After more than 20 years of service, the venerable POSTNet barcode on envelopes for automating and sorting mail retired on January 28. The Postal Service now requires that mailings have at least Basic-Service Intelligent Mail barcodes (IMb) to qualify for automation discounts. Mailers will need to switch to Full-Service IMb by January 2014 to receive maximum discounts at that time. Even though the Postal Service provided a lengthy lead time and a good deal of education on the discontinuance of the POSTNet barcode, the IMb requirement undoubtedly caught some smaller mailers by surprise. At the start of the New Year, less than half of commercial mail contained an IMb, suggesting a sizable number of mailers still needed to make the switch. While large commercial mailers were early adopters of IMb, many mid-sized and smaller mailers were hesitant to make the commitment and investment. Basic-Service IMb is not as big a step as the move to Full-Service IMb but it also yields fewer benefits. Full-Service Intelligent Mail will allow mailers to receive richer data about their mailings, but requires them to invest in hardware and software changes. The Postal Service wants to give mailers an incentive to make the conversion. It has proposed a one-time credit ranging from $2,000 to $5,000 to customers that make the conversion to Full-Service IMb. The credit would be based on the number of pieces the customer sends in a year. In an October Federal Register notice, the Postal Service laid out its proposal and further details are expected in a final rule. Is an incentive necessary to get mailers to invest in Full-Service IMb? If you are a mailer, do you plan to take advantage of the incentive?
on Feb 18th, 2013
in Pricing & Rates
| 6 comments
on Mar 29th, 2010
in Mail Processing & Transportation
| 15 comments
By Jim O’Brien
Back in 1990, Halstein Stralberg coined the term “automation refugees” to describe Postal Service mail processing employees who were assigned to manual operations when automation eliminated the work they had been doing. Since the Postal Service couldn’t lay off these employees, they had to be given something to do, and manual processing seemed to have an inexhaustible capacity to absorb employees by the simple expedient of reducing its productivity. The result was a sharp decline in mail processing productivity and a sharp increase in mail processing costs for Periodicals class. Periodicals class cost coverage has declined steadily since that time. Along with other efforts to get to the bottom of this issue, the Postal Service and Periodicals mailers formed a Joint Mail Processing Task Force in 1998. Halstein Stralberg and I were participants in this effort. We were puzzled by the fact that the flat sorting machines always seemed to be down during our seventeen Postal facility visits, in spite of the fact that they were supposed to run seventeen hours per day and that we visited facilities at all hours of the day and night. We were able to see the “bullpens” where mail processing employees manually tossed bundles of periodicals into rolling containers. Although the machines were down, the bullpens and other manual operations were always up and running. Fast forward to 2010. More Periodicals mail is manually processed than ever, and manual productivity continues to decline. Periodicals Class now only covers 75% of its costs. How can this dismal pattern of declining productivity and rising costs continue more than two decades after it was first identified, especially when the Postal Service has invested millions of dollars in flats automation equipment? How can the Postal Service continue to imply that Periodicals mailers are responsible for the cost coverage problem when mailers have substantially and consistently increased Periodicals worksharing? Yes, the recession did result in fewer advertising pages and lower revenue from Periodicals class mail, but the twenty-year-old elephant in the room continues to be the unanswered question of automation refugees and their impact on cost coverage. This issue would make an excellent subject for the OIG to investigate. The Postal Service should NOT be permitted to continue using Periodicals class mail processing as a dumping ground for its excess labor and the associated costs. What can be done to address the “automation refugees” issue? If Periodicals class mail is carrying a disproportional share of automation refugees, are there other areas where these employees can be used more effectively? Mr. O’Brien is the Vice President, Distribution & Postal Affairs for Time Incorporated. He is the Chairman of the Mailers Council, former Chairman of the Association for Postal Commerce (Postcom), former Chairman of the Magazine Publishers of America (MPA) Postal Committee, and a member of the MPA Government Affairs and Postal Committees. Mr. O’Brien has been involved with the printing, publishing, and distribution of magazines for more than 35 years. Prior to joining Time Incorporated in 1978, he held positions with R.R. Donnelley & Sons Company, United Parcel Service, and U.S. News & World Report. He is also the former CEO of Publishers Express, an alternative delivery that competed with the Postal Service in the delivery of magazines and catalogs. DISCLAIMER: The views expressed in this post are solely those of Mr. O’Brien and do not necessarily represent the views of the United States Postal Service or the Office of Inspector General. The U.S. Postal Service Office of Inspector General cannot guarantee the source, originality, accuracy, completeness, or reliability of any statement, data, finding, or opinion presented by this guest blogger.