Volume III, No. 2 Spring 1996 Newsletter

Track-and-Trace Experiment in High Gear

The Postal Service's track-and-trace experiment now underway in Florida began transmitting real-time information on Monday, May 13th. Initially, three delivery offices in Tampa are using the new system to scan all Express Mail, as well as all Fastnet parcels with barcodes. By July the experiment will be expanded to the entire metropolitan Tampa area, plus Jacksonville, and the Postal Service hopes to have the entire state of Florida on the system by sometime during August.

Priority Mail will be included in the track-and-trace experiment starting sometime in July, and the Postal Service is actively looking for Priority Mail shippers who manifest to participate in the tracking tests. Any mailer wishing to participate should call Julie Rios at (202) 268-3557. Julie will be at the next APMU meeting on Tuesday, June 11, to provide more information and answer questions about track-and-trace.

Three New Package Sizes Available for Priority Mail

As of mid-June the Postal Service will have available for immediate distribution three new sizes of red, white and blue Priority Mail packages. They are:

Medium-sized box, designed to hold any average notebook or ring binder, with internal dimensions of 11"x2"x14";
Video box, 8"x5"x1", designed to hold one video tape with a traditional plastic cover; and
Triangular tube, 38" long and 6" per side. This tube is 2" longer than a similar triangular tube previously used for Express Mail, and it can be used for Priority Mail or Express Mail.

Small quantities of the medium-sized box and the triangular tube can be obtained at local post offices. Priority Mail users who need video boxes, or larger quantities of the other packages, can order these new packages from the Indianapolis fulfillment center (phone: 1-800-222-1811; fax: 1-800- 270-6233). Orders normally ship within 24 hours of receipt.

+ These new packages will help make the Postal Service more competitive in the expedited mail market. Members of APMU who have ideas about other desirable package sizes are invited to call George Hurst, the Priority Mail Product Manager, at (202) 268-6083.

PRC Recommends and Governors Approve Experimental Discounts

On December 19, 1995, the Postal Service filed a new case with the Postal Rate Commission which requested an experimental discount of 4 cents per piece for small First-Class and Priority Mail parcels that are (i) barcoded and (ii) entered at post offices within the areas served by mail processing plants in Philadelphia, Southeastern Pennsylvania, and St. Petersburg. Following an expedited hearing, the Commission issued a favorable recommendation (Docket No. MC96-1) on March 13, 1996. The Board of Governors approved the recommendation at their meeting on April 1, 1996; the discount became effective for a two-year period beginning April 28, 1996.

Lori Ware, Joe Renna Featured Speakers at Anaheim Postal Forum

Lori Ware of Amway and Joe Renna of Medco Containment both made a presentation (along with George Hurst of USPS) on "Expedited Mail Services" at the National Postal Forum in Anaheim, California. Lori and Joe presented case histories discussing their firms' sucessful use of Priority and Express Mail.

Numerous APMU members assembled at the opening reception and at the Tuesday luncheon at the National Postal Forum. APMU members had several opportunities to "network" with other substantial users of Priority Mail to lean more about how Priority Mail is handled in the field. Several firms requested APMU membership information, which has since been mailed out. All significant users of Priority Mail are invited to the next APMU meeting, Tuesday, June 11, in Washington, D.C.

Dedicated Priority Mail Processing Facilities may be Subcontracted

In an effort to improve performance in meeting the two-day delivery standard for Priority Mail, the Postal Service plans to establish ten new facilities dedicated to Priority Mail (see APMU News, 12/95). In a recent development, the Postal Service is now exploring the possibility of outsourcing the operation of these facilities.

In the April 18, 1996 issue of Commerce Business Daily, the Postal Service invited interested firms to submit their qualifications with respect to operating a network that requires "transportation, processing and distribution of a time definite two-day product, network and logistics management, and information support." Competitors of the Postal Service will not be considered, so bidding may be limited (after all, if an organization has the requisite expertise in all of the above-cited areas, what are they doing besides competing with the Postal Service?).

