HAVANT, UNITED KINGDOM, November 26th, 2002 -- Lockheed Martin has been selected by Royal Mail to develop, operate and support an online postage (OLP) service for the United Kingdom. Online customers will be able to purchase and customize their postage via the Internet. The agreement is an amendment to the UK Address Interpretation (AI) programme for which Lockheed Martin is the prime contractor. AI automatically recognises the address of mail pieces and identifies a precise location to which mail should be sent. Under the terms of the contract amendment, Royal Mail and Lockheed Martin will share revenue gains the OLP service may generate through 2007.

The new OLP system also will be integrated with popular Microsoft® desktop applications, such as Microsoft Office®. When a subscriber orders postage online, an indicia - or the digital postage mark - is produced and applied by the user to the item being mailed.

These indicia, which have traditionally been a stamp, bar code, meter mark or prepaid postage symbol, will be replaced with one icon, containing predetermined information such as delivery and return address information as well as customer identification.

"In addition to being an efficient way to purchase and track postage expenses, OLP will permit sender and receiver delivery time and location preferences to be processed automatically," said Lockheed Martin Distribution Technologies President Judy F. Marks.

Initiated this month by Royal Mail, Lockheed Martin's OLP prototype development will begin immediately with channel trials expected by spring, and a nationwide rollout of the new service scheduled for the fall of 2003. Royal Mail's OLP channel initially will target home office users, small businesses and small-to-medium enterprise markets.

The OLP programme is an innovative component of Royal Mail's emerging strategy to produce highly efficient and customer-oriented products and services that can be accessed via the Internet. Royal Mail goals include making its postal services convenient and faster as well as easy for customers to access.

"The postal market of the future will reflect a strong focus on providing a mail service for the individual customer," Marks emphasized.

Lockheed Martin, working with German-owned software service provider GFT Technologies AG, will be responsible for providing Royal Mail with a Web-enabled postage-purchasing product based on an existing and successful OLP system currently available in Europe. Once deployed, Lockheed Martin will maintain and support Royal Mail's OLP service from its operations in Havant, England.

"An online postage indicia has the ability to carry both sender and recipient information, and it is this ability to carry more information, together with the ability of AI to read and process this data, that will form the enterprise information backbone required to give mail users control of their postal service needs in the future," Marks said.

According to Marks, Lockheed Martin specifically designed the United Kingdom's AI system to identify additional information from a mail piece such as OLP indicia. "It is this inherent ability to recognise and accurately sort new products flowing through the mainstream, combined with an ability to integrate and manage the information, which makes AI fundamental to the successful introduction of an OLP channel in the United Kingdom," said Marks.

Lockheed Martin was awarded the £131 million AI contract in 1999. The programme is managed from Lockheed Martin's Havant facility. The solution that Lockheed Martin created uses primarily off-the-shelf commercial offerings - some of which were developed for the U.S. Postal Service - that are integrated and enhanced to solve the specific needs of Royal Mail.

The AI system is capable of recognising characters, words and numbers regardless of whether they are typed, printed or handwritten. It has been specifically designed to cope with the very wide range of handwriting styles and address formats found in the United Kingdom. AI integrates Royal Mail's existing systems to improve the amount of mail sorted automatically.

Lockheed Martin Distribution Technologies designs, produces and integrates mail automation, material handling, recognition, and information processing systems for postal services, package delivery operations, corporate mail centres, and distribution, fulfilment and manufacturing centres worldwide. Distribution Technologies is a unit of Lockheed Martin Corporation, Bethesda, MD, USA.

Chris Trippick +44(0)23 9244 3739 (mob) +44 (0)7905 356 646email: chris.trippick@lmco.com