3. RETAIL: NEW SOLUTIONS, NEW PARTNERS
The Postal Service faces an ever-changing marketplace. New services and business arrangements are necessary to expand our customer base and meet the growing needs of our customers.

Retail continues to expand programs such as Ready Post, which are prepackaged shipping products designed to make shipment preparation easier, and Dinero Seguro^®, an electronic money transfer service to Mexico, to capture incremental revenue. We are also examining a Hold for Pick Up concept that would enable shippers the ability to designate specific Post Offices where packages would be held for customers to pick up. A major market for hold services, for example, are large commercial customers who routinely make urgent shipments for employees to pick up early in remote locations.

In addition to the development of new solutions for our customers, creating agreements with business partners and other commercial carriers that help to capture the profit potential of our retail network will help us to create sustainable net revenue for our organization. For example, the drop box agreement signed with FedEx not only provides the Postal Service with a significant amount of new revenue but it also leverages our retail network.

A new partnership with Hallmark Gold Crown Stores will be implemented in January 2003, providing consumers with limited postal services, including First-Class Mail, Priority Mail and some special services.

Customers will have the convenience of paying by credit card for Express Mail corporate accounts during a test in four district markets. Accepting credit card payments from online customers and frequent shippers who use Express Mail and Priority Mail services is also being considered.

Co-locating retail services with business services retailers is planned for testing to help small businesses grow using postal products and services.