Wednesday, January 11, 2017

The FSS: A Hopeless Case

With FSS, things don't always go as planned.
Buried in two recent U.S. Postal Service reports are data and statements persuading me that the USPS's Flats Sequencing System will never end up saving money, much less recoup its $1.3-billion investment.

I explain why in an article that Publishing Executive published today, which also points out that the combination of the FSS fiasco and a Trump presidency could be yugely expensive for Periodicals publishers. To provide more depth to that discussion, here are the relevant excerpts from the two reports.

The first is the brief "FSS Scorecard" section of the agency's Annual Compliance Report. It reveals that the already slow and erratic FSS machines ran even slower and worse last year -- despite various "tiger teams," machine tweaks, and changes to mailing rules that were also focused on making FSS work:

FSS Scorecard
Chart from USPS FY2016 Annual Compliance Review

The Postal Service continues to measure critical aspects of FSS performance at each processing location. The resulting scorecard is utilized to develop a list of specific sites with the greatest opportunity for improvement. The table reflects the Postal Service’s performance on the key metrics utilized by the scorecard.

The DPS percentage metric represents the percentage of all flats destinating in FSS zones that was sorted to DPS using FSS for city carrier delivery. Flats volume outside of the FSS DPS percentage is either processed on the automated flat sorting machine (AFSM) or in manual operations.

The Mail Pieces At-Risk percentage identifies the percentage of mail that does not follow the prescribed path of sortation through a machine-based operation (e.g., on the FSS). These pieces, while not representative of service failures, require some additional handling in order to ensure they meet service expectations. At-Risk metrics enable the Postal Service to identify operational processes and machine elements that need to be reviewed for possible improvement. The metrics are broken down into three groups – Maintenance, Operator, and Shared (both Maintenance and Operator) – based on the ability of that group to affect the metric being tracked. Data supporting these metrics are gathered from machine End-of-Run (EOR) statistics. The Postal Service uses raw event indicators from the machine, such as the number of jams, and extrapolates the potential number of pieces that have fallen outside normal processing. Proper maintenance and adherence to operational guidelines minimizes the pieces at risk, hence decreasing the indicator.

Below are two excerpts from the "FSS Pricing and Passthrough" section of a USPS report on Periodicals pricing that include a couple of interesting revelations: 

1) After eight-plus years, postal officials are still trying to figure out how to make the "infant" FSS process work. In other words, not only is the system not working, the USPS doesn’t have a plan yet for getting it to work. 

2) The original idea was that FSS copies would cost the USPS no more than carrier-route copies, but now the vision is for the savings on non-carrier-route copies to make up for the “slightly” higher costs of carrier-route copies. With carrier-route copies now constituting more than 70% of non-FSS flat mail (and likely to rise because of better incentives in the rates that will take effect later this month), it’s difficult to see how a system with such long-term underperformance will ever make that work:

The Postal Service’s experience with the FSS is in its relative infancy, and the Postal Service is still learning about which operational flows will minimize the cost of FSS processing. Currently, the presumed efficient preparation for FSS sites is governed more by mailing rules than by pricing incentives. ... 

The premise of the FSS program is that increased mail processing costs (possibly substantial increases for pieces that previously qualified for Carrier Route rates) would be offset by reductions in delivery costs. The net reduction is intended to be systemic, meaning that while overall costs are reduced, some individual components may decrease substantially (mail previously prepared as 5-Digit, 3-Digit, ADC and MADC), while some individual components may increase slightly (Carrier Route). The dilemma is that there is not a practical way to set rates to reflect the fact that, in FSS zones, there is no cost distinction between mail previously paying Carrier Route rates and mail previously paying 5-Digit rates. This dilemma is further complicated by the fact that mailers previously paying predominantly Carrier Route rates do not want higher prices for their Carrier Route pieces.

I’m told that postal officials won’t even discuss the possibility of scrapping the FSS or radically repurposing the machines. (Could the machines be used to sort inefficient mail pieces into carrier-route bundles? Could machines located near major printing plants be turned into giant co-mail machines?)

One issue is that casing units (which carriers use to sort flats into delivery sequence) have been removed from so many delivery units served by the FSS. In other words, before waiting to see whether the FSS would work as planned, postal officials “burned the ships.” Now they’re saying, “Shit, we have no way to get out of this God-forsaken place. Who knew?”

The floor space once devoted to casing units often gets turned over to the growing parcel business. And the wave of recently hired carriers doesn’t have the experience or route knowledge to case efficiently. (With the FSS failing to sort nearly half of the flat mail assigned to it, by the way, there’s still plenty of casing going on. But it’s increasingly being done by inexperienced people using inadequate space.)

