THE USPS' FUTURE IS FLATS

The following is a perspective by postal commentator Gene Del Polito. The views expressed are solely the author's.

"A long, long time ago in a galaxy far, far away a postal system was trying to automate the processing of its letter-size mail." Sorry 'bout that. Wrong story. In fact, it wasn't a long, long time ago, and it wasn't even in a galaxy far, far away. It was in the late 1980s, and it all took place in a North American country situated right here on planet Earth. Still, it's a story worth recounting, even if only for the benefit of some of the newbies within the postal community.

Back in the 1980s, letter-size mail was the Postal Service's bread-and-butter. Most First-Class Mail was letter-size, and so also was a substantial portion of Third-Class (now called "Standard") Mail.

The U.S. Postal Service (USPS) was in the throes of a debate. Should letter-mail automation be based primarily on the use of optical character readers, or some method of processing and distribution? And, if OCRs were the way to go, should the recognition and sorting be done on single-line or multi-line OCR machines?

There was an element, though, that was missing from this debate. How would postal customers respond to any of the alternatives under consideration? It soon became clear that the Postal Service's letter-mail automation plans were going to be problematic for many of its advertising mail customers. The plans, as they then existed, called for mailers to apply a nine-digit ZIP+4 code to the last line of every address and to leave a blank white space in the bottom right-hand corner of the envelope to enable the USPS to apply a bar code.

Particularly in the case of advertising mail, the space on the front of an envelope (i.e., "real estate" as it often was called) was highly prized. As much of this space as possible was used for messages designed to enhance the likelihood that the piece would get opened and read. Also, the envelopes that many advertisers and marketers used had a print contrast ratio that wasn't compatible with the USPS' technology.

It's a fact that advertising mail is among the Postal Service's most price-sensitive products. If the only route to lower postal rates was going to be automation discounts, and if a substantial amount of advertising letter-mail was going to be deemed non-automatable, there was a real danger that postal price increases were going to lessen the value of mail as a business development medium. It was a prospect that neither the mailing industry nor the Postal Service particularly relished.

Fortunately, more thoughtful heads prevailed, and the Postal Service convened a meeting of postal and industry representatives, known as the Automation and Bar Code (ABC) workgroup, to discuss various automation-related issues. To make a long story short, it was from these deliberations that the Postal Service devised its current practice of address-block bar coding. This one development alone has been worth billions in automation-related savings to the Postal Service and billions in postal rate discounts to business mailers. It, was without doubt, one of the most successful public-private sector postal undertakings.

Through that experience, mailers learned just how key automation was going to be to the Postal Service's operational and fiscal future, and the Postal Service learned more about why businesses create the mail pieces they do. After 200 years, the Postal Service had finally gotten around to learning a bit about its customers' businesses, but, as the saying goes, it was better late than never.

Fortunately, the learning continued. From those original exchanges that the Postal Service came to know that advertising mailers used every tenth of an ounce in an automated mail package to foster even more transaction-related mail business. Over time, as the Postal Service improved its letter-mail automation equipment's capabilities, and the maximum weight of a Standard Mail automation-compatible letter rose from 2.5 to three ounces, from 3.0 to 3.3 ounces, and finally to the 3.5 ounce limit that exists today. Future improvements hold forth the promise of increasing that limit to as much as six-ounces--something that would add measurably to the value of mail as a business transactional medium.

The Postal Service's future, however, now hinges less on its letter-mail automation capabilities. Indeed, trends seem to indicate more that the Postal Service will increasingly lose that nice letter-size, First-Class, "white" mail to one of many electronic communication alternatives, and that larger than letter-size (flat) mail will become a more predominant proportion of the mail stream. In other words, the Postal Service's bread-and-butter will depend increasingly on its ability to cost-efficiently process and deliver larger than letter-size periodicals, catalogs, and distributed retail advertising.

Now, you might think that knowing this would mean the USPS is doing everything it can to replicate its previously successful customer-centered letter-mail automation experience. But you'd be wrong. In fact, if you read the Postal Service's flats automation plans, you'll see nothing that indicates it intends to move with dispatch to increase the weight or dimensional-handling capability of its machines. Indeed, it seems intent on freezing its flats processing capabilities to those that are no greater than the present FSM 100. If this is even close to being the case, the USPS should expect trouble.

Anyone who knows anything about why businesses design mail the way they do can tell you that businesses' needs don't always fall neatly into the dimensions of an FSM 100. Some very successful mail pieces come in weights that are close to a pound; some weigh barely more than an ounce; some fit nicely into a "digest-sized" category; others extend way beyond the dimensions of an over-sized business envelope. Anyone who truly knows what appeals to his audience can tell you exactly why his piece is designed the way it is. To expect such a piece to be radically redesigned simply to fit the limited mail handling capabilities of a flat-mail processing machine is sheer folly.

So, if the Postal Service's mail future lies with flats, and if flats come in all sizes and weights for good, solid business reasons, what's a rational postal manager to do? The answer is simple. Find out why mailers do what they do; find out what mailers intend to do in the future; and design your flats automation capabilities around the business you're likely to get--not the stuff some engineer or bureaucrat would prefer.

The Postal Service needs to go back to model it once set when it began facing its letter-mail automation challenge. It needs to go back to meeting with and talking with customers. It needs to get a better handle on what kind of mail is likely to be produced in the future. It needs to tell its machine designers to go back to the drawing boards and develop designs more in keeping with future real world needs rather than with some postal platonic ideal.

"FSM" should stand for "flat sorting machine" not "final standardized machine." If the future is flats, then the USPS has got to get going to make sure it has the ability to handle the business of the future. The public and private sectors have dealt with this kind of challenge before. There's no reason why it can't do so again.