5. Parcel Return Services

Parcel Return Services (PRS) allows participating mailers to retrieve returned parcels in bulk from designated postal facilities providing them with additional convenience and cost savings while benefiting the Postal Service by reducing costs. By the end of 2005, PRS was available at 1,500 postal facilities including bulk mail centers and delivery units located in 50 districts. PRS, launched in October 2003 as a 2-year test, generated over $25 million in 2005, almost double last year's volume of new package business. The Board of Governors approved a filing for a permanent service to be brought before the Postal Rate Commission in September 2005.

6. Co-palletization Drop Ship Incentives

The Postal Service continued the Co-palletization Drop Ship Incentives experiment which attempts to control the cost of Periodicals processing by offering mailers additional discounts that encourage the use of pallets and drop shipping. The experiment encourages smaller circulation publications to co-palletize and drop ship their mail and gain discounts otherwise accessible only to larger circulation publications. Handling mail on pallets instead of in sacks is more cost efficient for the Postal Service. The experiment is scheduled to run through October 3, 2006.

7. Domestic Mail Manual Redesign

In March the Postal Service released the redesigned DMM 300, now called Mailing Standards of the United States Postal Service: Domestic Mail Manual. The purpose of this redesigned DMM is to make it easier for larger customers and employees to locate all information needed to make workshared mailing decisions. Information is organized primarily by class of mail in an easy-to-use manner to assist large mailers in finding sections that are applicable to their business. New charts, illustrations and navigational tools were also added. As the DMM is revised, standards will be rewritten using the principles of "plain language." The redesigned DMM 100 and 200 exist to make it easier for retail customers and small businesses and organizations to locate information to make mailing decisions.

8. Pricing and Classification Service Center

In November 2004, the Postal Service consolidated its three rates and classification service centers and the Nonprofit Service Center into a single unit - the Pricing and Classification Service Center. This will help ensure consistent application of rates and mailing standards for all customers by providing one source for mail classification decisions and one-stop shopping for customers and field employees with rate application and mail eligibility questions.

9. National Customer Rulings

In conjunction with the creation of the Pricing and Classification Service Center, the Postal Service initiated the National Customer Rulings process to provide major mailers with proactive guidance on mail preparation, mailpiece design, and rate eligibility. This new business model proactively seeks out major mailers who are most affected by the nuances in classifications, and offers them a before-mailing consultative relationship that recognizes their national stature. In 2005 through this new process, classification decisions were made on mailings prior to acceptance, streamlining the acceptance process and providing mailers with greater confidence in the quality of planning and budgeting for future mailings.

10. Escrow Rate Case (R2005-1)

On November 15, 2005 the Governors voted to accept the PRC's decision to raise most domestic prices by approximately 5.4 percent across the board. The price changes will be implemented on January 8, 2006, and affect all classes and subclasses of mail and extra services. These rate increases are necessitated by the $3.1 billion escrow requirement imposed on the Postal Service by Public Law 108-18.

11. International Price Adjustment

The Postal Service announced the first change in international prices and fees in nearly 5 years. To the extent possible, the proposed overall 5.9 percent increase is designed to be in line with the 5.4 percent across-the-board domestic rate proposal. However, additional adjustments were needed for some services and country groups to ensure that the associated costs are adequately covered. In addition, certain Express Mail and Air Parcel Post rate groups are to be realigned based on operational changes.

Also, as a result of an agreement negotiated by the U.S. government with the Republic of the Marshall Islands and the Federated States of Micronesia, mail destined to those two countries will phase into the international rate schedules. These international changes took effect on January 8, 2006, the same date as the domestic pricing changes.