So I can understand the reluctance to ditch the FSS. But why are postal officials wanting to throw good money after bad by subjecting yet more areas of the country to FSS processing?

Related articles:


Anonymous said...

FSS was a failure from it's inception because the increased costs resulting from transforming carrier delivery vehicles into mobile sorting stations was never factored into the FSS equation.

Prior to FSS and to a lesser extent DPS, a carriers day was 4 and 4. 4 hours in the office casing and 4 hours on the street delivering. The mandate that accompanied FSS is 2 and 6, 2 in the office casing and 6 hours on the street delivering.

Labor costs being equal, associated vehicle costs have increased. A 50% increase in motorized street time has resulted in at least a 50% increase in reoccurring vehicle costs, gas, tires, brakes, maintenance, etc. You get the picture.

Watch your mail carrier roll up to a mailbox and idle the vehicle for minutes on end as he/she shuffles through the various trays of DPS, FSS, letter mail, flat mail, circulars and parcels. This sorting was previously done in the office, not on the street with the motor running.

These additional vehicle costs are related directly to DPS and FSS but are never acknowledged by the USPS. A disclosure of vehicle costs pre-DPS/FSS and post-DPS/FSS would be most revealing but it would take an act of Congress to bring it to light of day.

Rex Bernard said...

Should have just stuck with the older technology. Is the FSS appreciably better than the AFSM 100s to warrant costs? Declining flat mail volumes coupled with the sheer amount of incompatible mail point to "No."

dryMAILman said...

We already had (have) walk-sequenced flats.
Is anyone out there interested in my flats strategy? I'd like a new job.

Anonymous said...

The main problem with FSS is that it greatly increases a carrier's time to deliver the mail once out of the office and onto the street, because of the following reasons:

1) Instead of the mail being sorted in a logical manner regarding size and address orientation , FSS in run haphazardly, with half of the flats run upside-down, smaller flats behind larger ones, etc.

2) Instead of a carrier handling undeliverable mail (forwards, vacation holds, etc) once in the morning, this mail now needs to be handled twice, one time in the vehicle and again upon return to the office.

3) The area in the front of the vehicle where a carrier would formerly line up their parcels for each segment of the route is now taken up by the FSS tray, meaning that for most parcels, the carrier now has to exit the vehicle, walk to the rear of the truck and open the back door to retrieve each package.

4) On my route, I used to fill up the gas tank twice per week. Now it needs to be filled 3 times per week. Aside from the additional fuel costs, driving to the gas station and filling up takes time.

5) Carriers and supervisors can no longer manage bulk mail delivery in response to fluctuations in mail volume and manpower, for instance the day after a holiday or in response to sick calls. With FSS this is not possible, meaning that on one day, a carrier may need 10 1/2 hours to complete their duties, while only needing 7 hours the following day. Gone are the days of leveling out the workload over the course of a week, which means the Post Office is paying overtime that was formerly avoidable.

This list is nowhere near comprehensive, but these are some of the major factors as to why FSS is nowhere near the money saver that Postal Management claims it to be.

Donkey said...

I would love to see an outside audit on the cost effectiveness of this machine. From my (somewhat outdated) plant perspective the maintenance footprint and man hours involved in keeping this thing running is absolutely HUGE. The current set up involves different people prepping the mail and people running the machine as opposed to the previous system of one operator individual loading the machine. Management simplistically focuses on boxes of mail prepped per hour however shows ZERO oversight of the quality of the mail being prepped. You can prep half a box or just fill it up haphazardly which will almost certainly jam the machine when the box is loaded into the feeder.

I think Mr. Tree is correct the FSS is hopeless although postal management doesn't particularly care and no one in charge of this boondoggle is ever held accountable.

Anonymous said...

In my facility, management already knows that it's a lost cause. They don't even have a supervisor watching the machine. It may look in their (management) roster that there is a supervisor assigned there but they are no where to be found. Most of the time the workers are just standing around while the machine is idling. Here is the scenario: when they "induct" the mail the time starts for that "zone". When the mail handler is out of mail to induct, the supervisor, has to "end induction" on the computer. Guess what, they are nowhere to be found. Operators can be standing around doing nothing for hours. So a zone which would normally take 1.5 hours to run can take 3.

Anonymous said...

The FSS in our office is rarely over 30%. Doesn't matter because it gets cased anyway. Most offices do case it.