The USPS Pitches Two Flats Automation Plans

Ever since it established an efficient automation program for letters in the late 1980s, the U.S. Postal Service has been under pressure to bring its outdated flats automation program up to speed. A better automated system would, at least theoretically, enable catalog mailers to receive better postage discounts, because they’d be more completely compensated for the worksharing they’d do.

In May, the USPS laid out two options to could cut costs and reduce rates for the delivery of flats. But mailers and industry groups say that neither plan to automate flats is a panacea.

The first option, Delivery Point Packaging (DPP), uses automation to sort both letters and flats into delivery order and then bundle the mail into one package for each delivery stop. This one-pass system — in other words, the mail has to be run through the machines only once — would be quicker than the current process, which requires several pass-throughs.

“DPP would automate manual carrier sorting and eliminate the fingering time,” said John Rapp, the Postal Service’s senior vice president, operations, in a session during the July 16 Industry/USPS Flats Summit in Washington, sponsored by the Association of Postal Commerce and several other mailer groups. Although the technology for DPP is not available yet, Rapp said that the USPS expects to have a DPP machine simulation available within the next two years.

Rapp couldn’t estimate how much DPP would reduce costs, but he noted that revised rates would “recognize the worksharing” between mailers and the USPS. If successful in its development, the Postal Service would hope to deploy DPP in 2007.

The agency could, however, deploy its second option — the Flats Sequencing System (FSS) — a year earlier. The FSS is designed to sequence flat mail using the typical two passes through the machinery currently required for letters.

As with DPP, the rate structure would change to recognize worksharing among mailers. On the other hand, FSS would not decrease postal clerk office time as much as DPP would because more manual labor would be needed to handle the machines; thus rates presumably wouldn’t be as attractive to mailers, and the savings would be less significant to the USPS.

If DPP doesn’t work, “we’d like to have something developed in FSS and cut at least some of the costs and handling in flats,” USPS executive vice president/chief operating officer Patrick Donahoe said at the Industry/USPS Flats Summit. “These two aren’t being looked at in separate silos; we’re evaluating a number of these processes.”

Will size matter?

While the USPS plans aim to improve postal efficiency, some mailers are concerned automation could necessitate size standardization. In other words, they fear that a move to further automate flats could mean a push to standardize book sizes, which could hamper creativity.

For instance, L.L. Bean’s core catalogs are an unusual trim size, measuring 6″ × 9″, said Steve Fuller, vice president of corporate marketing for the Freeport, ME-based apparel, outdoor gear and home goods mailer. In his presentation at the Flats Summit, Fuller noted that “our concern is that we make our books stand out, because they represent our brand.”

But the USPS’s Rapp insisted that the agency is not “trying to standardize and force all flats to be a standard size and shape. We realize the value of differentiation in mail and are not trying to design a machine that would only handle one size.” Rapp said that no matter which direction the USPS takes with regard to automating flats, it would not force mailers to make their mailpieces conform in size.

Both DPP and FSS are still in the research and design stage, but plans for the two automation ideas have been circulated to mailers for their feedback. DPP research and design will continue through next year, according to USPS vice president, engineering Tom Day.

If the Postal Service decides to go forward with DPP, it would run in-plant evaluations and competitive tests in 2005 and 2006. By 2007, if all goes well, it would award a contract and deploy the equipment.

As for FSS, Day said that research and design for the system will run through this year; in-plant tests, evaluations, and a competitive test will take place by 2005. If FSS proves to be the flats automation winner, the USPS hopes to award a contract and begin deployment in 2006.

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