The Postal Service continued the market test of its pilot self-service kiosks in five cities. The Self Service Platform - Automated Postal Center (SSP/APC) is a lowcost alternative to the retail counter that provides customers with convenient access 24 hours a day, seven days a week, to the postal products and services they most frequently need. It can be deployed at both postal and non-postal locations. The SSP/APC reduces customer waiting time in Post Office branches by providing direct access to basic postal products and services. Easier access to premium products, such as Priority Mail and Express Mail services, make them more competitive with alternative delivery services. Moving transactions from the counter to self-service also reduces costs. In 2003, funding was approved to deploy the first 2,500 units to postal locations. Contract award is scheduled for December 2003, with deployment running from June through November 2004. This use of new technology further leverages the Postal Service's plans to reduce costs and improve customer satisfaction.

     The Postal Service and individual businesses have partnered to provide limited retail and mail acceptance services on behalf of the Postal Service. The services being offered, for which a commission will be paid to the partner retailers, are First-Class Mail, Priority Mail, Delivery Confirmation, Signature Confirmation, Certified Mail, Return Receipt, and Insurance services. Digital postage meters will be provided to partner retailers to reduce administrative burden and costs, and to automate payment processing.

     The first business partners to use this concept are participating Hallmark Gold Crown stores. Riding on the successful deployment of this program, partnerships with other retailers are currently being pursued. Deployment began in March 2003

with initial roll-out to 75 Hallmark stores. There are currently 494 Hallmark stores in the program.

     The Postal Service will continue its convenient Stamps on Consignment program, which makes stamps available through participating retailers such as supermarkets and drug and convenience stores, as well as automated teller machines through many financial institutions. Approximately 8 percent of retail revenue is generated from the Stamps on Consignment program. This program is designed to offer consumers easy access to purchase stamps. The number of alternative locations provided by this program was approximately 40,000 in 2003. Other alternatives include Stamps by Mail, which is being revamped for added convenience, the Postal Store at www.usps.com/shop, and Stamps by Mail at 800-STAMP-24.

     Contract postal units (CPUs) and other commercial agents and partners allow the Postal Service to reach customers at times when Post Office branches are deemed inconvenient or are closed. Typical locations for these units are shopping centers, local malls, and other locations that customers may frequent. The extended evening, weekend, and holiday hours of these nonpostal facilities provide Postal Service customers with the utmost convenience. Research indicates that customers prefer to combine errands at one location. The Postal Service, therefore, will be targeting grocery store chains and convenience stores as potential full- or limited-service contract units. Implementation in convenience stores has begun in the Southeast Area and there is strong interest in this industry to support expansion in 2004 and 2005.

     Similar to CPUs, new services are being developed to implement basic mailing, First- Class Mail, and Priority Mail services into additional retail store locations. This will not