Ups Mail Innov Combined Pres

UPS Mail Innovations/US Postal Service Forum

Greg Jones I John Walsh

2

Domestic

Type date here Month DD, YYYY (Date written out)

Our plan is to continue to grow and expand our company over the next few years.UPS Mail Innovations - History and Future Vision• 2001: UPS Acquires RMX; Re-brands as UPS Mail Innovations

• 2002: UPS MI wins contract to carry ADP volume

• 2003: 22 new Automatic Processing Systems (APS) added

– New Facilities added in Kansas City and New York

• 2004: Omnisort International (OSI) Acquired; adding international capability

– New Facilities added in Chicago and Hartford

• 2005: UPS MI begins mail pick up utilizing UPS drivers– New facility in Auburn WA

• 2006: New Facilities added in Atlanta and San Francisco

• 2007: 2007 Postal Rate Case

– New Website launched (March)

– New Facility added Raleigh (Oct)

4

What do we do?UPS Mail Innovations works with a portfolio of domestic and international postal authorities to ensure that you receive consistent, reliable service levels and access to better postal rates.

The benefits to you:

• Increased labor savings by greatly reducing mail preparation time

• Access to better postal rates

• Service levels to meet your transit requirements

• Ease of use, quick startup and hassle free

• Reliability from the strength of the UPS network

• National Account status with the USPS

5

Streamlining the Process: Automated Processing SystemsThe only postal expeditor operating a total of 22 Automated Processing Systems (APS) nationwide, designed specifically to streamline postal automation requirements for qualified flat mail.

Customer benefits:

• Increased visibility

• Increased acceptance of mail piece size and design

• Enhanced address verification services

• Automated cost-center billing

• CASS Certification

• Ensures better transit time through more efficient sorting

6

Regional Processing Facilities and Servicing Regions

UPS Mail Innovations® has 13 Regional Processing Facilities that will pickup, process, sort, encode and prepare your mail for induction within:

Our service commitment is to deliver mail to the USPS – Locally within 24 hours*

– Nationally within 48 hours**Represents average induction times into USPS

7

Leveraging the power of UPS

International Postal Work-Share Programs* How do we do it?

• Postal authority mail flown via commercial airlines

We manage a number of global postal relationships to ensure transit standards and access to better postal rates with delivery to over 200 countries

*Includes all mail types

• Postal authority mail confirmed at entry point

• Final delivery by post

Local Post OfficeCustomer Location Mail Innovations Facility Five Postal Authorities Worldwide

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Content that qualifies for UPS Mail Innovations

Examples of contents that qualify*

AdvertisementsAgendasAnnouncementsAnnual ReportsApparelBookletsBrochuresBulletinsCalendarsCatalogsChartsCircularsCollege Confirmation of AcceptanceCollege Offer to AttendComputer PrintoutsConvention Materials

Copied DocumentsCourse MaterialsDiplomasDirectories and Provider ListingsEnrollment PacketsEnvironmental NoticesFinancial Aid InformationFloppy Disks/CDsFlyersFoldersForms (Blank or Copies)FundraisingGuidebooksHandbooksInformation Kits

InvitationsJournalsLicense PlatesMagazinesMarketing MaterialsMedia GuidesMembership ListsMembership PacketsNews ReleasesNewslettersOutreach ProgramsPhotographsPricing and Catalog SheetsProduct and Service ProspectusesPromotional Items

Proxy NoticesQuestionnairesRecall NoticesReportsRetirees InformationSchedulesSpecification SheetsTechnical Manuals

Tests and Study MaterialsWelcome and New Account KitsX-Rays

Bills/InvoicesBirth CertificatesLicensesNoticesPayment CouponsPersonal CorrespondenceRegistrationsStatementsStock Certificates

(First Class Enclosures can be considered)

Contents that do not qualify

*All content accepted for U.S. Outbound International Mail

Shape and Size Requirements for Domestic Mail Flat Mail

Weight: 1 ounce – 15.99 ounces (wrapped, unwrapped, sleeved or enveloped and exceeds at least one of the following minimums:

Minimum MaximumHeight: 6 ⅛” Height: 12”Length: 11 ½” Length: 15”Thickness: ¼” Thickness: ¾”

APS COMPATIBLE FLATS ACCEPTANCEMinimum MaximumHeight: 5” Height: 10”Length: 5” Length: 14 ¼”Thickness: 0.02” Thickness: ¾”

Examples: Advertisements • Booklets • Brochures • Catalogs • Information Kits • Guidebooks • Membership Materials • Pricing Sheets • Questionnaires • Reports • Schedules • Welcome Packets

Bound Printed Matter

Weight: 1 pound – 15 pounds. Generic in content, wrapped, unwrapped, sleeved or enveloped and exceeds at least one of the following minimum:

FLATSMinimum MaximumHeight: 6 ⅛” Height: 12”Length: 11 ½” Length: 15”Thickness: ¼” Thickness: ¾”

