Getting Smart About Intelligent Mail® Prepare Yourself for One of the Most Significant Postal Changes in Years

Intelligent Mail

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Getting Smart About Intelligent Mail® Prepare yourself for one of the most significant postal changes in years.

NOTICE: In the Federal Register dated January 7, 2008, the USPS issued an Advance Notice of Proposed Rulemaking that outlines requirements for the Intelligent Mail® barcode. Based on feedback to this proposal, the USPS will update and reissue this proposal. A DMM Advisory was issued on February 29, 2008 highlighting some of the changes.

This White Paper is based on information published to date, which is not final. As such, details are subject to change. For the most up-to-date information, visit www.pbpostalinfo.com. 3/6/08 Intelligent Mail

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“To capitalize on the value of information about mail, the Postal Service and its customers will place an information-rich code on all mail, aggregates of mail, and business forms, enabling end-to-end visibility into the mail stream.”

Intelligent Mail Corporate Plan Published by the United States Postal Service April, 2003

GETTING SMART ABOUT implementation of this mandate could have long-term INTELLIGENT MAIL® implications for your business. While it may seem complex, It’s been referred to as OneCodeTM, IMB and the 4-State there are ways to simplify the process, minimize your costs Barcode, but for most mailers, the Intelligent Mail® barcode and maximize the value you receive; and Pitney Bowes will has been a non-event… a sidebar story on postal guide you along the way. innovation that has flown under the radar for several years. As the first in a series of insightful articles and practical But that is about to change in a major way. resources that will help you generate better results for your company, this white paper provides an introduction to the: The Intelligent Mail initiative, which was announced in I Expected requirements of the USPS mandate 2003, became available in 2006, and was expanded upon and enhanced in 2007, is expected to become a required I Factors that make this barcode so different element for USPS automation discounts in May 2009. I Key considerations to focus on now I Benefits one can expect to receive As the first mandated barcode change since the Postal I Pitfalls to avoid Service invented POSTNETTM back in 1980, some companies may find themselves in uncharted territory. Not only will While the Intelligent Mail barcode is likely to be a USPS there be budget implications in 2008 and beyond, the mandate for automation mail, you do have several choices impact may be felt well outside the walls of your mail to make: whether you strive for the minimum requirements production environment, affecting legacy systems, critical or the maximum value; where in the process you will communications, business unit applications, document generate data and the barcode imprint; and, perhaps most creation, paper stocks, database management, marketing, importantly, how you will you leverage this new-found call centers and IT resources. intelligence for your business. When you get smart about Intelligent Mail, you put yourself and your company in There are many advantages to the proposed Intelligent Mail position to achieve more with your mailstream. barcode, but how you manage the near-term

3 INTELLIGENT MAIL® AT A GLANCE While certain specifics have not yet been finalized, the expected USPS mandate will likely address the following key points:

1. In May 2009, the USPS would no longer allow 7. The Intelligent Mail barcode would include the mailings utilizing the POSTNETTM barcode to same delivery point data contained in POSTNET, benefit from the greatest USPS automation plus four entirely new data fields. TM discounts. (POSTNET will be phased out entirely 8. You may be expected to populate these new fields, by May 2010.) which could entail multiple data sources. One 2. To earn all available discounts after this date, you such field is the Sequence Number, a six- or nine- may be required to utilize the new Intelligent digit identifier for each mail piece that must Mail® barcode. remain unique across your mailings for each 45- 3. Without this barcode, you could be paying up to an day period.* extra nine cents for every piece mailed. 9. The graphics, fonts, coding and print 4. The Intelligent Mail barcode, previously specifications for the Intelligent Mail barcode are referred to as the “OneCode”, will combine different from any existing barcode used today. the functionality of several barcodes into one 10. Migrating to the new Intelligent Mail barcode may multi-service code, replacing ACSTM, POSTNETTM entail creating the new barcode, plus eliminating and PLANET Code.® all existing postal barcodes.

5. The new requirement not only covers mail piece 11. In many companies, the current POSTNET barcodes, but also new codes for trays and barcode is created at different points in the containers such as pallets. Plus, the electronic process for different documents. submission of postage statements using Mail.dat®, 12. For some legacy applications, you may even Wizard Web Services or Postage Statement encounter a knowledge gap as to exactly how the Wizard.* current POSTNET barcode is deployed. 6. The new barcode offers more accurate and 13. Overall, the Intelligent Mail barcode was designed detailed information about mailings, plus with innovation in mind – meaning that it will be participation in USPS special services that allow used to enable additional USPS services, new you to track individual mail pieces, correct applications and future benefits. addresses and more.*

* The USPS has proposed two ways for mailers to implement the Intelligent Mail barcode: Full Service and Basic. The specific differences between these two options have not yet been fully documented, but the Basic Option will have fewer requirements (i.e. not required to: use Intelligent Mail barcodes on trays or containers, produce electronic statements, or assign unique mail piece identifiers) while providing access to fewer benefits and services such as ACSTM.

