Recommendation Recap

Through its deliberations, the Task Force concluded that a standardization initiative, sensitive to policy and market issues, could help substantially reduce the expense associated with redundant preparation and entry requirements which add no system value. If processors and mailers could reach consensus on the most effective and efficient way to prepare mail for entry into the channel, then the upside potential of the lowest combined cost network would be more fully achieved.

Task Force members, led by William Davis, CEO of R.R. Donnelley, developed a set of principles for standardization that included the value of differentiation in the mailbox, predictability in the value chain, emphasis on shaped-based processing, the future of postal operations as the gateway to the household, and alignment between processing and preparation and entry. Eventually, the Task Force integrated
its work on prep and entry with other Task Force efforts dedicated to postal network optimization, and recast prep and entry standardization as prep and entry optimization.

“The foundation for optimization initiatives has been laid,” commented Davis. “Now we must begin the process of prioritizing what is to be done, and turning it into reality.”

Preparation Initiatives. The Postal Service, with the Task Force's support, has developed several mail preparation initiatives in conjunction with the Mailers' Technical Advisory Committee (MTAC) and Product Redesign efforts. Implementation on several of these initiatives will begin early this fall. One initiative is a five-digit flats scheme about which mailers will be notified in October, and be able to participate soon thereafter. Another is a three-digit container of value program about which mailers will also be notified in October, and be able to participate soon thereafter, as well. A third initiative will establish a flexible
minimum for five-digit bundles of AFSM-100 compatible Standard Mail flats. A final effort is enhanced drop-shipping, which will officially go online this October. The enhanced drop-ship program, the Task Force concluded, would offer both mailers and the Postal Service better information on entry points than currently available, and would serve as a Web-based tool with which to facilitate shape-based entry.

Preparation Feasibility Pilots.ýThree pilot initiatives will be launched this fall, testing the feasibility of periodical reconsolidation and co-palletization, and a new container for flats prepared on pallets. Development of the reconsolidation process was to conclude this summer, with the pilot to start in the fall. The Postal Service will focus on collecting data on the costs of bundling and unbundling periodicals, and try to use rates to drive mailer behaviors. The feasibility pilot in Northern Illinois will take 3/5-digit mail from a number of participating printers and reconsolidate the volume in carrier route packages. This is expected to eliminate the processing at the originating plants, reduce Postal Service costs, and have mail entered directly
to an Associate Office for delivery. The Task Force intends to actively participate in the evaluation of the test, because a substantial portion of mail-processing costs are incurred prior to sorting. The co-palletization test — like reconsolidation — is designed to encourage additional worksharing. It’s aimed at smaller publishers who could palletize bundles of their titles with those of others. The Postal Service has decided to propose co-palletization as an experimental niche classification rate, and will present its case to the Postal Rate Commission this fall, with implementation planned for next spring. The experimental flats container being tested will carry from 20 to 60 pounds of mail, loaded at a printer’s bindery line, placed on a pallet, and transported directly to a processing plant. A prototype is currently being tested at the Postal Service’s plant in Fort Myers, Florida.

Preparation Modeling. Two modeling initiatives are also planned. One is to determine the optimum bundle size for Standard flats. That effort gets underway in September with new options for flat bundles, and is part of a Postal Service effort to replicate its letter automation success story with flats — reducing both customer preparation and USPS processing costs. The second modeling program is longer term. It will develop a preparation-based cost model aligned with the network optimization modeling that began last spring. The preparation cost modeling will start this fall, and the data should be evaluated and recommendations made by next spring.

Node-Based Presort. The Task Force examined an alternative approach to presort schemes, presented by Task Force member Jim O’Brien of Time, Inc. This approach, based upon the concept that the parent container should drive the packaging, would align with grid pricing and cost-based presort, and would offer efficiencies and cost savings. The Task Force concluded that node-based presort fits well with present concepts about optimization and should be included with ongoing efforts.

Mail Entry Acceptance. PostalOne!, the web-based scaleable technology platform that the Postal Service will use to support an enhanced payment system, will also streamline the labor-intensive, paper-driven entry process. By moving mail entry transactions into an electronic environment, PostalOne! will facilitate standardization, efficiency and consistency.

• Monitor the outcomes of the feasibility tests for reconsolidation and co-palletization, to help the Postal Service determine how to best move forward with both initiatives.

• Participate in the modeling of both bundling optimization and preparation-based costing, by providing data and feedback.

• Support the Postal Service’s implementation of enhanced drop-shipping, five-digit flats scheme, and three-digit container of value, and advise on how to improve all three.

• Continue to develop new preparation and entry approaches.

• Determine the cost benefits of prep and entry initiatives for the entire mailing industry.