**USPS Simplifies International Product Offerings

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The U.S. Postal Service Board of Governors approved plans yesterday to publish a proposed restructuring of international postal products in the Federal Register.

The new structure -- which is designed to simplify and clarify retail offerings and better align prices with speed of service -- eliminates many content distinctions and realigns products primarily by speed of delivery. Plans also call for an adjustment of all international rates, both retail and commercial.

"Traditionally, we have classified international mail by content -- with over a dozen ways to send a 4-pound package," said James P. Wade, international business vice president at the USPS. "Simplified product offerings will make it easier for everybody, our customers and our employees."

The proposed structure aligns products by speed: fast (airmail letters and parcels, and Global Priority Mail); faster (Express Mail); and fastest (Priority Mail Global Guaranteed). A fourth economy product line integrates various surface transportation categories. Rate adjustments also reflect changes in foreign delivery charges, or terminal dues, that were adopted by the Universal Postal Union and will go into effect Jan. 1, 2001.

"Changing the way we sell and simplifying our service alternatives [put] common sense back into our customer relationships -- both retail and commercial. This will ultimately stimulate revenue growth," Wade said.

The notice will appear in the Federal Register early next month. Following the 30-day Federal Register public comment period, postal officials will seek board approval of the simplified product structure with rate adjustments for implementation in January 2001, concurrent with the domestic rate case.

The USPS said international outbound postal products and services represent approximately $1.4 billion in postal revenue per year for the agency.

Also at the board meeting, postal officials announced additional enhancements to its flat mail processing equipment -- used for sorting catalogs, magazines, newspapers and other large flat mail -- that will increase productivity and reduce labor costs.

William J. Dowling, USPS vice president of engineering, said the postal service will add optical character readers and automated feeders to all of its model 1000 flat sorting machines, also known as FSM 1000s.

According to Dowling, these upgrades will increase productivity by at least 12 percent, increase throughput by at least 20 percent, and reduce staffing for this equipment by about 22 percent.

"With the optical character reader now playing a key role," Dowling said, "customers who provide newspapers, magazines and other large flat mail pieces will receive better service."

Currently, the USPS uses 350 FSM 1000s in major processing plants nationwide. Mail is fed manually into each FSM 1000 from four keying stations. At each station, an operator keys ZIP code information from each flat mail piece and places the flat into a slot on the machine. The machine then sorts the mail piece to one of 100 sortation bins, where an employee removes full containers of flat mail and places it on an automated conveyor belt running under the machine.

By upgrading the equipment with both an automated feeder and an OCR, labor savings will be substantial, as manual keying and induction is no longer necessary. Dowling said deployment of the upgrades is expected to start in July 2001 and will be completed by May 2002.

In other activity, the board approved funding to lease and purchase a site and design a 32,308-square-foot carrier annex for Santa Monica, CA. The USPS had been seeking a site for a new facility in Santa Monica for many years due to overcrowded conditions in delivery units.

The board also approved funding to expand the San Francisco airport mail center. According to the USPS, the expansion, which will include the installation of a new processing mechanization and modernization of the facility, will increase operational efficiency and accommodate larger airline mail transportation equipment.

San Francisco International is the fifth-largest airport in the nation. This expansion of the AMC, which was constructed in 1967, will enable the postal service to handle increases in domestic and international mail volume.

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