Saturday, November 29, 2008

Postal Service eyes mega-millions from FSS

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.


Anonymous said...

City carrier jobs declined by 10,000 this past year? Huh?

Anonymous said...

I bet that they did lose somewhere near 10K carrier jobs but also hired about as many TE's. I don't think they count them as carriers. The loss is in carrier jobs and in benefits paid,not sear positions, since TE's get none of the above.

Anonymous said...

The FSS is a big white elephant. It is already in the works to cut the number of these by one third nationally. Orlando was to have four by 2012. Maybe we will see two. Already the publications have gone from the mail service to internet only. PC Mag, Christian Science Monitor and US News and World Report. Others will soon follow. The cast of mailing along saves millions not to mention paper,ink and labor. FSS was based on future volumes and down they go.Almost $1 billion to launch this monster. When will they get a clue.

Anonymous said...

The Post Office is at it again.
Brain storming is dangerous in the wrong hands. The "Post Office" will spend $1 billion to save $10 million, in the short term. Postal math has to really be checked more than once.
The "Post Office" is paying VP's millions in salary to come up with these ideas. VP's have to put their ideas in force and worry about results, later. This is FSS system is an experiment in progress.

Randie said...

And how much do these monster machines cost ? They just trade labor for buying their buddies fancy, high -priced machines.How many years will it take to recover these costs ? How do the flats get sorted when the machines break, the power goes out, the maintenance man goes on vacation ? I can't wait !

Anonymous said...

One obvious point was overlooked.
Most carriers are covered by the no layoff clause. They may lose their routes but they are not eliminated from the payroll. Unless these 10,000 and projected 70,000 are not covered by the no layoff clause the dollar amount is based on erroneous math.

Anonymous said...

it's time for a wild-cat strike...they break the contract rules so we postal workers should shut them down, and put all the overpaid assholes at the top brainstorming to cut our jobs on the same unemployment line!!

Anonymous said...

I did not know the postal service was in it to make millions...oh, I forgot the million dollar bonus programs.

I thought America needed jobs. All you "bad" postal workers out there making 50,000 and BENEFITS.

How many of the big dogs travel to the inner cities, face dogbites, crime, weather, terrorism etc?

I hope you all volunteered for the bio program so you can deliver all the meds in case of a terrorist event.


Write a letter, make a phone call.

Letter carriers are as important to our national infrastructure as any other system fire, police etc.

Our communities depend on them for so much more than the mail.

Thousands of voices make a lot of noise.

Anonymous said...

I believe I read somewhere that Phase I of FSS cost one billion dollars for 100 machines.

How many operators are need per FSS?

Can the author follow up with some more details on ROI?

Anonymous said...

What Dead Tree does not take into account the general poor read rate these machines have. When they are tested with perfect mail. Non-readable mail will still have to be cased. I call it voodo math!!!!!!!!!

Dead Tree Edition said...

Page 64 of the Postal Service's recent 10K report ( has the stats about the reduction of "City Delivery Carriers." The number was 211,611 in FY2008 versus 222,132 in FY2007. The peak year was FY2005, with 228,278. Page 16 says that "City Delivery" work hours declined by more than 2% in FY2008.

Anonymous said...

I see alot of complaints and childish comments. No idea is perfect but something needs to be done. The dinosaur way of doing things is not going to keep this company in business. I saw comments regarding no layoffs. If there is no Postal Service the no layoff clause is null and void. The arrogant assumption that the Postal Service will always be here is a foolish one in this day and age. Mail delivery will always be needed, that's for sure, but the company delivering the mail may not be the Postal Service unless some drastic measures are taken right away.

Anonymous said...

I find this all basically nutty...I worked on FSMs for years, 881s, 1000s, and the 100s. IF the USPS says the machines will do FSS then they will (even if they don't). These machines have tons of rejects and I can only see the FSS creating more rejects with more clerk/carrier work required to sort them. I don't believe this is going to be fiscally responsible at all either. If its not broke, don't break it more.

G.I.Glo said...

I always thought UPS would 'take over' the USPS, but now it's looking more and more like it will be FedEx. Look at all of the 'intermingling' of business that is going on with FedEx; i.e., FedEx drop boxes in USPS lobbies, FedEx drop-shipping pallets of parcels at post offices, FedEx carries the mail on their planes (I know - I used to work part-time at FedEx while also carrying mail at the post office and I used to load it on the FedEx planes every night). And with FedEx taking over the USPS, that would break the unions - they are non-union. When they bought Flying Tigers (which was a union shop), those employees kept their union pay for 2 years - after that, it dropped down to FedEx pay, which was about a $6 per hour difference. FedEx employees make (at the time I was there in the late 80's, early 90's) about $1-$2 less per hour than I did at top-out pay. Just a thought, folks.