The first phase of the Flats Sequencing System (FSS) will save the U.S. Postal Service hundreds of millions of dollars annually and result in thousands of job eliminations, a recent Postal Service presentation indicates.
Based on the presentation, Dead Tree Edition estimates the Postal Service is targeting delivery savings of more than 5 cents for every catalog, magazine, newspaper, and other flat handled by FSS. Most of the savings would come from eliminating roughly 6,000 letter-carrier and other employee positions as all 100 Phase I FSS machines go into operation during the next two years. By automating the sequencing of flats rather than having letter carriers do it by hand, FSS is supposed to enable a letter carrier to handle more deliveries.
Still under wraps is how the machines will affect costs and employment levels at processing and distribution centers, where flats are sorted for the delivery units. But postal officials have said that FSS will result in consolidation of some P&DCs.
In just the two ZIP codes served by the Reston Annex in Virginia, the move to FSS resulted in nine employee positions being eliminated, seven delivery vehicles being reallocated to other locations, and 960 square feet of space becoming available. Those results are typical of what to expect from FSS, Jordan Small, USPS's Vice President, Delivery Operations, told the Mailers Technical Advisory Commitee (MTAC) recently. (A summary of the FSS-related changes at the Reston Annex is on the last slide of Small's "FY 2009 Cost Containment Strategies" presentation.)
Reston Annex, serving ZIP codes 20191 and 20194, is one of seven "sort schemes" being handled by USPS's first fully operational FSS machine in Dulles, Virginia. If the Reston Annex results are indeed typical, its results would be replicated about 700 times (7 sort schemes multiplied by 100 machines) in Phase I of FSS.
With letter carriers typically making about $50,000 in annual salary, not to mention benefits, Dead Tree Edition conservatively estimates USPS's Reston Annex savings as $600,000 annually. Replicated 700 times, that would be $420 million. Each FSS machine is to operate six days per week with a capacity of 280,500 flats per day, suggesting that Phase I will eventually sequence about 8 billion flats annually.
The Postal Service may never reveal exactly how many positions it eliminates as a result of FSS because it is undertaking other strategies to reduce the number of letter carriers as well. The number of city delivery carriers declined by more than 10,000 (almost 5%) in the fiscal year that ended on Sept. 30, and the Postal Service is targeting another 9,200 positions in the current fiscal year.
FSS is best suited to areas with high densities of residential and commercial deliveries where the Postal Service has buildings large enough to house the enormous FSS machines. It's not clear how many additional phases FSS will have, especially in light of declining volumes of flat mail. Just a few days ago, in fact, the Postal Service revealed that it is reconsidering the idea of sequencing letters and flat mail together, an approach that was abandoned as too costly a few years ago.