The U.S. Postal Service is progressing on plans to phase out facilities that handle single products, such as bulk mail centers and international service centers, and create regional distribution centers focusing on shape-based processing.
A USPS official revealed more details yesterday about the agency's review and realignment of its mail processing and transportation networks, expected to occur in phases starting within a year.
The Evolutionary Network Development program aims to yield networks suited to current and future postal operational needs, reducing redundancy, making operations flexible and cutting costs.
Postmaster General John E. Potter first talked about the system at the 2004 National Postal Forum. It also is discussed in the USPS Transformation Plan. Numerous processing and transportation changes are to be proposed at the local level for approval by postal headquarters.
Paul Vogel, USPS vice president of network operations, said in a media teleconference yesterday that new mailing patterns demand these changes. For example, “single-piece First-Class mail is eroding. Over the past six or seven years, it's gone down almost 20 percent … and that's where our labor intensity is in our system network — collecting and sorting and canceling all of that type of mail.”
Other patterns affecting the network: swift population gains or losses in various areas of the country; more mail growth coming from volume that gets work-share discounts; and changes in automation technology.
“Our network is designed around product or mail class, and our technology is designed around shape,” Vogel said. “So now we have to bring those two concepts [together.]”
Similarly shaped mail items like packages may be processed on separate networks based on their class, such as Standard mail parcels in one location and Priority Mail packages in another. Transportation networks also are designed this way. This system creates redundancies, Vogel said, and it needs to be replaced by shape-based facilities.
“We also need to create a network that is less interdependent and more flexible in its ability to add and subtract facilities,” he said.
Thus, the USPS looks to replace facilities that handle specific products, such as bulk mail or international service centers, creating regional distribution centers from existing facilities. These centers, which will support local processing centers and contain shape-based automation, will be “the hub of the network,” Vogel said.
“There will be roughly 70 of these facilities around the United States,” he said. “These hub facilities will handle the material-handling activities and the packages, and this is where our truck hubs will be.”
The network also will include local processing centers, destination processing centers and destination delivery units. The USPS network currently consists of 675 processing facilities. The revamped network should consist of more than 400.
The USPS is testing the system through an area mail-processing program, under which the agency has consolidated plants. As of Feb. 16, the postal service approved 10 AMPs, and six are in place: in Bridgeport and Waterbury, CT; northwest Boston; Marysville, CA; Greensburg, PA; and Kinston, NC. The USPS also is conducting a 90-day study of the program in these areas. It has proposed 41 more AMPs, but no decisions have been made on the second group.
“These are just studies that have been initiated,” Vogel said.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters