Anita Pursley, Vice President of Postal Affairs for Quebecor World Logistics, presented at this year’s Industry/USPS Flats Summit on alternatives for the automation of flats. The Flats Summit was held July 15 and 16, 2003, in Washington, D.C. – offering mailers the opportunity to collaborate with the U.S. Postal Service on its proposed strategy for flat mail automation, currently in the research and design phase. The USPS developed its Corporate Flats Strategy for automating the processing of flat mail (i.e. catalogs, magazines and direct mail – 25% total USPS volume) in an effort to achieve savings at the Carrier Route level.

Pursley explained that the idea is to eliminate labor-intensive carrier sortation (reducing the $4 billion currently being spent on this processing) and to ultimately improve service and stabilize postal rates for flat mail. According to Pursley, the long-term Delivery Point Packaging strategy causes the industry some concern.

Pursley’s more immediate, alternative strategy focuses on the USPS creating more incentives to change mailing behavior. For example, she proposed the idea of cost-based rates and drop-ship incentives because they reduce mail processing and carrier costs.

Whereas the USPS currently receives a significant portion of catalog mail in sacks rather than more efficient five-digit-presorted pallets, Pursley asked, “What if the Postal Service were to receive all five-digit pallets? And what if those pieces were Carrier Route walk-sequenced co-mailed bundles entered at the DDU level? It could create a similar impact in cost savings without having to go the DPP route,” she said. In order to achieve this, the USPS would need to link the costs of service with the rates paid. It would then need to adjust mail preparation and mail flow to drive costs out of the system.

“Considering that 40% of mail processing costs are in bundle and container handling, the savings potential is huge,” Pursley said. “It would promote efficiency and worksharing, and is all about incentives.”

According to Pursley, the USPS is not investigating heavily enough in co-palletization. She explained that the USPS needs to provide more incentives to its vendors to encourage further investment in additional mail equipment and thus reduce costs for all flat mail. She emphasized the need to scrutinize costs and incentives at the carrier level as well.

The Flats Summit was only the beginning of discussions with the Postal Service on matters relating to the design, preparation, distribution and delivery of flat-size mail. The mailing industry expects to see talks escalate regarding cost efficiencies, cost savings, technological advancements, etc.

To view Anita Pursley’s “Alternate Flats Strategy Proposal” presentation at the 2003 Industry/USPS Flats Summit, click here.