chapter 2
postal operations
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integrate and align customer and Postal Service business processes. By integrating either a desktop or fully automated Scan Where You Band system into our customers' mail production processes, the Postal Service is able to make transportation assignments to letter trays as they are being produced in customers' facilities. This results in substantial savings and greater consistency in delivery by diverting the use of scheduled air transportation of mail into the surface transportation network. The Postal Service has installed 80 systems to date and has approximately 30 systems remaining to be deployed by early 2004.

     e-VS testing and development, that began during 2001, will go live in November 2004. e-VS allows high-volume destination entry package mailers to electronically exchange postage information with the Postal Service. The e-VS mailings bypass the origin Post Office, using an electronic manifest, and can be taken directly to the destination Post Office allowing the mailer to run their operation 24 hours a day, seven days a week.5. Customer Connect

     The Customer Connect program was jointly designed by the Postal Service Sales department and the National Association of Letter Carriers, and uses existing resources in new ways to grow Postal Service revenue. Postal Letter Carriers contact customers to identify the shipping needs of businesses and home offices. In a nine-month test in 2003, 4,662 carriers in 93 offices generated 1,206 leads for Postal Service Sales and more than $3 million in annual revenue. Customer Connect will be implemented in approximately 1,500 offices by February 2004.

J. Retail Programs

     Retail is the way most Americans buy and use postal products and services. Each day, the vast majority of the more than seven million Americans who visit Post Office branches and contract postal units perform the very basic functions of buying stamps, mailing packages, and collecting mail from their Post Office boxes. Many more obtain stamps or other Postal Service products by

mail, online, through vending equipment, and through supermarkets and other authorized agents. As it faces an ever-changing marketplace, the Postal Service is exploring new services and business arrangements necessary to expand its customer base and meet the growing needs of its customers.

     In addition to the development of new solutions for its customers, creating agreements with business partners and other commercial carriers that help to capture the profit potential of the postal retail network will help the Postal Service to create sustainable net revenue. For example, the Postal Service's agreement with FedEx not only provides the Postal Service with new revenue, but it also leverages the postal retail network. In 2003, the Postal Service tested the value of its retail space with America Online, Pitney Bowes, and

     The Postal Service will further explore the value of its retail space through the Lobby Asset Valuation Program, which is designed to segment Post Offices, stations, and branches by the size and type of facility and by the types of customers they serve. By applying these metrics, the Postal Service can properly leverage its retail assets with potential partners that have some relevance to mail. This represents an opportunity for the Postal Service to generate revenue while, at the same time, keeping customers in the mail. This program is expected to be implemented on a test basis by mid-2004.

     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.

     Additionally, co-locating retail services with business services retailers is planned for testing with several large retail chains catering to small businesses to help them grow using postal products and services. It is expected that the first partnership with a chain retailer will be implemented by spring 2004.

Chapter 1 Compliance with Statutory Policies Introduction

Chapter 2 Postal Operations
  1. Public Perceptions, Customer Outreach, and Mailer Liaison
  2. Products and Services
  3. International Mail
  4. Mail Volume and Service Performance
  5. Mail Distribution
  6. Delivery Unit Operations
  7. Stamp Services
  8. Licensing Program
  9. Service and Market Development
  10. Retail Programs
  11. Pricing and Classification
  12. Technology
  13. Intelligent Mail
  14. Financial Management
Chapter 3 Financial Highlights

Chapter 4 2003 Performance Report and Preliminary 2005 Annual Performance Plan