Cost Containment 16

17. Pacific Area Focus Group the Future is Now Innovation Platforms 17

18. Transforming Infrastructure, cont.'s.… LEVERAGING NETWORK CAPACITY What will the arc look like…as we look even further to the future? 1970 2014 18

19. Emerging Trends Directional patterns that may generate market, customer, or organizational needs or opportunities. Industry Developments shaping how businesses are organized and how transactions take place Social Patterns of human interaction,movement, and preference E-Commerce Simplicity Technology The application of scientific knowledge and engineering in the digital age Do-It-Yourself Consumer Same-Day Delivery Public-Private Partnerships Collaborative Consumption Automation Big Data 3D Printing 19

20. Business Platforms First Mile Physical Network Last Mile Digital • Mail Processing Centers • Post Offices • Transportation assets • Carrier delivery • Home and business customer interaction • Post Offices • Secure digital communication • Identity authentication • Retail • Collection boxes • Carrier pick-up • usps.com • Sales • Business mail acceptance • Self-serve 20

21. Innovate Across Business Platforms First Mile Physical Network Last Mile Digital • Expand delivery solutions • Capitalize on the expansion of E-commerce and technology • Optimize route flexibility and productivity • Boost the demand for mail and packages • Expand and simplify induction points • Integrate emerging digital, big data, and consumer trends to grow • Leverage USPS’s brand, trust, and reputation to drive profit • Leverage market-leading physical assets • Incorporate evolving logistics solutions • Develop a structure that fosters agility and innovation Optimizing the Value of Infrastructure 21

22. Going Forward USPS - Industry Collaboration • Leverage PCC’s & Area Focus Groups to Work With Local Leadership to Resolve Issues • Grow the Industry • Committed to Collaboration/Communication Area Focus Group Meetings – Calendar by Area https://ribbs.usps.gov/index.cfm?page=periodicalsfocus Commitment to Communicate Success requires collective effort 22

23. Pacific Area Focus Group Thank You Questions?