Classification reform means savings for customers

By Karen Spinner and Burton St. John III

Illustrations Dale Glasgow Associates

QUESTION: How does a 221-year-old organization change its product pricing, deemphasizing a century-old, content-based system for an approach based on automation? Answer: Slowly but surely.

Since July 1, 1996, customers and postal employees alike have been working together to understand the new rules and make them work. "We literally have to take some of the mailings, put them on the counter and walk the customer through the new system," says Dan Lessmiller, a bulk mail technician from Green Bay, WI. Cathy Oakley, a bulk mail clerk in Des Plaines, IL, similarly says, "We try to help the customers fix their mailings, prepare them properly and adjust to the new procedures."

So why is the Postal Service making its employees and customers go through classification reform? Simply, it's an ambitious attempt to encourage business mailers to prepare mail in a way that allows the Postal Service to make maximum use of automated equipment such as bar code readers. What used to be First-, second-, third- and fourth-class has now changed to these three classes: "First-Class," "periodicals" (formerly second-class) and "standard" (formerly third- and fourth-class). Behind the new names is a stronger effort to better price postal services based on how well the mailer prepares mail for automation. The theory behind this is simple. If mailers prepare mail to enter postal automation for immediate processing to its destination, the cost of handling those pieces goes down, so the Postal Service can pass the savings on to mailers.

The Lexington, KY, Automated Area Distribution Center, a medium-sized plant that accepts and sorts bulk business mail (now standard mail) from nearby companies and presort service bureaus, is a good example. Peggy Mann, mail acceptance specialist and certified classification reform trainer, stands in a sea of heavy, chrome-colored machinery and reflects on the changes.

"This," she says smiling with pride as she points to a long machine lined with slots, "is a multiline optical character reader (MLOCR). It reads address information on letter-sized mail and sprays delivery-point bar codes. The MLOCR can read most addresses except when mail is improperly addressed or addresses are handwritten."

But the MLOCR is a processing step that will be bypassed with classification reform, Mann explains. With larger volumes of customer prebarcoded mail properly prepared for automated bar code sorting, the Postal Service saves time and processing costs, and can better sequence the mail in delivery order for letter carriers.

Says Mann, "When that happens, we can reward customers for their efforts by passing on our savings." The rewards are most attractive for customers who barcode their mailings or use a presort service bureau to do it for them. For example, the rate for five-digit, barcoded First-Class letters has dropped from 25.8 cents to 23.8 cents. On the other hand, customers who do not automate will pay slightly higher rates. For instance, Presorted First-Class Mail without bar codes increased from 27.4 cents per piece to 29.5 cents.

Mann, who has worked since last April to prepare postal employees and customers for classification reform's changes, says it's perfectly understandable that some customers and employees are having difficulty adjusting. "This is a massive effort, unlike anything we've ever done before," she explains. "Yes, we've spent a lot of time educating our employees and our customers, but it's not easy to change the way we and our customers do business."

In fact, the Postal Service conducted more than 13,000 training sessions across the country to prepare large and small mailers for the changes.

Oakley, on the "front lines" in Des Plaines, says, "The big mailers and the mail houses are doing fairly well understanding the changes. But we're having to spend considerable time with small mailers who might mail three or four times a year."

Adds Lessmiller, "Many customers are increasing their barcoding to save money. We're definitely seeing more barcoded mail today, perhaps up to 60 percent more compared with July 1."

So, after six months, the consensus is mixed from customers and employees. Barry Marshall, a bulk mail technician at Lexington, KY, says, "Our larger customers and presort companies who already use bar codes are happy with it, but some of the smaller business mailers have had to make adjustments, and we've been helping them."

And there are more changes to come for both employees and customers. Mailers must continue to prepare mail in ways that are less labor-intensive for the Postal Service. Mann explains that employees will see more mail dropped at post offices in sleeved, banded trays that keep the mail in good condition for processing on automated equipment.

Clearly, these are sweeping changes that are taking some getting used to on both sides. Oakley says the Des Plaines unit is checking mailings thoroughly these days, and the work is paying off. "We understand this new process is time-consuming for both us and customers. But we want to help them do it right."

Despite a few post-implementation adjustments, Mann is optimistic that classification reform will, over the long haul, be a major success. She says, "Once we and mailers get used to the new system, it should make life easier for everyone."