MACHINABLE PARCELMinimum MaximumHeight: 3” Height 17”Length: 6” Length: 34”Thickness: ¼” Thickness: 17”

Examples: Annual Reports • Catalogues • Computer Printouts • Directories • Handbooks • Information Kits • Technical Guides • Telephone Directories

Lightweight Product

Weight: 1 ounce – 15.99 ounces Small Packages that do not meet the dimensional criteria of Machinable parcels:

– Rolls or tubes up to 26” in length and merchandise samples not individually addressed

– Unwrapped, Paper – wrapped or sleeve-wrapped articles– Articles enclosed in envelopes that are not letter-sized,

flat-sized or machinable

Examples: CDs • Diplomas • Direct Mail Promotions • Diskettes • Posters • Product Samples • Apparel

Media Mail

Weight: None; subject to 1 lb. minimum rate. Maximum weight: 70 lbs. Dimensions: no more that 108 inches in combined length and girth

Media Mail includes specific types of Package Services that meet additional eligibility standards for single-piece and presorted rates. Advertising restrictions apply.

Examples: Books (at least eight pages) • Film (16mm or narrower) • Printed Music • Printed Educational Charts • Loose-leaf Pages • Binders (consisting of medical information) • Computer-readable media

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Benefits to You:•Cost Savings

– Savings up to 25% off First Class

– No need pre pay postage, UPS Mail Innovations will invoice you

– Residential deliveries with no surcharge

•Labor Savings– No need to weigh mail or apply postage

– No trips to the Post Office

•Ease of Use– Flexible pick up times to meet customers needs

– Quick and easy account setup and implementation

– Address the mail piece, we do the rest….

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Value Added Services– Saturday Delivery at no additional charge

– Delivery to both PO Boxes and APO/FPO

– Online Reporting

– Cost Center Reporting / Billing

– Postal Affairs managers

– Web Based Tracking• Internal Mail Innovations Tracking

– (View your mail progress from pick up until postal induction)

• USPS Delivery Conformation – (Available only on Parcels)

– Outstanding Customer Service

Reliable Customer Service You Can Expect From UPS

Account ExecutiveKnowledgeable professionals recognizing the mailing communication needs of top US Markets

NationwidePostal Liaisons

Certified professionals ensuring quality work-share service standards & current postal regulations

On-Site Operations Manager

Experts in postal requirements and transportation management

Customer Service Support

Centralized 800# assistance: 800-500-2224

On-line Information and Customer Support

www.upsmailinnovations.com

UPS Mail Innovations’ customers are backed by a team of responsive, reliable and flexible mailing professionals to assist every step of the way

14© Copyright 2007 United Parcel Service of America, Inc. UPS, the UPS brandmark and the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.UPS Mail Innovations®

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UPS Mail Innovations International Mail

Pricing is based on specific mail characteristics

Mail Characteristics

Geographic Distribution

Service Level

(Transit Time)

Weight per Piece

(up to 4lbs. or 2kg)

Specialty Services

Special Customer Request

Examples

Costs Vary by Region

Priority vs. Economy

Pieces under 2 oz. may be assessed an additional

charge per piece

Business Reply, Letter-Shop Services

Specific indicia or delivery method

1

First Class (Priority) Post Options

USAUSA

International International Priority AirmailPriority Airmail

FIRST-CLASS MAILU.S. POSTAGE

PAIDPermit No. 9032Zip Code 11430

PAR AVIONINTERNATIONAL

PRIORITY AIRMAIL

SwedenSweden

Direct LinkDirect Link

FranceFrance

La PosteLa PosteEn cas de non distribution,

priere de retourner `a:OSS c/o DCI-TIM 02 /

BP1193421 VILLEPINTE

PRIORITAIRE / PRIORITY

PORT PAYEAutorisation n DCI

98/09

FRANCE

CanadaCanada

Canadian Postal Canadian Postal CorporationCorporation

SwitzerlandSwitzerland

PRIORTY

PRIORITAIRE

Swiss PostSwiss Post

AAPP

CH-8058 Zurich 58

000 MTS

Belgium

Belgian Post

PR

IOR

ITY

EC

ON

OM

Y

Postage Indicia — InternationalAll indicia’s are color-coded — red for priority, black for economy service levels. These are recognizable worldwide

IndiciaDenotes postage payment, used in place of meter or postage stamp

Mail ClassThe classification of domestic mail according to the content and service category

Return AddressCertain Foreign posts require a return address in destination country. If customer does not own one, UPS Mail Innovations will provide one.

AccountabilityDirect Costs

Savings

LaborSavings

CustomerBenefits

Customer Benefits

• No Pre- Paying for Postage

• Up to 40% Postage Savings over USPS

• Continuous Transit Testing

• Return Mail

Eliminates

• Mail Room Sorting

• Posting & Metering

• Trips to the Post Office

*Overall solution will reduce costs/improve

your mail room productivity

International Mail Service PortfolioThrough our UPS Mail Logic® program, solutions range from expedited to non-urgent delivery of mail from within the U.S. to more than 220 countries worldwide

* Transits are quoted in average business days from receipt.

