1 to greater success rhonda schorr usps sales specialist

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To Greater Success

Rhonda Schorr

USPS Sales Specialist

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►The Economy

►Market Trends

►Opportunities To Save

►Strategies Moving Forward

Agenda

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Economic Outlook

Many Retailers Are Filing For Bankruptcy Or Having To Severely Cut Back

Unemployment Rates Continue To Go Up

Banks Freezing Credit And Inflation At High Levels Consumers Are Only Buying Necessities

Online eCommerce — Down For The First Time In Its History

2010 Economy Recovery At Best

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InquiryQuestions

Dialog

DiscussionDialogue

Investigate

Interview

Questions?

Ask

Query

Ask

InquiryProbe

Inquiry

Examinationinterview

Discussion

Query

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State of Our Business: Headwinds

Strong Competitors

Package Market Declining

Economic UncertaintyConsumer Confidence Down

We Need To Keep Working Customer Care- Bring Value To Customers

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State of Our Business: Tailwinds

Great Business Partners

New Pricing Freedoms

Last Mile Strengths

Market Growth Is Lightweight And Residential

Economic Uncertainty: Customers Looking For Lowest Cost Provider:

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2008 Volume Share

Market Share by Service – All Products

Volume 2008

Overnight Service

2-3 Day Service

Ground Parcel Service

Total

Pieces

%Piece

s% Pieces % Pieces %

UPS 419 37% 334 16% 4,325 59% 5,180 48%

USPS 48 4% 1,355 65% 1,512 21% 3,016 28%

FedEx 505 44% 331 16% 1,205 16% 2,044 19%

DHL 154 13.5% 53 3% 95 1% 366 3%

Other 19 1.5% 3 <1% 180 3% 205 2%

Sub-Total

1,14511%

100% 2,075 20%

100% 7,318 69%

100% 10,538

100%

100%

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USPS33.8%

UPS31.2%

FedEx25.7%

DHL8.0%

Other1.3%

UPS72.9%

FedEx19.4%

Other3.5%

USPS1.5%DHL

2.6%

UPS75.6%

FedEx13.0%

Other1.6% USPS

7.2%DHL2.6%

39% 16% 45%5 Pounds Or Less 11 To 70 Pounds6 To 10 Pounds

3.4 Billion Pieces 3.8 Billion Pieces1.4 Billion Pieces

Breakdown Of Package Market By WeightWho Controls The Market Share

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Weight 2002 2008 Growth

0-5lbs 3.1B 3.4B 13%

6-10lbs 1.3B 1.4B 8%

11-70lbs 3.6B 3.8B 6%

Total 7.9B 8.6B 9%

Package Market Growth Trends By Weight

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B2C Shipments On The Rise

20% 22% 27% 30% 34% 36%

66% 64%

80%73%78%

70%

0%10%20%30%40%50%60%70%80%90%

100%

2002-04 2005 2006 2007 2008 2009 Proj.

Business To Consumer Business To Business

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B2B Is Stagnant

B2C Is Growing

Packages Are Getting “Lighter”

Lightweight Shipments Going B2C Are Costly To Deliver For Our Competitors

Shipments Weighing Less Then 5 Lb - Our Sweet Spot

Market Trends

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►Competitors impose a net minimum price

►Even with their discounts you’ll never pay less than the net minimum — currently $4.57.

►So what does this mean for you?

USPS Has Under-1lb Pricing.And No Net Minimums.

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CFA = Competitive Financial Analysis

Let me show you how I partner with your shipping department to provide you with a realistic comparison when searching for

the best shipping solutions

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CFA – USPS Priority Mail Commercial Plus vs FedEx 2 Day

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Competitor’s Rate Increases 2004 - 2009

  PublishedActual

CommercialActual

Residential

YEAR Increase 1 - 5 lbs. 1 - 5 lbs.

