USPS Revises Flats Sequencing System Program

Due to declining volumes of catalogs and periodicals, the U.S. Postal Service is adding nearly 300 zip codes to the list of areas that will be served by the Flats Sequencing System.

FSS is supposed to revolutionize the labor-intensive process of sorting and delivering flat mail, cutting millions of work hours–and hundreds of millions of dollars–for the USPS.

But since flat volume was down 11% in fiscal year 2008–and has declined 12% so far this year–the Postal Service believes there might be insufficient volume for some of the huge machines. USPS now has 2,288 zip codes in the plan and it is redeploying some machines from the original Phase I sites to the new locations.

The 100 machines in Phase I of the FSS program will be placed in 42 locations–including new sites in Houston, Philadelphia, Charlotte, and the Twin Cities–rather than the 32 in the original plan, USPS revealed last week. The new plan will shift some flats-sorting work from postal facilities in Minneapolis; Queens, NY; Buffalo, NY; and Southeastern Pennsylvania.

All of the FSS machines were originally scheduled to be deployed by late next year, but the program is running a few months behind that plan. USPS is in the process of revising the schedule.

Adding more zip codes gets the USPS back to the originally anticipated flats volume needed to fill capacity and provide the ROI on the equipment, says Joe Schick, director of postal affairs for printer Quad/Graphics. “Overall, the 100 machines will still represent about 25%-30% of the total flats volume. That is in line with their original plan.”

USPS officials have said, according to Schick, that by adding more zip codes and locations for the first 100 machines, “should provide more flexibility in managing the volume fluctuations that will occur going forward, whether a continued decrease or the increase we would all like to see happen.”

For the USPS, FSS equipment is a nearly $1.5 billion investment to improve efficiencies and control costs by automating the sorting of flat mail. The Postal Service believes FSS will eventually enable it to sort flat mail in carrier walk sequence at speeds of 16,500 pieces per hour.

This means that carriers will no longer have to case flat mail; large envelopes, magazines and catalogs will arrive in walk sequence order in the same way that letter mail arrives to carriers today.

What does Schick think of FSS? “I’d like to think that it starts to lower the cost to process and deliver flats just as Delivery Point Sequencing (DPS) did for letters,” he explains. That will help to stabilize the prices for flats, which should help keep catalogers, publishers and direct marketers in the mail.

But with only 25%-30% of flats being impacted in the first few years, Schick notes, “we may not reap the full benefits quickly enough, but we have to start somewhere.”

On the bright side, Schick says, the printing/mailing industry has made huge strides in comailing and copalletization in the past few years. As a result, “that should help to provide lower cost flats in the zips not processed by FSS.”