For Internal Use Only

SIX-DAY PACKAGE, FIVE-DAY MAIL DELIVERY

INTERNAL FAQs
Congress/Postal Regulatory Commission Doesnt this change require approval from Congress? What legal authority do you have to make this change? No. The biggest driver of this change is our obligation, consistent with the requirements of Title 39 of the United States Code, to take the responsible steps necessary to ensure our financial stability so that we can provide efficient, reliable and affordable mail delivery service to the American people. Given the fact that the Postal Service recorded a $15.9 billion loss last fiscal year and can no longer sustain significant financial losses, the Postal Service Board of Governors has directed management to accelerate this change as part of our comprehensive effort toward regaining financial stability. Even though there is no operative Congressional directive to maintain six-day carrier delivery, hasnt Congress been pretty clear that it wants to retain it? Postal reform bills in the House and Senate, as well as proposals from the Administration, have indicated support for a switch to five-day mail delivery. The U.S. Government Accountability Office, the investigative arm of Congress, also supports the transition to five-day mail delivery. It is widely understood that the Postal Service will have to make this change at some point. Given its worsening financial situation, the Postal Service needs to accelerate the switch to five-day mail delivery as part of comprehensive efforts to regain financial stability. Market research shows that seven out of 10 Americans support a five-day mail delivery and that support will likely be even higher with the plan to maintain six-day package delivery. The Postal Service and the American public believe this is a responsible step toward ensuring that the Postal Service can continue to provide efficient, reliable and affordable mail service while meeting the needs of our customers. What happens if Congress passes a continuing resolution to maintain six-day mail delivery? Wont that halt this change? Given our worsening financial situation, the strong public support for this change, and the plan to maintain six-day package delivery, it is anticipated that most members of Congress will understand the urgent need to implement this change. By maintaining six-day package delivery, the primary concerns associated with this change have been satisfied. Is there a need to file again with PRC, given the last filing didnt include Saturday package delivery? While we do not believe that we are legally obligated to do so, our current plan is to request that the PRC update its previous advisory opinion on five-day delivery to reflect our updated plan. Impacts to Service How will this affect local Post Offices? Implementation of six-day package/five-day delivery will not impact local Post Offices. Post Offices that are open on Saturday today will remain open. Saturday delivery of mail to PO Boxes will continue. Why did you decide to maintain carrier delivery of packages to street addresses on Saturdays? Package delivery is a thriving business for the Postal Service, with a 14 percent growth in volume over the last two years. It has not suffered the declines seen in other types of mail, so

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the Postal Service will continue to do everything it can to continue to support growth while meeting our customers increased needs for package shipping. With all the consolidations of mail processing locations, is USPS prepared for the additional volumes of mail processing and delivery that will have to happen on Monday? Yes. The additional Monday volume will be anticipated and processing and delivery hours will be shifted appropriately to accommodate the additional volume. The Postal Service already has a great deal of experience with this type of situation from Monday holidays and is prepared to adjust accordingly. What about weeks that contain a federal holiday on Monday? Now, you are talking about three consecutive days of no carrier mail delivery. Wont that next Tuesday face overwhelming volume? No. Despite a significant increase in delivered volume, there is sufficient time and mail processing capacity to ensure all mail meets the Tuesday delivery date. Local operating plans will be adjusted to ensure that all mail scheduled for delivery on Tuesday after a three-day weekend is delivered in a timely manner. This will be accomplished using multiple strategies, including bringing employees in earlier, maximizing flexible resources and redistributing carrier workload. Will eliminating Saturday carrier delivery of mail cause the mail to become congested and significantly slower? No. The entire postal network is designed for a significantly larger volume of mail than currently exists, and eliminating Saturday carrier delivery of mail will not cause congestion in the system. The Postal Service is committed to working with its business customers to adapt to these changes and adjust entry dates for mailings to ensure timely delivery. Will you deliver mail on Saturdays during the two weeks before the Christmas holiday? Packages and mail addressed to PO Boxes will be delivered Monday through Saturday. Mail addressed to street addresses will be delivered Monday through Friday. Packages will be delivered to street addresses Monday through Saturday. Will you deliver to businesses on Saturday? Will my bill payment be made on Saturday? Mail addressed to PO Boxes will be delivered on Saturdays. Mail addressed to street addresses will be delivered Monday through Friday. Will the blue collection boxes be collected on Saturdays? No. Customers wishing to send mail on Saturdays would need to drop it off at a local Post Office with regularly scheduled Saturday hours. Will overnight Express Mail still be delivered on Saturday? Yes Is there a plan to go to four days of delivery any time in the future? No Will Saturday Post Office hours change on Saturday, increase/decrease? The switch to six-day package, five-day mail delivery will not impact the hours of Post Offices. If your Post Office is open on Saturdays, it will remain open. 2 | February 2013