UPS Mail Logic®

Service Level Time in Transit*

Priority 4-8 days

Economy 7-14 days

IPA (Int’l Priority Air Mail) 4-8 days

ISAL (Int’l Surface Air Lift) 7-14 days

Direct Mail Injection Varies by Destination

How It Works – UPS International Mail is easy to use

• Customer has 5lbs of mail per shipment

• Customer packages their unsorted, un-metered, international mail

• Prepares a UPS Freight collect Package

• UPS driver picks up

• Mail transported to The UPS MI facility

Customer Location

Customer Location

• UPS delivers the Int’l Mail

• Shipment scanned into receiving

• Mail is weighed and sorted

• Indicia applied

• Mail bagged and tagged

• Manifests generated

• Mail transported to JFK /LAX

MI - OSI Facility


Customer Location MI - OSI Facility


Multiple Postal Authorities Worldwide

• Postal authority mail flown via commercial airlines

Customer Location MI - OSI Facility


Multiple Postal Authorities Worldwide

•Postal authority mail confirmed at entry point

• Final delivery by local postal administration

Local Post Office

25

Domestic

Type date here Month DD, YYYY (Date written out)

26

3.0 Days3.5 Days

4.0 Days and Above

UPSMI Average Transit TimeWest Hartford, CT

2.0 Days2.5 Days

Transit Times May 2007: Origin CT

Sample Only, this will be updated Monthly with maps for each RPF

19.6

12.29

53.6

38.94

76.374.2

87.789.1

93.194.85

95.997.21

97.498.4

98.499.24

98.999.57

99.399.7

0

10

20

30

40

50

60

70

80

90

100

% Delivered

1 2 3 4 5 6 7 8 9 10

Average Delivery Days

USPS First Class UPS Mail Innovations

UPS Mail Innovations Vs. First Class

Day 4 UPS MI Percent Delivered is higher than USPS First Class

Day 4 Results

MI: 89.1%

USPS: 87.7%

** Based on Q2 Actual delivery confirmation data

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Endorsements

Q: What do you mean by Endorsements?

A: First Class Mail is Forwarded on to customers that move and returned if undeliverable, this is included in the rate. When shipping with Mail Innovations the mail is now sent Standard and the customer needs to choose the appropriate endorsements based on their needs. Each specific endorsement has a charge associated if the mail is returned as undeliverable.

Q: Which Endorsement if Right for me?

A: That depends on a variety of factors, such as:

– What do you do with returned mail?

– What is the value of the items being shipped?

– How up to date is your customer database?

Q: Can I have more than one endorsement?

A: Yes, UPS Mail Innovations can handle Multiple Endorsements, the mail would either need to be manually separated when turned over to Mail Innovations, or a barcode containing different “Cost Centers” must be on every piece.

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EndorsementsWhat do I mean by Endorsements?How Do you want undeliverable mail pieces handled?

Which Endorsement is Right for you?Return Service: Anytime you want undeliverable mail returned

Address Service: Mail piece is forwarded and you receive notification of new address

Forwarding Service: Typically best for companies whose customers frequently change addresses

Change Service: Receive notification of new address, mail not returned

No endorsement: For items you don’t need back

Can you have more than one endorsement?

What Happens with Undeliverable Parcels?

ADDRESS SERVICE REQUESTED FORWARD SERVICE REQUESTED RETURN SERVICE REQUESTED CHANGE SERVICE REQUESTEDForwarding and return. New separate Forwarding and return. New address No Forwarding, only return. New No forwarding or return. New address notification provided. notification provided only with return. address notification provided. address notification provided.

1-12 months: 1- 12 months:

13-18 months: 13-18 months:

1 oz. 1 oz. 1 oz. 1 oz. 2 oz. 2 oz. 2 oz. 2 oz.3 oz. 3 oz. 3 oz. 3 oz.4 oz. 4 oz. 4 oz. 4 oz.5 oz. 5 oz. 5 oz. 5 oz.6 oz. 6 oz. 6 oz. 6 oz.7 oz. 7 oz. 7 oz. 7 oz.8 oz. 8 oz. 8 oz. 8 oz.9 oz. 9 oz. 9 oz. 9 oz.10 oz. 10 oz. 10 oz. 10 oz.11 oz. 11 oz. 11 oz. 11 oz.12 oz. 12 oz. 12 oz. 12 oz.13 oz. 13 oz. 13 oz. 13 oz.14 oz. 14 oz. 14 oz. 14 oz.15 oz. 15 oz. 15 oz. 15 oz.15.99 oz. 15.99 oz. 15.99 oz. 15.99 oz.

*Weighted Fee is First Class Postage multiplied by 2.472 and rounded up to the next whole cent.