2004 1.90% 1.91% 6.06%

2005 2.90% 4.71% 5.80%

2006 3.90% 4.57% 7.57%

2007 4.90% 5.50% 5.56%

2008 4.90% 5.48% 5.46%

2009 5.90% 7.99% 8.23%

TOTAL 24.40% 30.16% 37.70%

AVERAGE 4.07% 5.03% 6.28%

What Are You Really Paying?

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Surcharge 2008 Fee1 Additional Handling +$0.50 To $6.502 Address Correction (Ground) +$1.00 To $6.003 Adult Signature Required +$0.25 To $3.50

4 Declared Value+$0.05 To $0.60 Per $100.00

+$0.30 To $1.80 Minimum Charge5 Delivery Area Surcharge (Commercial) +$0.10 To $1.506 Delivery Area Surcharge (Residential) +$0.10 To $2.307 Delivery Confirmation +$0.25 To $1.50

8 Large Package Surcharge +$5.00 To $45.0090 Lbs. Minimum

9 Residential Surcharge (Air) +$0.10 To $2.3010 Residential Surcharge (Ground) +$0.10 To $1.9511 Signature Required +$0.25 To $2.50

Competitors use surcharges to mask the true cost of shipping:

Our Competitor’s Surcharges Continue To Go Up Each year

Example….$10.00

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1 UPS pieces to/from all 50 states. Volume estimates are from market segmentation models maintained by The Colography Group.2 UPS pieces shipped within the lower 48 states only. Volume based on preliminary estimates

2007 2008Overnight Air 66,382 $2.20 $2.30 $0.10 $6,638 $152,6792/3 Day Air 70,666 $2.20 $2.30 $0.10 $7,067 $162,532Ground 847,928 $1.85 $1.95 $0.10 $84,793 $1,653,460Total 984,976 - - $98,498 $1,806,138

$303,636 $5,546,514Total UPS Revenue Gain

UPS' Revenue Gain From Surcharge

Increases(In Thousands)

UPS CY-2006 Pieces Subject To

Surcharge/Change (In Thousands)Type Of Service

UPS Surcharge Fee

Amount Of Increase

Frequently Applied Surcharges

Delivery Area

(Residential)2

Delivery Area

(Commercial)2Domestic Air & Ground

Domestic Air & Ground

UPS' Total Surcharge Revenues

(In Thousands)

Residential

Surcharge 1

851,276

215,127 $2.20 $2.30

$1.50$1.40

$0.10

$0.10

$21,513 $494,792

$85,128 $1,276,914

Surcharges Are Big BusinessLook How Much is Generated With Just 3 Of These Increases

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Since 2004 our competitors have Steadily Increased Existing

Surcharges and have Added New Surcharges.

Today’s # ?????????

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45

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Delivery Area Surcharge (DAS)

DAS Is In Addition To The Residential Surcharge

“Regular” DAS Is $2.40 In Continental US

New Extended DAS $2.65 In Continental US

DAS Charge Is Also Subject To Fuel Surcharge

Over 80% Of DAS ZIPs Have Extended DAS

Over 57% Of Zips Receive DAS Or Extended DAS

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Above in red: Five-digit ZIP Codes subject to competitor 2009 delivery area surcharges (DAS) for commercial and residential delivery

What Do Our Competitors Consider Rural?

Does Does National Airport in National Airport in D.C. or Malibu, CA,D.C. or Malibu, CA, seem seem

rural to you? It does to our rural to you? It does to our competitioncompetition.

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“Almost 40% Of Total Shipment Costs Are Now Made Up Of Add-on Charges.”

Parcel Magazine

Our Clear, Up-front Pricing Makes It Easy.

