USPS: No Standardization Planned for Flats
Mailers are concerned the USPS will set size limits on flats as part of its automation effort and charge higher rates for mailers that fall outside the standard. Postal executives said they are developing new flats processing equipment with the goal of creating technology that can automatically process all sizes of mail.
"We're not trying to standardize and force all flats into a standard size and shape," John Rapp, USPS senior vice president of operations, said at the meeting between industry and postal service representatives at the Capital Hilton Hotel. "We realize the value of differentiation in that size of mail."
Bob Kalok, senior vice president of direct response marketing at America Online Inc., said his company grew its business largely through the use of flats mailers, typically with classic AOL free-installation disc mailers. Standard 6-by-9-inch mailers and #10 envelopes don't work for AOL, he said.
"If flats were standardized, it wouldn't be a distribution channel we could utilize to the extent we do today," he said. "It would limit growth opportunities for my company."
USPS flats strategy should not treat all flats equally, as if "a flat is a flat is a flat," said Joyce McGarvy, distribution director for Crain Communications. Panel members said any flats automation plan should leave room for innovation in direct mail.
Companies that use saturation mail, mass retail mail advertising, would be particularly sensitive to flats mail cost increases, said Donna Hanbery, executive director of the Saturation Mailers Coalition and the Alliance of Independent Store Owners and Professionals. Most are small businesses on limited budgets that adapt to mail cost increases by reducing volume or frequency.
Newspaper inserts and private carriers offer distribution alternatives to saturation mailers, Hanbery said. However, most would rather avoid those choices.
"They'd just as soon work with the postal service if the postal service can keep the price right," she said.
The USPS will seek the mail industry's input on implementation of the flats strategy, postal executives said.
"We want to make sure this is not just an engineering effort," said Nick Barranca, USPS vice president of product development. "We don't want to optimize to the point that you don't have the value in flats that you have now."
Still, postal executives stressed that the future lies in automation. Automation would eliminate hand sorting and sequencing of flats by carriers, reducing the time carriers spend in the office and increasing the number of deliveries they can make.
The USPS is pursuing two lines of research in flats automation. One, the flats sequencing system, would sort flats only, separately from letter mail. The postal service estimates that this system could let carriers make up to 650 deliveries daily, up from its current average of 500.
Delivery point processing, the second line of technology, would sort letters and flats together into bundles and eliminate manual sorting and sequencing by carriers. This system would raise maximum daily deliveries by carriers to as many as 800, the USPS estimates.
The USPS could deploy the flats sequencing system by 2006 and delivery point processing by 2007. The postal service is "pretty sure" flats sequencing will work, but delivery point processing, which is earlier in the research stage, would be more efficient and result in better pricing, Rapp said.