Declining mail volume, budget cuts, and equipment problems are forcing the U.S. Postal Service to rework its plans for the Flats Sequencing System.
The deployment schedule for Phase I of the system has been pushed back a couple of months, while the coverage area for the 100 machines has been expanded. Some of the 32 original Phase I facilities will get fewer of the enormous machines than originally planned as postal officials adjust to declining volume for catalogs, magazines, and other flat mail.
Those machines will go instead to about a dozen locations that will be added to Phase I, according to one source. And one of the original 32 locations -- the controversial proposed new building in Aliso Viejo, CA -- has been canceled along with other capital projects because of the Postal Service's dire financial condition.
(See "The Unofficial Guide to Flats Sequencing" for more information about the multimillion-dollar FSS program, which postal officials hope will revolutionize its delivery of flat mail.)
Postal officials revealed in February that they would be redeploying some of the machines and that some FSS facilities, contrary to original plans, would get only one machine. But the Postal Service's "FSS Deployment Information" Web site still shows the 100 machines going to only 32 facilities, including Aliso Viejo.
Plans for FSS developed during a time of growing flats volume. But the number of flats handled by the Postal Service declined more than 13% in the past two years, and postal officials now assume that the volume will continue shrinking. As a result, the first 100 machines are now slated to serve more than 2,000 ZIP codes instead of the 1,300 in the original Phase I plan.
FSS machines have been operating in Dulles, VA for a few months but failed an acceptance test recently because they were missing "throughput targets," William Galligan, USPS's senior vice president of operations, told a Mailers Technical Advisory Committee in February. Postal officials are working with the contractor, Northrop Grumman, to correct the problems and hope to resume testing later this month.
There is some good news on the FSS front: Dead Tree Edition's prediction four months ago that FSS would lead to money-saving consolidations of the Postal Service's dropship network is starting to come true. One dropship location on the list of predicted consolidations, in Kansas City, KS, has already been slated for closing, while the one in Winchester, VA is the subject of a consolidation study.
Galligan also told Postcom.org recently that FSS, along with changes to the dropship network, would correct much of the Periodicals class's problem with cost coverage. The Postal Service says its Periodicals revenue covers barely 85% of the cost of delivering newspapers and magazines, leading some to advocate higher rate increases for the class.