5. PACKAGE SERVICES
In 2002, the Postal Service continued to emphasize customer value in its service to everyone, everywhere, everyday by identifying key industry trends and offering solutions that meet the needs of individuals and businesses. Continued focus on providing consumers reliable and affordable package delivery enabled the Postal Service to remain a key provider in this highly competitive market.

The Product Development group has pursued the following initiatives to emphasize customer ease-of-use, consistent service, and price advantage:


a. Parcel Select

Parcel Select^™ represents a real value for package shippers who want to save on their parcel shipping costs and choose a level of service that best meets their shipping needs. The concept behind Parcel Select originates from the term “zone skipping” that parcel shippers have known for years. Through zone skipping, parcel shippers provide their own transportation and bring parcels directly to a Postal Service facility. Since distance and transportation are major factors in postage rates, the Postal Service is able to reduce its costs and pass the savings to the shipper as postage discounts. The closer the mail is dropped to its final destination, the greater the savings. Overall, Parcel Select is an economical way to leverage the Postal Service’s greatest strength, its nationwide six-day a week neighborhood delivery network.

Parcel Select was designed for medium to large shippers looking for an economic ground delivery service option. The shipping industry has overwhelmingly embraced the product and it has demonstrated strong and steady growth. To further enhance the service in 2002, Package Services spearheaded the initiative to offer free electronic delivery confirmation to the suite of Parcel Select products. In addition, working with consolidators, critical entry times for DDU parcels were revamped to create a larger window for parcel entry.


b. Click-N-Ship

In 2002, the Postal Service expanded the shipping label capabilities available on www.usps.com. Beginning in 2001, customers could print Priority Mail labels online with no-fee electronic Delivery Confirmation. The introduction of Click-N-Ship^™ in May 2002, enhanced this online label capability by providing labels with postage. The simplicity of Click-N-Ship is popular with consumers and small businesses, and is an important element of our growth strategy for this segment. In 2003 plans include building a robust pick-up program that will facilitate growth in Click-N-Ship.


c. Product Redesign

As part of the Product Redesign initiative in 2002 the Postal Service made significant progress on identifying key opportunities to improve Postal Service efficiencies and increase the value of Package Services. The Product Redesign initiative entailed several meetings of industry and Postal Service representatives to improve the value and price of Postal Service products and services, and also generate growth and contribution. Many of the team’s ideas highlighted ease-of-use initiatives, reducing costs and improving processes. These initiatives are expected to be thoroughly analyzed in 2003 and incorporated as appropriate into Package Services strategies.


d. Package Summit

Package Services conducted a two-day Internal Package Summit comprised of a diverse group of Postal Service managers who were tasked with developing cost reduction and growth strategies. Some of the key areas of focus were identifying workshare opportunities, improving barcode quality and readability on parcels, standard processing of Standard Mail parcels, and identifying efficiencies in merging similar-sized flats and parcel mailstreams.


e. Confirmation of Delivery Services

In 2002, Delivery Confirmation was enhanced and expanded beyond its original capabilities and has remained a valuable asset among the Postal Service’s product offerings in the highly competitive package industry.

In 2002, there was an emphasis on leveraging the fully-implemented scanner technology and expanding Delivery Confirmation to other product lines beyond expedited products. Delivery Confirmation was incorporated into the basic price of all Parcel Select product lines. Additionally, in June 2002 Delivery Confirmation became available for First-Class Mail packages.

Enhanced delivery performance reports were also added as management tools for both customers and the Postal Service. Other enhancements included using Delivery Confirmation to create shared service performance measurement reports for Parcel Select products.