$4.60

$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50

$11.38

$2.79$3.22$3.64$4.06$4.48$4.90$5.32$5.74$6.16

$2.79$3.22$3.64

Address Service USPS Return Charges Parcels

Mailpiece returned with new address or reason for nondelivery attached; single piece First-Class rate charged.

Mailpiece forwarded at no charge. Separate notice of new address or reason for nondelivery provided; mailpiece disposed of by USPS. Manual Notice $0.50 each. Electronic Notice $0.06 each.

Mailpiece forwarded at no charge; separate notice of new address provided (manual $0.50, electronic $0.06 each).

Mailpiece returned with new address attached. Weighted Fee* charged.

Mailpiece returned with reason for non-delivery attached. Weighted Fee* charged.


After 18 months or if undeliverable at any time:

After 18 months or if undeliverable at any time:Mailpiece returned with reason for non-delivery attached. Weighted Fee* charged.

$4.06$4.48

$6.58$7.00

$4.90$5.32$5.74$6.16

$7.42$7.84

$11.38$11.38

Forward Service USPS Return Charges Parcels

$6.58$7.00$7.42$7.84$11.38$11.38$11.38

Return Service USPS Return Charges Parcels

$1.13$1.30$1.47$1.64$1.81$1.98$2.15$2.32$2.49$2.66$2.83$3.00$3.17$4.60$4.60

Change Service USPS Return Charges

$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50

Endorsement Charges for Under 1lb ParcelsMost Frequently Used Options

What Happens with Undeliverable Flat Mail?

Endorsement Charges for Flat Mail

ADDRESS SERVICE REQUESTED FORWARD SERVICE REQUESTED RETURN SERVICE REQUESTED CHANGE SERVICE REQUESTEDForwarding and return. New separate Forwarding and return. New address No Forwarding, only return. New No forwarding or return. New address notification provided. notification provided only with return. address notification provided. address notification provided.

1-12 months: 1- 12 months:

13-18 months: 13-18 months:

1 oz. 1 oz. 1 oz. 1 oz. 2 oz. 2 oz. 2 oz. 2 oz.3 oz. 3 oz. 3 oz. 3 oz.4 oz. 4 oz. 4 oz. 4 oz.5 oz. 5 oz. 5 oz. 5 oz.6 oz. 6 oz. 6 oz. 6 oz.7 oz. 7 oz. 7 oz. 7 oz.8 oz. 8 oz. 8 oz. 8 oz.9 oz. 9 oz. 9 oz. 9 oz.10 oz. 10 oz. 10 oz. 10 oz.11 oz. 11 oz. 11 oz. 11 oz.12 oz. 12 oz. 12 oz. 12 oz.13 oz. 13 oz. 13 oz. 13 oz.14 oz. 14 oz. 14 oz. 14 oz.15 oz. 15 oz. 15 oz. 15 oz.15.99 oz. 15.99 oz. 15.99 oz. 15.99 oz.

*Weighted Fee is First Class Postage multiplied by 2.472 and rounded up to the next whole cent.

$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50

Change Service USPS Return Charges

$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$2.67

$2.84$4.60$4.60

$1.99$2.16$2.33$2.50

$1.31$1.48$1.65$1.82

Return Service USPS Return Charges Flats

$0.80$0.97$1.14

$7.03$11.38$11.38$11.38

Forward Service USPS Return Charges Flats

$5.76$6.18$6.61$6.61

$7.03$11.38$11.38

$3.24$3.66

$5.76$6.18

$4.08$4.50$4.92$5.34


Mailpiece returned with reason for non-delivery attached. Weighted Fee* charged.


After 18 months or if undeliverable at any time:

After 18 months or if undeliverable at any time:Mailpiece returned with reason for non-delivery attached. Weighted Fee* charged.

Mailpiece returned with new address or reason for nondelivery attached; single piece First-Class rate charged.

Mailpiece forwarded at no charge.

Separate notice of new address or reason for nondelivery provided; mailpiece disposed of by USPS. Manual Notice $0.50 each. Electronic Notice $0.06 each.

Mailpiece forwarded at no charge; separate notice of new address provided (manual $0.50, electronic $0.06 each).

$1.98$2.40$2.82

Address Service USPS Return Charges Flats

$11.38

$1.98$2.40$2.82$3.24$3.66$4.08$4.50$4.92$5.34

$4.60

$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50$0.06 or $0.50

Most Frequently Used Options

32

Sample Mail Innovations Shipping LabelShip From: Origin address of the mail piece

Ship To: Destination address of the mail piece

2-D Barcode Containing: Zip Code, Package ID (customer order #), and Cost Center

USPS Delivery Confirmation: Barcode scanned for further tracking while in the postal stream

Next Day Service – Green

Same Day Service - Yellow

2007 UPS Pick Up Service Map

34

Flat Flexibility Test

Length runs parallel to the surfaceFlats over 10 inches long that contain a rigid

insert; length perpendicular to surface, Min 2” flexibility required

Flats under 10 inches long that contain a rigid insert; 1” Min Flexibility requires

