© 2012 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar

sessions and sound recordings of seminar sessions. All rights reserved.

Welcome to Session 127

Sponsored by: Presented by:

Gary C Reblin

Vice President

Domestic Products

U.S. Postal Service

B2C Shipping Means

Lightweight, Regional Choices

2

Headline News

USPS Financial Crisis!

Post Offices Closing!

USPS Considers 5-Day Delivery!22

Generation Y Doesn’t Mail!

Texting, email, social media!

Future of USPS in Jeopardy!

3

The reports of my death have

been greatly exaggerated.

―Mark Twain

4

USPS Mailing and Shipping Performance

Source: RPW

-2.0%

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

First Class

Mail

Marketing

Mail Shipping Services

Special & Ancillary Services

International

Total

SPLY Var. %

Not All Bad News!

FY 2011 Year-End Revenue to SPLY (%)

5

The Postal Service is:

• Changing and adapting to a digital world

• Promoting

innovation

• Making B2C

shipping easier

Good News!

6

First-Class Mail

Marketing Mail

Shipping Services

1. Slow diversion by adding value to hard copy to differentiate it from digital

2. Embracing new

opportunities

from digital and

social media

1. Simplify the use of Marketing Mail

2. Enhance its value with emerging technologies

1. Develop solutions to target the B2C shipping needs of the growing eCommerce market

Shape the Future

USPS Strategies

7

U.S. eCommerce Trend

$-

$50

$100

$150

$200

2000

2002

2004

2006

2008

2010

CAGR:

19%

• eCommerce sales up 19% per year since 2000!

• Total retail growth averaging 2% over same period

• Continued expansion―ecommerce is now only 4.4% of

total U.S. retail sales

U.S. Census data

U.S. Retail eCommerce Sales ($ billions)

2001 through 2010

8

Mobile eCommerce Trends

• This past holiday season, twice as many people as

last year said they were willing to make a purchase

using a mobile phone (62% vs. 32%) Source: Sybase Inc. poll of 847 mobile phone owners

• 90 million people―more than one-third of all

internet users―will use a tablet device by 2014 Source: eMarketer forecast

9

Mobile’s Impact

“We have always capped

e-commerce at 10 to 15 percent

of total retail sales, but this [tablets and

mobile devices] potentially has the

capability of really expanding

e-commerce much beyond that.”

–Forrester e-commerce analyst Sucharita Mulpuru

10

USPS B2C Focus

Competing for volume based on:

• Parcel size

• Distance

• Price

11

Free Is The New Price

ComScore

• Free shipping has become a major decision factor

for e-commerce consumers

• Nearly 3/4 (73%) of shippers consider free shipping

“somewhat important” or “very important” when

making holiday purchases.

73%

comScore data

12

• Lightweight advantage

– Small is growing (ex: electronics)

– Fits easily in mailbox

– Meets USPS strategic

last-mile advantage

– Flat Rate, Regional Rate

and Cubic Pricing

• Regional trends

Characteristics of B2C Shipping

13

0

5

10

15

20

25

30

35

40

45

50

FY2010 FY 2011

Mill

ion

s

0-1 LBS

2-5 LBS

>5 LBS35%

61%

4%

33%

63%

3%

Package Volume by Weight

USPS Priority Mail Commercial Plus

Package Volume*, FY2010 & FY2011

*Weight/zone products only; does not include Priority Mail Flat Rate Boxes and Envelopes

14

U.S. Domestic Shipping < 70 lbs by Length of Haul (%)

16%17%

11%

5% 3% 6%

42%

0

10

20

30

40

50

Local-Zone 2 Zone 3 Zone 4 Zone 5 Zone 6 Zone 7 Zone 8

Average B2C Length of Haul

58% of shipping volume in Zones 1-3

15

New Products New Product Volume

FY2011 Year End

-

1

2

3

4

5

6

Jan Feb Mar Apr May Jun Jul Aug Sep

Mil

lio

ns

Priority Mail Padded

Flat Rate Envelope

Priority Mail Flat Rate

Legal Envelope

Regional Rate Boxes

16

B2C Ground

PRODUCT WEIGHT FEATURES

First-Class Package

Service

0 to 1 lb • Commercial Base up to 13 oz

• Commercial Plus up to 16 oz

parcels w/ 5,000 pc threshold

Regional Ground

Service

0 to 5 lbs • Zones 1-3 only*

• Annual threshold 10,000 pc

Parcel Select Up to 70 lbs • Last mile/first mile returns

• Partnerships (see usps.com)

*2012 pending

17

B2C Expedited

PRODUCT WEIGHT FEATURES

Priority Mail 0 to 70 lb • Flat Rate options

• Volume pricing

Priority Mail Regional

Rate Box

Up to 15 lbs―Box A

Up to 20 lbs―Box B

Up to 25 lbs―Box C*

• DelCon included

• Free package pickup;

forwarding & return

Priority Mail

Commercial Plus

Cubic

• Soft packs and

padded envelopes

• 150,000 threshold*

Express Mail • New Flat Rate Box*

• 2 Flat Rate Envelopes

• Volume pricing

*2012 pending

18

Returns

• Costly to ecommerce merchants

– 2-3 times cost of outbound shipment

– If poorly handled, erode profits

– Impact on repeat orders, customer loyalty

• Effective returns strategies

– Free or inexpensive shipping

– Customer convenience (pickup,

drop-off, prepaid labels)

– Credit issued promptly based on

data

19

New Cloud-Hosted Tool for

Label Printing and Distribution

• Consumer able to print

label via merchant

website

• Merchant call center agent able to email label to consumer

New Solutions for Returns New Solutions for Returns

20

New Scan-based Payment with Flat Rates

• Scans in USPS network trigger payment

• Customer given flat rate; validated via sampling

• Eliminates manual rating

New Solutions for Returns New Solutions for Returns

21

Package Visibility

• 2010 average 5 scans

• 2011 average 6.5 scans per piece

• Barcodes on 73% of packages

2011 Scan Events

• Delivered

• Out for Delivery

• Sorting Complete

• Arrival at Unit

• Processed

• Depart Sort Facility

• Arrive Sort Facility

• Shipment Accepted

• Electronic Shipping

info received

22

Android™ & BlackBerry™

• Track a package

• Find Post Offices and collection boxes

• Look up a ZIP Code

• Carrier Pickup™

iPhone 3.0 Release

• Order free shipping supplies

• Schedule next day pickup

• Barcode scanning

• Online prices

USPS.com Mobile Access

23

On Board―2012

• Priority Mail Regional Rate Box C

• First-Class Package Service

• Express Mail Flat Rate Box

• Cubic Soft-Pack and Padded Envelope

24

Questions?

© 2012 Material Handling Industry®. Copyright claimed as to audiovisual works of seminar

sessions and sound recordings of seminar sessions. All rights reserved.

For More Information:

Gary C. Reblin

Vice President, Domestic Products

U.S. Postal Service

ShippingServices@usps.gov

www.usps.gov

Visit MODEX 2012 Booth 2515