As you may have heard, the Postal Service is revamping its Bulk Mail Center (BMC) network into a three-tier Network Distribution Center (NDC) system. The process began in the Northeast earlier this year, and has now moved on to the West Coast; look for the transition to be completed by the end of this year.

This transition will ultimately allow the USPS to consolidate the processing of originating mail into fewer sites to increase efficiency, reduce transportation costs and expand the surface transportation reach for more products. The new network will include the following tiers:

• Tier 1: 11 facilities will process and distribute local and destination Standard Mail, periodicals and package services.
• Tier 2: 6 facilities will perform all Tier 1 activities, plus distribution of outgoing Standard Mail, periodicals and package services into the network.
• Tier 3: 4 facilities will perform all Tier 1 and Tier 2 functions while also serving as consolidation points for less-than-load (LTL) volumes from Tier 2 sites.

(This page can shed more light on the NDC transition.)

Why It’s Happening: With the decline in mail volumes, the sheer quantities of mail previously processed at the 21 national BMCs has been significantly diminished. Even prior to the recent economic downturn, mailers were drop-shipping mail directly to delivery units and bypassing BMCs altogether. Network Distribution Centers were created to consolidate the facilities to match workload demands, increase transportation efficiency, and reduce costs.

What It Means For You: Mailers will have to make different separations than they did for the old BMC network, with different labeling. Mail previously destined for processing in the BMCs will have to be palletized and separated between the local NDC service area and outgoing destinations.

There is much confusion regarding separations and the final method that will be used to drive them. At this point the USPS is “requesting” that customers make these separations. In some cases we are seeing the USPS use Customer Supplier Agreements (CSAs) to work with mailers to begin the separations, but prior to agreeing to this, you may want to check out this BCC Blog post on CSAs.

BCC is actively involved with USPS efforts regarding NDCs and how any “required” separations will be implemented. Bob Schimek, Vice President of Software Engineering, is part of a new MTAC Workgroup tasked with Communicating Network Distribution Center (NDC) Origin Separation Requirements. It’s expected to finish its work in February 2010.