NOT QUALIFIED

Shape plays an important role for Domestic Mail

Flats• Large flat, rectangular, mail piece • No thicker than 3/4 inch• 1 – 15.99 ounces

Postcard• Rectangular cardstock mail piece not contained in an envelope

Letter• Small rectangular mail piece no thicker than ¼ inch

Lightweight Parcels• A three-dimensional mail piece contained in a box, thick envelope, or tube• 1 – 15.99 ounces

Qualified Domestic

36

ARTS!™ Accurate Reporting and Tracking System

Our web-based distribution management system gives you:

• Quick access to shipment data

• Improved customer service

• Financial management

• Complete distribution management documentation

• Cost center level detail

37

Our enhanced tracking capabilities allow complete visibility of your mail piece.

• Pickup

• Processing

• Close of manifest

• Transportation

• USPS® acceptance


• Final delivery

ARTS!™ Accurate Reporting and Tracking System

ARTS Reporting DemoBrowse to: www.upsmailinnovations.com Click the ARTS!™ Customer access to reporting and package tracking link from the side bar, then select ARTS!™ Customer Reports

Username: 133ZZZM Password: pass133

Date Range Reports Enter Date Range: 3/23/2004 – 4/17/2004 Choose from four report samples Shipment Control Number Reports Enter Shipment Control #: 010000016225 Choose from 3 report samples Cost Center Reporting Enter Cost Center: New Customer Info

ARTS Tracking DemoBrowse to: www.upsmailinnovations.com Click the ARTS!™ Customer access to reporting and package tracking link from the side bar, then select Package Tracking Sample Package ID #: CGISH000116629 Delivery Confirmation #: 9102084383041101186729

Our enhanced tracking capabilities allow complete visibility of your mail piece.

• Pickup

• Processing

• Close of manifest

• Transportation



• Final delivery

40

UPS Mail Innovations shipping control form guide

This shipping information is preprinted by the Regional Processing Facilities. If changes are required, please call 1.800.500.2224

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May 14, 2007

PKG# 123456791MMS# 011320227070000101

I* X

11 570

Time Sensitive MaterialUS Postage Paid

UPS Mail Innovations

ZIP 01844

PRSRT STD

Postage Indicia — DomesticB

OU

ND

PR

INT

ED

M

AT

TE

R

Dated MailedDate on which postage is paid, preparation is verified and mail is inducted into the United States Postal Service®

IndiciaDenotes postage payment, used in place of meter or postage stamp

Mail ClassThe classification of domestic mail according to the content andservice category

Destination Zip CodeZip code of delivery address

Sort CodeAlphanumeric scheme used for in-house mail sortation andpreparation to destination USPS® facilities

EndorsementAn authorized marking on a mail piece that shows handlinginstructions, a special service or a request for an ancillary service

Unique Mail Identification NumberThe ID number required for reconciling individual pieces to a manifest to ensure postage is calculated and all pieces are traceable

FL

AT

M

AIL

42

Detailed billing reports: Page 1

UPS Mail Innovations provides you with a sophisticated, automated

reporting and billing system.

Features include:

• Weekly reporting schedules

• Printed and electronic formats

• Consolidated billing for domestic and international mail

• 2nd tier cost center billing

• Mail piece distribution

• Processing dates

• Product type

• Piece counts by weight category

• Postage expenses

• Total savings

43

Flat Mail

Weight: 1–15.99 ounces

Description: Wrapped, unwrapped, sleeved or enveloped and exceeds at least one of the following minimums:

Minimum Maximum

Height: 6⅛" Height: 12"Length: 11½" Length: 15"Thickness: ¼" Thickness: ¾"

APS COMPATIBLE FLATS ACCEPTANCE

Minimum Maximum

Height: 5" Height: 10"Length: 5" Length: 14¼"Thickness: 0.02" Thickness: ¾"

Examples:

Advertisements Booklets Brochures Catalogs Information Kits Guidebooks Membership MaterialsPricing Sheets QuestionnairesReports Schedules Welcome Packets

44

Under 1 pound Parcel

Weight: 1–15.99 ounces

Description: Small packages that do not meet the dimensional criteria of Machinable Parcels:

• Rolls or tubes up to 26" in length and merchandise samples not individually addressed

• Unwrapped, paper-wrapped or sleeve-wrapped articles

• Articles enclosed in envelopes that are

not letter-sized, Flat-sized or Machinable

Examples:

CDsDiplomas Direct Mail Promotions Diskettes PostersProduct Samples Apparel

45

Bound Printed MatterWeight: 1–15 pounds

Description: Generic in content, wrapped, unwrapped, sleeved or enveloped and exceeds at least one of the following minimums:

Minimum Maximum

Height: 6⅛" Height: 12"Length: 11½" Length: 15"Thickness: ¼" Thickness: ¾"

MACHINABLE PARCELS

Minimum Maximum

Height: 3" Height 17"Length: 6" Length: 34"Thickness: ¼" Thickness: 17"

Examples:

Annual ReportsCatalogsComputer Printouts Directories Handbooks Information Kits Technical Guides Telephone Directories

46

Media Mail

Weight: 1–70 pounds. Subject to 1 pound minimum rate.

