|With FSS, things don't always go as planned.|
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:
|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?