Flats Sequencing Forecast: Cloudy With a Chance of Bravado

Despite equipment problems, schedule delays, and evidence of engineering miscues, postal officials are eagerly moving ahead with installation of the Flats Sequencing System.

The U.S. Postal Service’s recently released annual report says FSS “is revolutionizing the way we process flat-size mail, such as magazines and catalogs, by sorting it in the order in which it’s delivered by carriers. This new technology will deliver high-impact efficiency and improve mail processing, and make sure customers get even more value from the mail.”

Other recent USPS statements and presentations about FSS have been equally positive, generally ignoring such negatives as two failed acceptance tests and the reported replacement of the engineers who designed the system. The huge machines definitely seem to be reducing the Postal Service’s operating costs; the question is whether the savings will be great enough to justify the roughly $1 billion investment.

Below is a roundup of recent items about the Flats Sequencing System. Further information about FSS can be found at The Unofficial Guide to Flats Sequencing.

• Behind Original Schedule: Eleven machines are up and running in four locations, while another 16 are being installed in nine other facilities, according to postal officials. (See the recent presentation to MTAC for details.) A year ago, the schedule called for about one-third of the 100 Phase I machines to be running by now, but equipment problems and a need to rework the plan in light of volume decreases has put Phase I about six months behind that schedule. Phase I is now to be completed in 2011 rather than late 2010.
  
• Replaced Engineers?: Postalnewsblog.com included this in a summary of a late October meeting between postal officials and USPS management associations: "The current FSS deployment has been plagued by software issues. The USPS will continue its plans to install equipment but the actual deployment from a use standpoint must be resolved by the contractors. DPMG Donahoe advised that the USPS is working with the contractors to resolve the bugs in the system and that the contractor has replaced all of the engineers who have been working to correct the bugs." Financial statements of the contractor, Northrop Grumman, reveal nothing about the problems.
  
• Full Speed Ahead: USPS is moving forward with FSS installation despite the Office of Inspector General's recommendation that it install only one more machine "until the system demonstrates operational stability and sucessfully passes the field acceptance test." (See Can the Flats Sequencing System Be Fixed? for more details.) FSS improved in its second acceptance test but still failed; results of the third test have not been revealed.
  
• Good Results: "We exceed 98% quality on a daily basis," Deputy Postmaster General Pat Donahoe said in a recent video. USPS learned from the mistakes that were made on delivery-point sequencing of letters, enabling it to have a smooth start-up of machines, he said.
• No News Is Good News: As far as mailers are concerned, FSS has been a non-event so far. Most indications are that service has not suffered and that there have been no other major problems where FSS has been implemented.
  
• Volume Down: The volume of flat mail declined nearly 14% during the fiscal year that ended Sept. 30, with a smaller decline projected for the current fiscal year. The original FSS plan assumed stable or rising volume, but flats mail has declined about 35% in the past three years. As a result, the 100 Phase I machines are being deployed in 42 locations rather than the 32 in the original plan. (See Declining Volumes Lead to FSS Expansion for details.) A revised deployment schedule has been "under development" for several months.
  
• More Street Time: FSS is meeting its goal of giving letter carriers "less time in the office, more time on the street," Donahoe said in the video. Carriers who used to case (sort) seven to eight feet of flats are now casing one to two feet, he said.
• A Few Tweaks: "An ergonomic stowage and retrieval system has been designed for delivery vehicles receiving FSS flats with a limited deployment set for 2010. An FSS optimization effort is underway in Northern Virginia to streamline current operations and reduce manual processing of flats," according to USPS's recent 2009 Comprehensive Statement on Postal Operations.
• Site Deployment: "FSS deployment requires precise integration of facility expansions, operational moves, equipment migrations, equipment disposals, and site preparation activities including training and staffing. Site readiness in all 31 original Phase 1 locations is complete," the operations report says.
  
• Change of Location: Postal officials revealed two weeks ago that San Diego is replacing San Francisco as a Phase I location. There was no word on whether that meant Bay Area flats sorting would be consolidated into San Jose, which is slated for four Phase I machines.
• Delayed Rate and Regulation Changes?: Eventually, mailers will package flats for FSS areas differently (e.g. larger bundles, no carrier-route bundles) than non-FSS areas and will presumably have a different price structure for FSS. There was talk that the new packaging regulations and the accompanying rate changes would be implemented in 2010, but the Postal Service's promise not to change rates for most classes of mail next year probably means a 2011 implementation.