Description: Media Mail includes specific types of Package Services matter that meet additional eligibility standards for single-piece and presorted rates. Advertising restrictions apply.

Dimensions: no more than 108 inches in combined length and girth

Examples:

Books (at least eight pages) Film (16mm or narrower) Printed MusicPrinted Educational ChartsLoose-leaf Pages Binders (consisting of medical information) Computer-readable media

47

Qualified international mailThis mail qualifies for international shipments only, not for domestic shipments

PostcardRegular cardstock mail piece not contained in an envelope

Minimum Maximum

Height: 3½" Height: 4¼" Length: 5" Length: 6"Thickness: 0.007 Thickness: 0.0016

PackageA three-dimensional mail piece contained in a box, thick envelope or tube

Maximum

Length and girth*: 130"Weight: 70 pounds

* Distance around the thickest part of the package

LetterSmall rectangular mail piece

Minimum Maximum

Height: 3½" Height: 6⅛"Length: 5" Length: 11½"Thickness: No thicker than ¼"

48

UPS Facts

The UPS business was built over 100 years…

1907–1913 1919 1940s to 1993 1993 to 2007+

AmericanMessenger

Service

MerchantsParcel

Delivery

UPSToday

UnitedParcel

Service

UnitedParcel

Service

1930’s

Messengerservice

Delivery fordepartment

stores

Common carrierAir ExpressInternational

Wide arrayof transportation& supply chain

solutions offerings

The numbers are mind-boggling

• Over 200 countries and territories served

• 94,542 vehicles worldwide

• 427,700 employees

• 8th largest airline

• 40,000 drop boxes

• 6,700 retail locations worldwide

• 17,000 authorized shipping outlets

• 1,788 operating facilities

• 15.6 million packages delivered daily

• 15 million daily tracking requests on ups.com

UPS Corporate Information

• Founded in Seattle, Wash. August 28, 1907• Headquarters Atlanta, Ga.• Worldwide web address www.ups.com• Chairman and CEO Michael L.

Eskew• 2006 revenue $47.5 billion• Employees 427,700

(360,600 U.S.; 67,100 International)

http://www.ups.com/

UPS Volume and Revenue• 2006 revenue $39.5 billion

• 2006 delivery volume 3.9 billion

• Daily delivery volume 15.6 million • Daily U.S. air volume 2.3 million

• Daily international volume 1.8 million

UPS Package Operations• 2006 revenue $39.5 billion• 2006 delivery volume 3.9 billion packages and documents• Daily delivery volume15.6 million packages and documents• Daily U.S. air volume 2.3 million packages and documents• Daily international volume 1.8 million packages and documents• Service area More than 200 countries and territories• Every address in North America and Europe• Customers 7.9 million daily (1.8 million pick-up, 6.1 million delivery)• UPS.com Average 15 million daily on-line tracking requests• Retail access The UPS Store, 4,500; Mail Boxes Etc. 1,300; UPS Customer Centers,

1,000; Authorized outlets, 17,000; UPS Drop Boxes, 40,000

• Operating facilities 1,788• Delivery fleet 94,542 package cars, vans, tractors, motorcycles• UPS jet aircraft 284; 8th largest airline in the world• Chartered aircraft 323• Daily flight segments Domestic – 1,130; International – 796• Airports served Domestic – 424; International – 389

UPS Supply Chain Solutions• 2006 net revenue $8 billion

• Key services Logistics and distribution; transportation and freight (air, sea, ground, rail); freight forwarding;

international trade management, and customs brokerage.

• Specialty services Service parts logistics; technical repair and configuration; supply chain design and

planning, returns management.• Facilities 936 facilities in more than 120 countries; 35 million

sq. ft.• UPS Freight• Key services Leading provider of less-than-truckload services

coast-to-coast• Delivery fleet 6,792 tractors; 22,846 trailers• Facilities 215+ service centers

Air Hub

Network Facility

UPS Supply Chain Solutions Facilities

Philadelphia

LouisvilleOntario

Miami

Rockford

Cologne

Principal UPS Air HubsAmericas, Europe, Asia Pacific

Hong KongDubai Taipei

Clark

Singapore

GuangzhouMumbai

Shanghai

Chennai

Delhi

UPS Global Infrastructure

– Service to more than 50 countries and territories

– More than 340,000 employees

– More than 90,000 delivery vehicles

– Intra-region flight segments:

• 68 Central and South America

• 73 Canada

• 1,082 United StatesUPS Supply Chain Solutions Facilities

Philadelphia

LouisvilleOntario

Miami

Rockford

Buenos Aires

São Paulo

La Paz

Caracas

QuitoBogota

Mexico City

San SalvadorPanamá

Los Angeles

Seattle

Guadalajara

Air Hub

Network Facility

UPS’s Presence in the Americas

UPS Awards – Business Excellence

• FORTUNE magazine has ranked UPS:– “America’s Most Admired” in its industry

for 20 years– “World’s Most Admired” in its industry

for 6 years • Other recognition

– UPS ranked 32 out of 100 brands in Business Week’s 2006 Best Global Brands issue

– In 2004, UPS was ranked highest in customer satisfaction for domestic air, ground and international delivery, according to the J.D. Power and Associates Small-Package Delivery Service Business Customer Satisfaction StudySM

• UPS is already recognized as a strong, valuable brand, with considerable momentum:

– Ubiquity, emotional attachment to the brand in the U.S.

