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Distribution of Stamps

MTACMay 19, 2010

Myrna Murphy

Agenda

Distribution of Stamps

Stock Level Management

Internal Stamp Distribution Network Consolidation

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Stock Levels

Fewer stamps being sold

– Reduced 1st class mail volume

– Increased PVI & Meter use because of airmail security rules

– Alternate access reduces window transactions

Need to reduce cost

– Cost to count, ship & store excessive stock

– Increased exposure to loss

Managing Inventory is a common business practice

Policy was published in PB 22148 February 17 2005

USPS improved the controls on stock levels due to:

Stock Levels

Formula

– Limits to 3 months sales in stamp stock on hand

– Allows extra for the holiday period (Q1)

– Based on SPLY

– Formula generally allows for normal sales volume

Example

– Q1 (Oct-Dec) 2009 Stamp Sales = $20K, Max Stamp Accountability Q1 2010 = $20K on any day in Q1

– Q2-4 (Jan-Sep)2009 Stamp Sales = $45K (avg quarterly sales = $15K), Max Stamp Accountability Q2-4 2010 = $15K on any day in period

The maximum stock level for a postal retail unit is determined by a formula.

Stamp Fulfillment Network Consolidation

Gain workforce reduction & efficiency improvements

– Implement better fulfillment processes

– Decrease labor requirements through economies of scale

– Leverage technology and equipment investments

Improve inventory management

– Decrease safety stock

– Reduce stamp destruction costs

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USPS is consolidating the stamp fulfillment network in order to:

Dec 2009 Kansas City, MO Jan 2010 Dulles, VA Mar 2010 Atlanta, GA

Note: Alaska, Hawaii, and Puerto Rico SDO’s are not impacted

Apr 2010 Binghamton, NY May 2010 Phoenix, AZ Jun 2010 Portland, OR

Consolidated Sites

Stamp Fulfillment Network

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Stock Limits allows for inventory of all currently available stamps

Scheduled stamp orders fulfilled on monthly basis

Stamp Distribution Centers ship:

– Special Orders received by 3 pm shipped same day via Priority Mail

– Express Mail or expedited transportation, if necessary

Mailing Community Impact

Neither stock limits nor the consolidation should have any impact for routine stamp purchases.

Special orders may require a longer lead time.

Questions ?

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