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THE USPS PERSPECTIVE: BETTER MAIL. the Postal Service, leveraging the same technology that will be used by the USPS to meet the service measurement The “Full Service” Intelligent Mail option promises to raise requirements set forth by the Postal Accountability and the level of service the USPS provides to its customers while Enhancement Act. Likewise, as each mail piece can now be allowing them to control costs in the face of new rate tracked back to a specific sender, the USPS will be able to increase limits, higher fuel costs and changing workforce accurately assess which mailers are sorting, traying and skills. While a major change such as this will require an effort preparing their mail according to USPS specifications. from mailers, this initiative will help the USPS deal with four key issues essential to the long-term success of mail. This last point is important: while the Postal Service promotes the fact that Intelligent Mail provides customers New value-added services with greater visibility into the mailstream – these barcodes The new barcode creates a platform for intelligence-based provide the USPS with better visibility into your mail services that add value to the mailstream, and makes it operations, too. easier to access OneCode ACSTM and OneCode ConfirmTM. For mailers who are vigilant about address quality and Improved deliverability proper postal presort techniques, this could be With streamlined address correction and piece-level advantageous. In today’s spot-check environment, it is tracking, it will help eliminate undeliverable and returned possible you could be assessed higher postage on an entire mail – and the associated costs. mailing (at a cost of tens of thousands of dollars) even if only a handful of pieces were in improper trays. Going More efficient operations forward, any extra fees would likely be based on the quality Intelligent Mail barcodes add speed, quality and accuracy to of the entire run, not just a few random pieces. the entire process of mail delivery. By some estimates, mail If, however, you are less than diligent about address quality, sent using the Intelligent Mail barcode can be several times move updates, proper sorting and mail tray preparation – less expensive to deliver than other automated mail. there may be significant repercussions. So when a letter Greater accountability addressed to Iowa ends up in a Florida mail tray and needs to loop back, the USPS will be able to track back the source Mailers will have increased visibility into the performance of of these additional costs to a specific mailer.

TODAY’S MAIL PIECE TOMORROW’S MAIL PIECE One code per mail type that Address Correction Service Codes points to a suite of services

6060 PRIMACY PKWY STE 201 6060 PRIMACY PKWY STE 201 MEMPHIS TN 38188-3333 MEMPHIS TN 38188-3333 ADDRESS SERVICE REQUESTED ADDRESS SERVICE REQUESTED #BWNGKVN #9999 9920 0104 276 • IRENE PAYNE 6449 AMBERVIEW CV IRENE PAYNE MEMPHIS TN 38141-8346 •6449 AMBERVIEW CV MEMPHIS TN 38141-8346 • PLANET Code POSTNET Code for Confirm Service for Sortation

5 THE BUSINESS PERSPECTIVE: OneCode ACSTM A ONE-TIME OPPORTUNITY. This electronic Address Change Service enables mailers to For years, businesses have understood the benefits offered receive updated address information whenever mail is by mail piece tracking in terms of cost-efficiencies, accurate forwarded or returned by the USPS. For businesses, not only forecasting, fraud prevention, improved cash flow and can you eliminate the costs of reprints and returned mail, customer satisfaction. Companies who are already using you can ensure your mission-critical communications reach these intelligence-based services can point to millions in their intended recipients faster. The Intelligent Mail barcode bottom-line savings. eliminates the need for the current keyline, which requires two lines of real estate. And you can’t beat the price – for Achieving these benefits, however, requires a change to First-Class Mail® OneCode ACSTM is free for the first two business-critical communications such as invoicing, notices of any name and address. statement process and check remittance. As you are well aware, companies do not want to change business-critical Other Intelligent Mail Benefits applications unless absolutely required; and now, that In addition, the Intelligent Mail barcode provides several requirement is upon us. other advantages:

Individuals responsible for mail production, therefore, I One standardized barcode gives you a cleaner, should be thinking about the long-term. Even if you have no consistent, more visually impactful address block immediate interest in using the Intelligent Mail barcode to I An easier-to-scan barcode improves the accuracy of improve address management, track mail or support new sorting equipment and reliability of delivery TransPromo applications – choosing to implement the I Enables participation in the new USPS Seamless Intelligent Mail barcode now with these capabilities in mind Acceptance program, which will eliminate the need to will make it easy for you to support these (and other) run mail through MERLIN® programs in the future with little effort. Fact is, it may not I Plus, you can continue to qualify for the lowest postal cost much more to do it right the first time. Current rates available benefits of today’s Intelligent Mail barcode include:

OneCode ConfirmTM THE OPERATIONAL PERSPECTIVE: Through this mail tracking service, you can measure service LET’S GET IT DONE. performance, predict delivery, document proof of mailing While rationales and benefits are all well and good, when and provide customer service departments with track and faced with a likely mandate, most operation managers want trace information on mailings. There are hundreds of to know “how can I ensure a seamless transition?” business applications for this service, with benefits This question is so important in fact, that experts from including cost reduction, cash flow improvement and Pitney Bowes have developed an in-depth article on this improved satisfaction. Unlike the current PLANET Code,® topic alone – plus an invitation for you to take advantage of with Intelligent Mail you will not need a second barcode, a customized Intelligent Mail readiness assessment. Put and the tracking will now follow a piece through the simply, there are four ways you can apply the barcode, and forwarding process. Pitney Bowes is the only company with expertise in each of