– Success of “What can Brown do for you?” in the U.S. to move beyond package delivery

– Recognition in FORTUNE, Interbrand, CoreBrand, Harris and other 3rd party surveys

– Steady improvements in awareness and quality ratings outside the U.S.

– UPS brand valued at $15 billion (2002 FutureBrand methodology) to $21.8 billion (Millward Brown 2005)

UPS - Starting from a position of strength

UPS recently ranked 32 in InterBrand’s list of top 100 global brands

UPS has scored increasingly higher in the Fortune Most Admired survey on being “socially and environmentally responsible”

• Year Rank (among all companies)• 2002 9th• 2003 5th• 2004 3rd• 2005 1st• 2006 1st

2006Note: 2006 was highest score ever, ranked first in Global Most Admired survey for first time

Reputation Management

Reputation Management Awards and Recognition – Socially Responsible

• Points of Light Foundation National Award for Volunteerism (2006)

• EPA Clean Air Excellence Award (2006)

• Business Ethics magazine top 100 socially responsible companies (2006)

• World Economic Forum global top 100 most sustainable companies (2006)

• Wall Street Journal/Harris 4th best corporate reputation (2005)

Reputation ManagementAwards and Recognition – Diversity

• Black Professional Magazine top 25 companies for African Americans (2006)

• Black Enterprise Magazine top 40 companies for diversity (2006)

• WIPP top company for supporting women business owners (2006)

• DiversityBusiness.com 18th best company for women & minority business owners (2006)

• Hispanic Magazine top 100 companies for Hispanics (2005)

• Latin Business Magazine top company for Hispanics (2005)

• WENC top company for supplier diversity (2005)

Reputation Management Awards and Recognition – Technology & Innovation

• “Most IT enabled company of the year” at 13th annual Computing Awards event (2006)

• World Trade Magazine “most innovative use of technology” (Trade Direct)

• American Business Awards 2005 most innovative company (Worldport)

• Top 10 company, 2005 Online Customer Respect Study

• ComputerWorld Magazine best companies to work in IT

• Web Marketing Assn. Award for best corporate Web sites (2005)

65

USPS Information

Quick Facts on the Postal Service

• Process and deliver more than 213 billion pieces of mail — every year.

• Nearly 703 million pieces per day • More than 29 million pieces per hour • More than 488,000 pieces per minute • More than 8,000 pieces per second

USPS: By the Numbers • Annual Revenue of nearly $73 billion. • Are the second-largest employer in the United States. • Employs nearly 700,000 employees. • Pay nearly $2 billion in employee salaries and benefits

every two weeks. • Does not receive tax dollars for operations. They are a

self-supporting agency, using the revenue from the sale of postage and products to pay expenses.

• Handles more than 46 percent of the world's card and letter mail volume — delivering more mail to more addresses to a larger geographical area than any other post in the world.

• Operates the largest civilian vehicle fleet in the world with more than 216,000 vehicles driving more than 1.2 billion miles each year and using nearly 121 million gallons of fuel.

New Postal Law Key Provisions and Implications

December 2006 Former Postal Rate Commission (PRC) renamed “Postal Regulatory Commission”

Changes the structure by which rates are adjusted

Segments postal services into two categories “Market Dominant” & “Competitive”

Creates a new environment in which the Postal Service operates

Two Product Categories

First-Class Mail

Periodicals

Standard Mail

Single-Piece Parcel Post

Media Mail

Bound Printed Matter

Library Mail

Special Services

Single-Piece International

Priority Mail

Expedited Mail

Bulk Parcel Post

Bulk International Mail

CompetitiveMarket-Dominant

Market Dominant Products - Rates

Future rate increases tied to Consumer Price Index (CPI) by class (begins mid 2008).

USPS to file 45 days before new rates become effective.

Implications

Annual, predictable increases, limited to (CPI)

Cost control is critical, since some USPS costs like fuel or health benefits may rise at rates above CPI.

Competitive Products - Rates New world - allows for pricing flexibility, with price floor

TBD (begins mid 2008).

Board determines 30 days before new rates become effective.

Implications

Rate predictability for mailers - moderate annual increases.

Customization for commercial mailers - new potential options such as geographic pricing, fuel surcharges, new services / alliances.

