Business Focus

1
USPS/FedExBUSINESS ALLIANCE OVERVIEW MAILERS
TECHNICAL ADVISORY COMMITTEE MEETING AUGUST 1,
2001
Network Operations Management
2
Overview of Current Transportation System

• At present, air cargo capacity for Express Mail,
  Priority Mail, and First-Class Mail products is
  purchased on a contract basis from multiple
  carriers
• The current supplier base is fragmented and does
  not meet service and cost objectives
• At present, ASYS on-time performance is poor and
  is expected to further deteriorate
• The use of multiple carriers makes it difficult
  to develop a centralized information technology
  capability

3
Air Transportation Requirements

• A more reliable and cost effective air
  transportation solution will be required to
  maintain market share
• The requirements of a service responsive air
  network are Expanded network reach Advanced IT
  capabilities
• Stabilized air transportation costConsistent
  performance
• Implementing one national air transportation
  network operated by an integrated carrier helps
  accomplish these goals

4
Highlights of the Agreement

• Agreement
• Seven years
• Projected savings over 1.3 Billion
• Guarantees 95 on-time performance
• Network scope (National reach)
• Night from 50 to 116 markets
• Day from 26 to 84 markets

5
Highlights of the Agreement

• Fleet size - Capacity
• 770 total aircraft
• 388 jets
• 288 wide-body jets

6
Highlights of the Agreement

• Minimum Guaranteed Volume
• Day-Turn -- 443,120 Cubic Feet
• Night-Turn -- 250,000 Pounds

7
Ramp Up Activities

• Limited ramp up began June 25
• Day-turn Network only (Priority and First Class
  Mail) - 11 cities - closed loop
• Expanded to 25 cities - closed loop - July 30
• Expand to 27 cities - closed loop - Aug 6
• Expand to 28 cities - closed loop - Aug 13
• Full ramp up - Aug 27

8
Ramp Up Activities

• Night-turn Network (Express Mail) - 11 cities -
  Jul 16
• 31 cities - July 23
• 91 cities - July 30
• Full ramp up - Aug 6

9
Future of Postal Logistics

• No HAZMAT or Live Animals (Air Industry Issue)
• No ACT Tags - Every handling unit must have a DR
  tag!
• Sack (MTE) Modification System-Wide
  (Priority/Express)
• Commercial Air Opportunities
• Expanded Surface Reach Via HASP/Hub Concept

10
Growing A Surface Network
11
Growing A Surface Network
12
Growing A Surface Network
13
Growing A Surface Network
14
Growing A Surface Network
15
Growing A Surface Network
16
Growing A Surface Network
17
Growing A Surface Network
550
18
Future HASP Sites
015NH
550
550
488
104BX
60H
070JH
100
190
170
680
150
460
207CH
450
230
640
630
233
240
400
270
275
370
377
280
373
296
380
290
301AH
390
350
310
710
750
360
320
365
700
328
335
331
ATLANTA HASP
19
Future HASP Sites
015NH
015NH
550
550
553
530
137BH
493
064
488
104BX
104BX
480
481
60H
60H
070JH
070JH
180
100
189
440
500
190
190
170
170
197
680
211
430
150
150
210 212
217
208
625
201
207
220
460
460
200
207CH
207CH
450
450
230
230
640
640
229
245
630
250
630
233
233
240
240
400
400
403
270
270
278
286
275
275
285
370
377
370
377
287
280
280
287
740
373
283
296
380
296
380
295
720
290
290
301
294
301AH
303
ATL
390
390
350
350
310
310
710
710
750
760
360
360
320
320
365
750
707
MCO
700
700
770
328
335
TPA
331
331
ATLANTA HASP
GREENSBORO HASP