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RR Donnelley DistributionOptimizer Reduces Postal Costs for Magazine Publishers

Press release from the issuing company

July 1 -- RR Donnelley & Sons Company's DistributionOptimizer(SM) service continues to provide significant postal savings for RR Donnelley's magazine publishing customers by leveraging RR Donnelley's scope and scale to simplify the distribution of periodicals and create postal efficiencies. Distribution costs are a significant expense for magazine publishers. DistributionOptimizer helps reduce costs by combining RR Donnelley's co-palletization operations with its dynamic entry and drop-shipping capabilities. Co-palletization combines magazines from different publishers on the same pallet, eliminating the need for mail sacks. Dynamic entry analyzes each mailing to identify the best strategy to optimize postal discounts, entry points and schedules. Drop-shipping delivers deeper postal penetration and reduces overall delivery times. The overall benefits to magazine publishers include improved delivery times, lower postage costs and more predictable total mail costs. RR Donnelley also continues to raise awareness of the possible consequences of future postal rate changes and to educate publishers about ways to mitigate the impact of rate hikes. The company recently hosted a customer education seminar in New York to discuss the benefits of the DistributionOptimizer service -- especially in light of rate increases that could be implemented in 2006. The Postal Rate Commission (PRC) and the United States Postal Service (USPS) are currently evaluating these potential rate increases. Louise Morrin, production director of Haymarket Media, attended the RR Donnelley seminar and discovered that her company could save as much as 18 percent on postage and eliminate 99.5 percent of their sacked mail by using the DistributionOptimizer service. "Before, our titles wouldn't qualify for a palletization discount due to our subscriber base and distribution pattern which meant we entered all of our mail in sacks locally," said Morrin. "Through this seminar, I learned that RR Donnelley can co-palletize our issues with other publishers' mail, virtually eliminating our sacked mail and allowing us to qualify for co-palletization and palletization discounts." The DistributionOptimizer service is available to customers that print at RR Donnelley's Pontiac, Ill., Mendota, Ill., and Senatobia, Miss., facilities, and is targeted to magazine publishers with circulation or mailings under 100,000. These publishers typically do not qualify for palletized mail savings, so the possible discounts from the service can result in significant postal savings for publishers. "RR Donnelley quickly analyzed my mail files to determine the potential savings from DistributionOptimizer," said Morrin. "RR Donnelley also evaluated the impact on Haymarket Media if the current proposal being considered by the PRC went into effect. It was calculated that our postage costs would increase 12 percent if the proposed rate were approved. DistributionOptimizer is going to help Haymarket Media avoid that increase." RR Donnelley has contributed significantly to the development of the niche rate case that allows the company to co-palletize bundled periodicals from different titles onto the same pallet. The goal is to help publishers earn the co-palletization and palletization discounts, eliminate the need for sacks and deliver their mail faster and in better condition. To date, no other printer has been able to deliver the same service to periodicals that are currently sacked.