USPS Priority Mail vs. UPS Ground Commercial Package

USPS

(2-3 days TNT)

Advantages:

•No DAS surcharge

•No residential surcharge

•No Saturday delivery fee

•No fuel surcharge

•No address correction fee

•Free Delivery Confirmation

UPS(1-5 days TNT)

Advantages:

•Tracking

•Scheduled delivery commitment

•TNT Guaranteed

Proposed USPS 2007 RatesUSPS Zones 2 3 4 5 6 7 8

WeightLetter

1 4.65 4.65 4.65 4.65 4.65 4.65 4.652 4.65 5.05 5.40 6.15 6.55 6.85 7.303 5.15 5.90 6.55 8.10 8.80 9.35 10.154 5.90 6.90 7.90 10.00 11.00 11.70 12.855 6.55 7.60 9.10 11.60 12.90 13.85 15.306 7.10 8.25 10.25 12.95 13.10 14.75 16.057 7.65 8.85 11.30 13.95 14.35 16.40 18.308 8.10 9.60 12.25 14.90 15.60 18.00 20.559 8.50 10.35 12.80 15.90 16.85 19.60 22.85

10 8.85 10.95 13.40 16.95 18.25 21.30 23.852007 Daily Rates +3.50% Fuel Surcharge Proposed USPS 2007 Rates

UPS Zones 2 3 4 5 6 7 8WeightLetter

1 4.14 4.23 4.37 4.54 4.78 4.86 4.982 4.18 4.44 4.89 4.97 5.33 5.46 5.793 4.22 4.65 5.13 5.30 5.69 5.89 6.434 4.34 4.81 5.42 5.65 6.02 6.23 6.845 4.64 4.90 5.68 5.92 6.30 6.56 7.266 4.71 5.10 5.78 6.10 6.51 6.83 7.507 4.98 5.26 5.92 6.31 6.75 7.09 7.858 5.18 5.43 6.08 6.46 6.98 7.43 8.389 5.33 5.59 6.20 6.62 7.15 7.83 8.92

10 5.52 5.63 6.35 6.81 7.45 8.39 9.53

*yellow highlighting indicates price advantage based on published rate cards

(Puerto Rico is 6 days TNT)

USPS Priority Mail vs. UPS Ground Residential Package

USPS (2-3 days TNT)

Advantages:

•No DAS surcharge

•No residential surcharge

•No Saturday delivery fee

•No fuel surcharge

•No address correction fee

•Free Delivery Confirmation

UPS(1-5 days TNT)

Advantages:

•Tracking

•Scheduled delivery commitment

•TNT Guaranteed

Proposed USPS 2007 RatesUSPS Zones 2 3 4 5 6 7 8

WeightLetter

1 4.65 4.65 4.65 4.65 4.65 4.65 4.652 4.65 5.05 5.40 6.15 6.55 6.85 7.303 5.15 5.90 6.55 8.10 8.80 9.35 10.154 5.90 6.90 7.90 10.00 11.00 11.70 12.855 6.55 7.60 9.10 11.60 12.90 13.85 15.306 7.10 8.25 10.25 12.95 13.10 14.75 16.057 7.65 8.85 11.30 13.95 14.35 16.40 18.308 8.10 9.60 12.25 14.90 15.60 18.00 20.559 8.50 10.35 12.80 15.90 16.85 19.60 22.85

10 8.85 10.95 13.40 16.95 18.25 21.30 23.852007 Daily Rates +3.50% Fuel Surcharge Proposed USPS 2007 Rates

UPS Zones 2 3 4 5 6 7 8WeightLetter

1 6.05 6.15 6.28 6.46 6.70 6.78 6.892 6.10 6.35 6.80 6.88 7.25 7.38 7.703 6.14 6.56 7.05 7.21 7.61 7.80 8.344 6.25 6.73 7.34 7.57 7.94 8.15 8.765 6.55 6.81 7.60 7.83 8.22 8.48 9.176 6.62 7.02 7.69 8.01 8.42 8.75 9.427 6.89 7.17 7.83 8.23 8.66 9.00 9.768 7.09 7.35 7.99 8.37 8.89 9.35 10.309 7.25 7.50 8.11 8.54 9.07 9.75 10.84

10 7.43 7.55 8.27 8.73 9.37 10.31 11.45

*yellow highlighting indicates price advantage based on published rate cards

(Puerto Rico is 6 days TNT)

USPS Priority Mail Dimensional Weight– Dimensional weight calculations are the

same as UPS and FedEx

Dimensional weight applies to zones 5 through 8 Priority Mail packages

– Dimensional weight applies to packages greater than one cubic foot

– Example:

L x W x H

194

Dimensional Weight

=

Package Dimensions 18x12x12 (15 cubic feet)Dim Wt Scale Wt Price

USPS Priority Mail (Zone 5) 14 8 20.90$ UPS Ground (Zone 5) 8 8 6.43$

UPS price includes 3.5% fuel surcharge