Mailers, USPS discuss future of flats

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WASHINGTON - While mailers understand the long-term benefits of the U.S. Postal Service's flat sequencing systems, they are concerned about some short-term issues.

Mailers and the USPS offered their comments about the FSS at the Mailers' Technical Advisory Committee USPS Flats Symposium, which took place here at L'Enfant Plaza Hotel. The summit was held in preparation of the major changes that will come for mailers and mail service providers as a result of the FSS.

"Our approach to flats is going to be very similar to what we do with letters, only it's going to be a lot better," said Pat Donahoe, deputy postmaster general and chief operating officer of the USPS.

The flats sequencing system program is designed to boost postal efficiencies in the processing, distribution and delivery of letter mail that will soon be applied to the sorting of flats mail such as large envelopes, magazines, catalogs and circulars. It will allow the sequencing of larger mail pieces in delivery point order in an effort to reduce the time carriers need to prepare mail for delivery before leaving on their routes.

The U.S. Postal Service is on track to go live with the first phase of its flats sequencing system in September 2008. By this date, 100 systems, plus two prototype machines, will be live in 32 processing and distribution facilities throughout the USPS. Each facility will house between two and five systems. The facilities were chosen based on flats volume.

A prototype FSS was installed in April at the Indianapolis Mail Processing Annex. A full-size pre-production machine will be installed at the Dulles, VA, mail processing facility in April, and operations will begin there in September.

As this test proceeds, the USPS will study and measure the system's effect on downstream transportation, logistics, work methods and other long-lead-time activities required to support deployment in 2008.

A key concern mailers have is the costs and complexity involved with preparing some mail for the FSS and other mail the way it is done now. Only 28 million flats in 1,500 zones will pass through the machines during the first phase, which is scheduled to commence in October 2010. Eventually, the USPS hopes to have all flats go through these systems.

Another concern is that mailers must change the location of their customers' addresses on flats mail. Customer address labels may have to move from the bottom right or left corner of a mail piece to the top center in a verticalized fashion, which would make it easier for carriers to finger the mail and load it into mailboxes. The address also should also be right side up.

This would be a change for mailings and subscription renewal forms sent out by Time Inc. Customer Service, according to Barry Elliott, director of postal affairs and postal services at the company, who spoke at a panel here. He also had some concerns about it.

"Do you just change the address or do you change everything on the mail piece?" Mr. Elliot asked. "Our customers are very interested in response rates and these issues may affect response rates."

During a question-and-answer period, James R. O'Brien, vice president of distribution and postal affairs at Time Warner's periodicals subsidiary, Time Inc., asked Marc McCrery, manager of operational requirements and integration at USPS, who was also a panelist here, what would happen if some addresses were upside down for some of the pieces.

While letter carriers would have to read them upside down, Mr. O'Brien said, "maybe letter carriers can get good at this skill if they practice a little bit."

Mr. McCrery said that ideally "we need to work with customers … and we'll try to come up with a good business solution."

Mr. McCrery also suggested that the agency post a Federal Register notice regarding new rules this summer, so that mailers would have time to comment on them and a full year to implement them before September of 2008 when FSS begins.

Responding to a question about declining Standard flats volume, Jody Berenblatt, senior vice president of postal strategy at Bank of America, who was also a panelist at the symposium here, said there will be many mailers looking at ways to see how they can redesign their flats to stuff into 6-by-9-inch envelopes.

"But there are a lot of cases where businesses need to use an envelope that is flat-sized and businesses will have to figure out if they can afford to do what they have to do," she said. "If not, they are going to have to figure out other ways to communicate with their customers.

"So I am very concerned," she said.

Her company has suggested to the USPS for several years "that it would be best to redesign the machine as opposed to the mail pieces. … Several years later, we are now looking at redesigning mail to match the machines.

Mr. Donahoe outlined the goals of the FSS. He said they are to drive down costs through automation, improve processing performance and service, enable future growth, provide end-to-end visibility and create the lowest combined cost system.

"[FSS] gives us the ability to continue to create the lowest combined cost system," he said. "It allows us to work together to reduce costs, improve the service, grow the product and everybody [will be] successful going forward."

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