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these four disciplines, which provides for a thorough review When someone else Sorts the Document of the advantages, disadvantages and challenges, plus The quickest and easiest way to step up to the Intelligent insights into the many ways you can simplify the process. Mail mandate may be to let someone else deal with it, and Perhaps it will best suit your business to incorporate the when you utilize a third-party presort house you’ll also gain Intelligent Mail barcode… the benefits of commingled mail. Choosing a service provider will be important, however, because the USPS can When you Compose the Document monitor the quality of the sortation using your Mailer ID. It In recent years, more and more companies have been will also be important to coordinate sequence numbers with applying barcodes as part of document creation, with all your vendor so you can best leverage OneCode ACSTM and barcode information included in the initial data payload. OneCode ConfirmTM services. This trend has been driven by other initiatives, such as The truth is, there is no single solution or wonder TransPromo, where the goal is individualized, relevant application that will take care of all your Intelligent Mail statements. Creating barcodes at this point in the process needs. Many large companies may use some or all of these may require some added effort, but with the proximity to approaches based on their business needs and environment, your databases and business applications, you may find it and you may find it advantageous to manage Intelligent Mail easier to track back data (such as a corrected address) to its in different ways depending on the unique characteristics of original data source. an application. When you Produce the Document With today’s document output technologies, you can modify SPECIFICS AROUND THE NEW BARCODE and reengineer print streams – moving and adding information (such as barcodes) on the fly. Likewise, you The Intelligent Mail barcode is a height-modulated could print barcodes directly on the envelope using an barcode that encodes up to 31-digits of mailpiece data into 65 vertical bars. envelope finishing system. Either way, you may be able to centralize and standardize barcode creation on the production floor, at a point where you are still working with original data files—without impacting the upstream business applications. The code is made up of four distinct symbols, which is why this barcode was once referred to as the When you Sort the Document 4-State Customer Barcode. These are the tracker, When you run separate jobs and then want to combine them ascender, descender, and full bar (TADF). to achieve additional postal savings, you can physically sort your mail after it’s produced using sorter equipment. With X = Bar Width new or upgraded sorter technology, you should be able to accommodate the new Intelligent Mail barcode at the end of Ascender the mail production process. You can even program your A T Tracker system so that it assigns and tracks the unique mail piece F D identifiers. Descender

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THE INTELLIGENT MAIL READINESS In the meantime, you will have several decisions to make – ASSESSMENT. and how you manage the near-term implementation of this Since introduction of the Intelligent Mail barcode in 2006, expected mandate could have long-term implications for nearly 200 mailers have successfully begun integrating the your business. barcode within their operations. According to USPS At Pitney Bowes, we want you to make smart decisions – publications, mailers seeking the greatest automation decisions that simplify processes, ensure compliance, discounts must use intelligent barcodes in May 2009. The reduce postage and add value to your business. Postal Service is working with the mailing industry to finalize requirements for discounts while actively When you contact Pitney Bowes, you can expect first-rate encouraging customers to adopt the Intelligent Mail postal knowledge, unrivaled expertise and innovative barcode as soon as possible. ideas… the same mailstream leadership that’s behind the nation’s leading CASS-and MASS-CertifiedTM software, the most advanced document output technologies, the most THE NEW DATA PAYLOAD intelligent inserting and sorting systems and the largest presort service bureau in the world. In total, the new barcode is expected to carry a data payload of 31 digits comprised of the Given the scope of this expected mandate, and the number following elements: of departments, documents and workflows it could affect within your business, we encourage you to get started Field Name Length today. Depending on the size of your business and the Barcode Identifier 2 number of applications involved, you may want to begin with a one-on-one consultation or a full-scale readiness This field is reserved for future use. It will be a constant (“00”), except for flats where it represents assessment. Pitney Bowes even has the wherewithal to help optional endorsement line information. you staff an on-site Project Management Office to oversee and coordinate any internal or external projects related to Service Type Identifier 3 Intelligent Mail optimization. A value that corresponds to a particular mail class with a particular combination of service(s). For more information, speak with your Pitney Bowes For example, “040” is First Class Mail with representative, or call us today at 877-536-2736. Destination Confirm.

Mailer ID (Customer Identifier) 6 or 9* A number assigned by the USPS that identifies the specific mailer or subscriber. World Headquarters Sequence Number 9 or 6* 1 Elmcroft Road Stamford, CT 06926-0700 An ID specific to this mailpiece that must remain unique for each 45-day period. For more information about our products and services, please log onto our website: www.pb.com Delivery Point ZIP Code 0, 5, 9 or 11 Pitney Bowes and the Pitney Bowes Process Bar The same data used to generate the POSTNET are registered trademarks of Pitney Bowes. barcode today. All other trademarks are the property of their respective owners.