Priority Mail Continues Growth in FY 1996

The Revenue, Pieces, Weight ("RPW") Report for fiscal year 1995 has been released, and it shows that Priority Mail was among the Postal Service's leading growth products last year. The volume of Priority Mail was up 2.6 percent, while the volume of First-Class Mail declined 1.2 percent. As a result of the rate increase that took effect on January 1, 1995, Priority Mail revenues were up even more, by 8.1 percent.

Through the first 7 accounting periods in postal fiscal year 1996, total Priority Mail Volume was up 5.0 percent over the corresponding period last year. The percentage increase in revenues was slightly greater, up 7.4 percent. The growth rate in the volume of Priority Mail continues to outstrip all other major domestic subclasses (International mail is where the big growth has been recently). Here are the numbers (volumes and revenue in millions):

                    (1)     (2)     (3)
                    A/P 7   A/P 7   Percent
                    1996    1995    Change

    Volume          506     482     5.0%

    Revenue         $1,823  $1,697  7.4%

    Revenue/piece   $3.60   $3.52   2.3%

The small increase in revenue per piece, only 8 cents, reflects the fact that the Postal Service is an important player in the market for pieces under 5 pounds, but is a real "light weight" when it comes to competing for heavier-weight parcels.

Priority Mail Advertising Blitz

In case you haven't noticed, the Postal Service has launched a major advertising campaign to promote Priority Mail. Direct mail to 350,000 target accounts went out on April 26, and follow-up mailings were sent on May 1st and 3rd. The direct mail campaign is designed to run concurrently with television advertisements promoting Priority Mail. On May 15th the Postal Service completed mailing a survey to these 350,000 accounts (see related item on the offer for free interactive software), and a new round of television spots began airing on March 13th. The Postal Service plans yet another advertising blitz in June.

New Interactive Rate Comparison Software

The Postal Service has developed new, interactive software designed to facilitate rate comparisons between USPS, FedEx and UPS for:

Overnight service;
2-day service; and
Regular ground parcel service.

The software is DOS-based for IBM-compatible computers (sorry, MAC users, you're out of luck). The software will not only compare published rates, but it also allows users to plug in any discount off published rates that they may have negotiated with FedEx or UPS. When using the software, the customer simply enters the origination and destination ZIP codes, the weight and number of packages.

The new software package can be obtained from selected postal retail stores for $19.95. However, a free copy is being made available to 350,000 package mailers if they respond to a one- page mail survey from the Postal Service.

Reclassification Revisited

It appears likely that the major proposal for Priority Mail reclassification will be a new 8-ounce rate. However, that and any other changes are supposed to be part of a joint filing with fourth-class mail in a future case alluded to as "Expedited and Parcels." Changes being talked about for Priority Mail are not known to involve any controversy, but the same cannot be said for the parcel categories. Over the last two years or so, some of the parcel proposals broached with major shippers have been rather controversial. One result has been delay in preparation of and filing for reclassification. At the earliest, the Expedited and Parcels case is not expected to come until late Summer, and substantive rumors are afloat that this reclassification case may not come at all.

1996 Calendar of Events

APMU Meetings	June 11 - Washington, D.C. September - to be scheduled December - to be scheduled
National Postal Forum	August 25-28 - Washington, D.C.
MailCom 1996	September 25-28 - Dallas, Texas
MTAC Meetings	June 11-13 - Washington, D.C. September 10-12 - Washington, D.C. December 10-12 - Washington, D.C.

The Association of Priority Mail Users, Inc. is a nonprofit organization of Priority Mail users and suppliers to Priority Mail users which seeks to ensure that proper business and financial decisions are made by the United States Postal Service to promote and protect the cost efficiency and quality of service of Priority Mail. For information on APMU programs and membership information, please call 703-356-6913.

Association of Priority Mail Users, Inc. 8180 Greensboro Drive, Suite 1070 McLean, Virginia 22102-3823 (703) 356-6913 (phone) (703) 356-5085 (fax)