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Flats Strategy

Flats Strategy. Managing Cost and Maximizing Efficiencies. Joe Schick Vice President of Postal Affairs. Flats Strategy Group. Initiated May 2014 Cooperative effort (USPS and Industry) Focus initially on costs (cost coverage) Development of Flats Strategy Guide (unpublished)

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Flats Strategy

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  1. Flats Strategy Managing Cost and Maximizing Efficiencies Joe Schick Vice President of Postal Affairs

  2. Flats Strategy Group • Initiated May 2014 • Cooperative effort (USPS and Industry) • Focus initially on costs (cost coverage) • Development of Flats Strategy Guide (unpublished) • Continued focus • Process • Prep • Pricing • Long history of industry involvement (MTAC)

  3. Flats Strategy • Key components of Flats Strategy • Manage cost • Innovate • Pricing • Balance Marketing opportunities vs. Operational efficiency • Utilize strengths of Mail Service Providers • Comail • Copalletization • Dropship • Lowest combined cost (mailers and USPS)

  4. C R Flats Strategy • Renewed focus on non-FSS process • No Phase II FSS • 70-75% of flats in non-FSS zones • Carrier Route is still king • Potpourri (PHI Acquisitions) NSA • Work to reduce bundle handlings • 5 digit pallets – same value as FSS Scheme? • Develop incentives

  5. Flats Strategy • Flats Sequencing System (FSS) • Required prep implemented in January • Key issues • Maintain carrier route • Create DFSS entry and discount – does it offset cost? • Required 250 pound minimum FSS Scheme pallet – impact of increase in quantity of lighter weight pallets? FSS HERNDON VA 20171 STD FLATS 5D SCHEME SUNSHINE PRINTERS STRASBURG VA Mailer information here

  6. FSS Scheme Pallets • Substantial increase in the number of pallets • Lighter weight (average between 250 – 350 pounds) • USPS estimated 6-7% increase • Industry reality = 15 – 45% increase (depending on total pieces and weight in a mailing) • Increased cost for MSPs (Mailing Service Providers) • Handlings • Prohibits use of automation (palletizers, wrappers, warehouse, etc.) • USPS gathered 3rd QTR data • Share with mailers • Determine next steps

  7. Focus on Cost • Reduce/minimize volume of sacks • 35%+ increase in Standard Mail • Modify prep? • Price incentive/disincentive? • Bundle breakage • Increased since FSS prep requirement • Comail identified as major contributor • Larger bundles replacing carrier route • Joint task teams (facility visits and “lean” discussions) • USPS • RRD • Quad

  8. QUESTIONS???

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