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Some locations dont receive six days of mail delivery now. Will these locations be reduced by a day? No. These locations will have no change. How will rural routes be reevaluated? Saturday delivery to and collections from street addresses will be eliminated, except delivery of Express Mail. The number of rural routes is expected to be minimally impacted. Some contractual changes will be necessary. The National Rural Letter Carriers Association (NRLCA) agreement contains requirements that are triggered when there is a change in the number of delivery days. We will work with the NRLCA on implementation of six-day package, five-day mail delivery, in conformance with the requirements of the NRLCA collective bargaining agreement. What kinds of packages will be delivered on Saturday and what kinds will not? Package delivery will continue six days a week. The Postal Service will be publishing a more detailed implementation plan in the coming weeks which will include details regarding any restrictions on Saturday package delivery. Is there any additional charge for this Saturday delivery? Not at this time. Impacts to Residential Customers Why am I not getting mail on Saturday? Id prefer to not get mail on Monday. Saturday has the weeks lowest daily mail volume and more than a third of U.S. businesses are closed Saturday. Most businesses and household surveyed in a national Gallup Poll indicated Saturday would be the least disruptive day to eliminate mail delivery. That opinion was reinforced by Postal Service market research. Since Post Offices will remain open on Saturday, customers will have the same access to products and services at the Post Office that they do today. If I do not have a PO Box, can I pick up my mail at the local Post Office on Saturday? Yes. Customers who wish to have six days of mail delivery can rent a PO Box at their local Post Office. Mail addressed to a PO Boxes will be delivered on Saturdays. Can I pay for Saturday delivery if I want? Customers who wish to have six days of mail delivery can rent a PO Box at their local Post Office. Mail addressed to a PO Boxes will be delivered on Saturdays. How will this affect my Social Security check? We are giving six-month notice of these changes precisely so customers, including the government, can adjust production and mailing schedules to accommodate such preferences. Where a target in-home date might have been Friday/Saturday before, the schedule might need to be moved up for Thursday/Friday delivery. We believe all our advertising mail customers have both the technical and logistical means to make these adjustments. And we are available to consult with them to help them make decisions on when mail should be entered into the system to achieve their preferred delivery dates. If I received an attempted delivery notice, can I pick it up at the local Post Office on Saturday? Yes. Post Offices and other postal retail units that are open today will remain open on Saturdays. No Post Office will be closed on Saturday as the result of five-day delivery. 3 | February 2013

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Impacts to Business Customers How will this affect newspapers and advertising mailers who plan for their circulars to be in homes on Saturdays, when many consumers plan shopping trips and major purchases? The Postal Service is giving six-month notice of these changes precisely so customers can adjust production and mailing schedules to accommodate such preferences. Where a target in-home date might have been Friday/Saturday before, the schedule might need to be moved up to Thursday/Friday delivery. Advertising Mail customers have both the technical and logistical means to make these adjustments. And the Postal Service works closely with them, consulting and helping them make decisions on when mail should be entered into the system to achieve their preferred delivery dates. Many newspapers and periodicals are currently delivered on Saturdays. Why not also make an exception for them? Including these classes of mail in Saturday delivery would significantly erode the expected cost savings. The Postal Service will work with business customers to help them adjust to these changes and encourage them to enter their mail into the system earlier. Will Business Mail Entry Units be open on Saturdays? Business mail will continue to be accepted on Saturday and Sunday. Business Mail Entry Units will remain open on Saturday and/or Sunday. Post Offices currently accepting business mail on Saturday will continue to do so. Recent New Zealand 3-Day Announcement The New Zealand postal service just announced that it will be lowering its required weekly mail delivery to three days. Do you anticipate the Postal Service will eventually have to implement further reductions in its mail delivery schedule? No. A six-day package, five-day mail delivery schedule will meet the needs of USPS customers for the foreseeable future and produce the necessary costs savings as part of the Postal Services comprehensive five-year plan to regain financial stability. Economic Impacts How will the Postal Service actually achieve approximately $2 billion in savings by switching to five-day delivery? Reductions in the workforce? Work hours? Cost savings will be achieved through a combination of a reduction in workforce, mostly through attrition, and a reduction in operating expenses. Most of the savings will come from carrier labor and fuel costs. Other savings will be gained from processing, transportation, and maintenance. How quickly will projected cost savings be realized? Will it occur in year one, or will it take two or more years to recognize cost savings? We anticipate that switching to a six-day package, five-day mail delivery will achieve annual savings of approximately $2 billion once the plan is fully implemented. And how much of that savings is offset by business you will lose either mailings that wont happen at all, or that will move to other delivery methods? The Postal Service included those factors in its cost saving analysis. The Postal Service estimates a net annual savings of approximately $2 billion once our plan is fully implemented.

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What do you say to some critics who suggest reducing service is not an appropriate measure to regain financial stability? The Postal Service made this decision after listening to its customers. Our customers understand our financial situation and support this change. This decision reflects a responsible approach in adapting to the changing market demand. With the emergence of digital communications, there has been a rapid decline in First-Class Mail volumes and revenue. At the same time, the rising level of e-commerce has led to a 14 percent growth in volume of USPS package delivery services in the last two years. Wont some of the cost savings of eliminating a day of delivery be offset by overtime needed on the first day back after the weekend (either Monday or Tuesday, depending on whether Monday is a federal holiday)? No. Efficient scheduling of our workforce will eliminate the need for additional overtime. When we calculate the overall savings, we are taking the additional processing needed on Monday or Tuesday into account. Is this all the Postal Service needs to return itself to financial viability? The switch to six-day package, five-day mail delivery is one of many important components of the USPS five-year plan to financial stability. The Postal Service will be releasing an updated plan in the coming weeks. Impacts to Employees How many fewer employees will be necessary? We are currently working to define the employee impact and will be meeting with our unions and management associations to discuss the employee impact in accordance with our collective bargaining agreements and other obligations. The estimated impact on fulltime equivalent assignments would be approximately 35,000, including supervisory positions. Most of these savings come from the city delivery category. The Postal Service will accomplish this reduction in complement through attrition, reassignment and the other tools available to us. The Postal Service has a proven track record of working with affected employees. In fact, the Postal Service has reduced over 193,000 positions since 2006 without major layoffs. Will there be an incentive offered to carriers? We are currently working to define the effects on employees. We will meet with our unions, management associations and employees in the near future to discuss this impact in accordance with our bargaining agreements. How does this affect my bid position? Bid positions and employees will be impacted by this delivery change. We are currently working to define the effects on employees. We will meet with our unions, management associations, and employees in the near future to discuss this impact in accordance with our bargaining agreements.

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