“What You See Is What You Get” Rates

No Fuel, Residential, Or Delivery Area Surcharges

No Surprises

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Express Mail

Priced to compete

New incentives►Volume discounts. ►Commercial base discount is increased

and expanded.►New “Commercial Plus” pricing tier to

reward high-volume shippers.►To qualify, customers must ship:

►More than 6,000 pieces per year for Express Mail

►Average discount: ►14.5 percent

Because Our Headquarters Executives Heard You

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Priority Mail

2009 Average price change: 4.7 percent

New incentives:►Commercial base pricing extended to IBI►New “Commercial Plus” pricing tier to reward high-volume shippers

►To qualify, customers must ship:►More than 100,000 pieces for Priority Mail

►Average discount:►7.0 percent

►New small flat-rate box

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Flat Rate Envelopes And BoxesCommercial

Commercial PlusPriority Mail

Envelope $4.80 $4.75

Small Box $4.80 $4.75

Regular Box $9.85 $9.67

Large Box $13.50 $13.27

Large Box (APO/FPO) $11.50 $11.30

Express Mail

Envelope $16.63 $14.96

2009 Flat Rate Prices

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International Products

Global Express Guaranteed®(GXG) Reliable, date-certain shipping to over 190 countries.

Express Mail International®(EMI) Reliable, expedited service to over 190 countries. Now available with day-certain delivery to select destinations.

Priority Mail® International (PMI) Reliable, priority handling to over190 countries worldwide.

First-Class Mail® International Reliable and economical means of sending

correspondence, documents and lightweight merchandise weight up to 4 pounds.

1-3 Business Days

3-5 Business Days

6-10 Business Days

Varies by Destination

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Postal Qualified Wholesalers

Access Worldwide Brokers Worldwide Cloutier Direct, Inc. CMS, Complete

Management, Inc. Dahlgren's Mailing Service, Inc. Distribution Postal Co., Inc. Express Messenger International Express Postal

Options International (XPO) Global Postal Solutions, Inc. IBC, Inc. International Delivery

Solutions (IDS) Mail on the Move LLC International Mail Service, Inc. (IMS) Pitney

Bowes International Mail Services Priority Post Co., Inc. RR Donnelley World Marketing Zip

Mail Services, Inc.

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Free Packaging Opportunities

►Available for all priority & express mail shipments

►Same domestic packaging can be used for int’l shipments

►Customized/co-branding available to those who qualify

►Brand with the most trusted government agency

►Free packaging is cradle to cradle certified

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New Growth Opportunities

►Customers can’t try on touch, see or feel the products before purchasing

►An emerging driver of growth in the market place is the need for reverse logistics solutions

►There is an increasing need for items that are sold to be returned, repaired, recycled, recovered or recalled

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Strategies Moving Forward

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Improve Customer Service

► Improve “ease of use” Developing technology to enhance our USPS.COM website

each and every day Shorten start-up time for new customers

► Improve customer care Reduce response time for customer inquiries

► Enhance employee training Ongoing training to promote knowledge base for customer

care employees

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Visibility & Tracking

► Create more visibility with tracking More passive scans

Added 114% in FY08 547 million additional “enroute” scans

Scan for “arrival at unit” for all packages Increase delivery scan execution NEW Release more tracking data to customers NEW Release “out for delivery” event NEW Add additional scan events MORE TO COME

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Optimize Reasonable Pricing

► Enhance profitability with new product offerings that meet customer’s needs

► Continue to reward volume growth with volume discounts for Priority and Express Mail

► Leverage contract pricing to grow volume and revenue (NDA)

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Recap► If You Aren’t Shipping Any Packages With Us, You

Are Over Spending

►Lowest Prices on 1-5lb Shipments

►No Add-On Charges, Or Net Minimums

►Leveraging New Pricing Freedoms

►Preparing For Future Growth By Expanding Our Reach, Developing New Products And Simplifying Ease Of Use

►Creating A Company That Puts It’s Customers First

► NOW THAT WE HEAR YOU ….Let Us Try To Meet Your Challenges!

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InquiryQuestions

Dialog

DiscussionDialogue

Investigate

Interview

Questions?

Ask

Query

Ask

InquiryProbe

Inquiry

Examinationinterview

Discussion

Query

39

THANK YOU

USPS Rhonda Schorr, Sales Specialist Rhonda.L.Schorr@USPS.GOV