US Postal Service 2015 Annual Report Download - page 5

2015 Report on Form 10-K United States Postal Service 3
Although we operate as a single segment, we monitor revenue by mail classes and shapes. Our management uses the following
broad service categories to describe and report on our performance:
• First-Class Mail - Letters, postcards or any flat advertisement or merchandise destined for either domestic (up to 13
ounces) or international (up to 4 pounds) delivery. First-Class Mail letters include personal correspondence, bills or
statements of account and payments.
• Standard Mail - Any item, including advertisements and marketing packages, weighing less than 16 ounces that is
not required to be sent using First-Class Mail. Standard Mail is typically used for direct advertising to multiple
delivery addresses. Every Door Direct Mail enables customers to prepare direct mailings without names and addresses
for distribution to all business and residential customers on individual carrier routes.
• Shipping and Packages - This category includes: First-Class Package Service, a shipping option for high-volume
shippers of packages that weigh less than one pound and First-Class Mail parcels for shipment of boxes, thick
envelopes or tubes of 13 ounces or less; Package Services for merchandise or printed matter, such as library and
media mail weighing up to 70 pounds; Parcels - Parcel Select, Parcel Return Service and Standard Mail Parcel
Services which provide commercial customers with a means of package shipment; Priority Mail, which is offered
as a service both within the U.S. and abroad with the domestic service offering a 1-3 day specified (non-guaranteed)
delivery; and Priority Mail Express, which provides an overnight, money-back guaranteed service which includes
tracking, proof of delivery and basic insurance up to $100. Priority Mail Express delivery is offered to most U.S.
destinations for delivery 365 days a year.
• International - Offered for mail service and the shipping market with individual customer contracts and agreements
with other postal administrations. Priority Mail Express International and Priority Mail International services
compete in the e-commerce cross-border business. They provide an affordable option for our retail and business
customers for much of their shipping needs to over 180 countries. Global Express Guaranteed is the premier
international shipping option that offers reliable, date-certain delivery in 1 to 3 business days to major markets, with
a money-back guarantee.
• Periodicals - Offered for newspaper, magazine and newsletter distribution. This service requires prior authorization
by the Postal Service.
• Other services - This broad category includes: PO Box services, which provide customers an additional method for
mail delivery that is private and convenient. Money Orders offer customers a safe, convenient and economical method
for the remittance of payments. Money Orders are available for amounts up to $1,000, can be purchased and cashed
at most post offices, or can be deposited or negotiated at financial institutions. USPS Extra Services offer a variety
of service enhancements that provide security, proof of delivery or loss recovery. These services include: Certified
Mail, Registered Mail, Signature Confirmation, Adult Signature and insurance up to $5,000 and are available online,
at post offices or at automated postal centers.
We offer contract prices, rebates, online price reductions and other incentives to encourage customers to increase their volume,
which in turn increases our revenue. For a discussion of economic and other factors affecting the volume of these services
and our actions taken to address these factors, see Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations, Results of Operations, Operating Revenue and Volume.
RECLASSIFICATION OF CERTAIN SERVICES
Periodic reclassifications of services from Market-Dominant to Competitive, which require approval from the PRC, are
necessary to rationalize service offerings. The additional flexibility provided in Competitive services allows us to better offer
services that meet customer needs, to increase our business and to allow us to price our products and services competitively
within the markets in which we operate.
The PRC approved the transfer of Standard Post (formerly Parcel Post) and the transfer of First-Class Package International
Service from Market-Dominant to Competitive, effective January 27, 2013. In August 2014, additional PO Box services were
reclassified from Market-Dominant to Competitive. Information regarding PRC decisions and pending dockets can be obtained
on the PRC website: www.prc.gov.