Tuesday, May 28, 2013

FSS Postage Pricing Will Affect Magazines, Catalogs, and Printers

The U.S. Postal Service’s growing confidence in the troubled Flats Sequencing System may lead to an overhaul of postal rates and significant changes at printing plants in January.

Postal officials have said recently that they plan to implement new postage rates for the Standard and Periodicals classes (and perhaps First-Class Mail) early next year that include “an FSS pricing structure.” Details have not been released, but discussions indicate the plan will include significant incentives for mailers to create FSS-optimized bundles for ZIP codes served by the giant machines while continuing to make traditional carrier-route and 5-digit bundles for non-FSS areas.

A Flats Sequencing System machine
The move would take aim at a major reason the $1 billion-plus FSS investment so far has increased USPS’s mail-handling costs more than it has reduced delivery expenses: The vast majority of flat mail is still prepared in the traditional manner, which creates extra preparation work at FSS facilities.

Most Standard and Periodicals class flat mail is currently placed in carrier-route bundles, with each bundle containing pieces destined for the same carrier route. A Periodicals carrier-route bundle may have as few as six magazines or newspapers and be only a fraction of an inch thick.

An FSS-optimized bundle, by contrast, is at least four inches thick and contains pieces from multiple carrier routes and often from multiple ZIP codes. That will mean far less handling prior to loading mail into the FSS, but also introduces a new risk: FSS machines have no “Plan B”.

Working traditional bundles on an FSS machine is somewhat inefficient but still works. The converse is not true, however. If the machines break down or are otherwise over capacity, there is no easy way to shift FSS-optimized bundles and pallets to traditional processing.

In recent meetings, such the Mailers Technical Advisory Committee (MTAC), postal officials have described the extensive work they have put in to making the FSS machines more reliable and predictable – such as studying and standardizing best operating practices, tweaking the equipment, and implementing more aggressive preventive maintenance.

Making larger bundles should increase bindery and co-mail efficiency for printers. But now they will also have to follow two very different sets of rules for bundling and containerizing flat mail – a new rule set for FSS ZIP codes and the current rules for non-FSS zones.

The FSS rules and pricing may end up being optional next year, but the incentives are likely to be high enough that commercial printers will not be competitive for producing catalogs, magazines, and circulars unless they can follow the FSS rules.

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Anonymous said...

I really liked the $1B+. It's more in the market of $15B, but that IS more than $1B+. I guess we have to accept this as a true statement.

Anonymous said...

"Dead Tree Edition," huh?

Kind of an insult to the thousands of people who make their livelihood from paper-based media.

Aren't you too intelligent for this kind of work, smarty pants?

D. Eadward Tree said...

To Anonymous (May 31): I'm one of those people who make a livelihood from paper-based media. I'm not ashamed of working on what the digirati call dead tree editions. And I've been known to refer to e-editions as Dead Dinosaur Editions (http://deadtreeedition.blogspot.com/2009/07/smackdown-printed-editions-vs-digital.html) because of the fossil fuels and petrochemicals they consume.

home networking services said...

I truly preferred the $1b+. It's all the more in the business of $15b, however that IS more than $1b+. I figure we need to acknowledge this as a correct articulation.