Preparing to Be Squeezed

There continues to be a lot of “belt-tightening” lately. At homes. businesses. and soon the United States  Postal Service will also begin tightening its belt in a new area -compressing its process­ing network. Beginning in as early as March 2012, the USPS will begin a significant  and, what  is surely to  be tangibly  felt, reduc­tion in processing facilities. The list of processing facilities that are being considered  is posted  on the  USPS website  and contains over 250 facilities across the country. That is more than half the current network  today.

The reason  for this  compression is twofold. First, the  current delivery   network  was  built  to  process   overnight   delivery   of First-Class  Mail.  Standard  Mail  is now  the  largest  mail  class by volume,  with  First-Class  Mail  declining  24%  over  the  past four years. The second reason is delivery  cost. According  to the USPS at a recent  MTAC (Mailers Technical Advisory Committee) meeting, it costs the USPS $10 million  per day to support  a pro­cessing  network that was designed  for a different  time and dif­ferent  mail  use  than  today. By  compressing the  network, the USPS hopes  to further  reduce  it’s operation spending  to match the reduced volume and revenue.

Compressing the delivery network effectively in half is no easy task. The USPS needs buy-in from numerous stakeholders, not the least of which is it’s unions and their customers. This network compression means significant changes to service performance and the USPS has already notified both the Postal Regulatory Commission, it’s  unions, and the mailing industry (via MTAC) of the proposed compression. However, there is still another important stakeholder that needs to be considered in this. and that is the software development community.

With  $10 million  at stake per day, the  USPS has already stated they are anxious to get moving as quickly as possible to compress the network. During the August MTAC meetings. it was even sug­gested that the entire network  compression  be done by December 2012. Other recent  discussions  with  USPS operations  seem to imply a phased approach over the next two years. Regardless of the final date, everyone at MTAC appeared aligned to the idea that an initiative of this magnitude needs to be done collaboratively.

Mail preparation by PAVE (Presort Accuracy Validation and Evaluation) certified software, as outlined in the Domestic Mail Manual, is entirely dependent  upon and tied to current  Labeling Lists. These Labeling Lists provide the active.originating ZIP Code to destination processing facilities for labeling end preparation purposes. For example. L005 is the Labeling List that outlines the 5-digit scheme sortation  for pallets and sacks of Periodicals. Standard Mail and Package Services flats and irregular parcels destined  for multiple 5-digit ZIP Codes served by a single delivery unit.

In all, there are 18 Labeling Lists that are used by PAVE-certified soft­ware for proper mail preparation and induction. Any change to the processing facility network means a change to these Labeling Lists. And with over 200 facilities being considered for compression, that could mean significant software and underlying Labeling List changes in order to reflect a dynamic shift in mail preparation and induction rules.

Earlier this year, the USPS and the Mailing Software Development Group (a working  group  within IDEAIIiance) initially  agreed to a 2012 release schedule for Labeling Lists and other critical postal preparation tables. This  release  schedule is publicly  available on https://postalpro.usps.com. In the schedule. it was agreed that Labeling Lists would be released six times  per year. However, if the USPS intends  to move forward with the processing  network compression, that  release schedule  itself  may need  to also be compressed and thus software vendors and their users could be squeezed into a state of rapid-fire software updates.

The MSDG members are continuing to work with the USPS in seeking an implementation plan that can take into consideration minimally disruptive software changes in conjunction with a sufficient window  of time to implement Labeling List changes. Recognizing that a mailing is presorted in data days or weeks before the actual induction of a physical product, it is important  to have a sufficient transition  window  established  between where  mail  is  inducted today and where it will be inducted later in 2012 and beyond.

Meanwhile, software users need to  stay informed  about  these facility  changes. Users  should work  with  their current  software provider to understand the planned release schedules and check with  their local acceptance office to see what changes are being considered for local entry of mail.

This article was originally published in the November/December 2011 edition of Mailing Systems Technology.