Monday, April 18, 2016

Good Money After Bad? Mailers Try to Block FSS Expansion

An FSS machine: savior or white elephant?
Where the U.S. Postal Service sees an opportunity to expand the Flats Sequencing System to more ZIP codes, mailers see a backdoor rate increase.

Postal officials recently told mailing-industry representatives that declining volumes and some equipment upgrades are creating excess capacity for the FSS. At a meeting of the Mailers Technical Advisory Committee (MTAC), they proposed having the football-field-sized machines process the mail for additional ZIP codes.

See ya in court!
Irate mailers and printers responded by threatening to shift more business to alternate delivery -- private services that bypass the USPS. And they pointed out that the change would in essence be a rate increase for catalogs, publications, and other flat mail. In other words, a legal challenge is possible. (See FSS -- A Four Letter Word for some great insights and additional developments regarding FSS expansion.)

Publication printers are perturbed that they already have to absorb extra costs from handling and shipping FSS mail, without their customers getting any benefit. What’s especially galling is that, no thanks to postal officials, the printers’ expansion of co-mailing is the one recent investment that has brought about significant savings for both flats mailers and the USPS.

Mail that's been sorted by an FSS machine
The catalog and magazine industries are still smarting from a string of broken promises about FSS. They’re in no mood to support an alleged “efficiency” change that appears to be more about saving face than saving money.

Postal officials, including two previous postmaster generals, repeatedly promised mailers that FSS mail would cost no more than traditional carrier-route mail. That made sense: FSS was supposed to save the Postal Service lots of money by automating the labor-intensive process of sorting flat mail into walk sequence.

But it hasn’t worked out that way. On a recent (post-April 10) Standard Class postage statement I examined, FSS-sorted catalogs cost at least 7% more than the equivalent carrier-route pieces.

Today's vocab word: "obfuscatory"
The USPS has given coyly obfuscatory answers to recent questions about its FSS costs, telling the Postal Regulatory Commission a few weeks ago that it had not calculated the return on its $1.4 billion FSS investment. But clearly the system hasn’t worked as planned, and the high FSS postage rates bolster widespread suspicions that the system is still a money loser.

Why then, mailers ask, should the Postal Service throw good money after bad by shifting mail that is mostly in carrier-route bundles to FSS processing? It looks like a lose-lose for both mailers and the Postal Service, except for providing the face-saving illusion that the FSS is working.

Postal officials explain that the FSS would run more efficiently if it didn't have so much excess volume. They told MTAC that the labor-saving high-speed flats feeders they are installing will boost the machines’ throughput by 15% to 20%.

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Anonymous said...

A really bad system. Too many mistakes. I would bring back to P.O. flats for other routes. If I made this many mistakes everyday, I would of been fired!

Unforgiven said...

A very poor decision was made in not axing this program 10 years ago. Somebody has their personal pride or reputation at stake and finds it impossible to admit to a mistake. So now we have purchased 100 FSS and a system that never met standards required to purchase prior to purchase.

Anonymous said...

As a letter carrier for the USPS, I believe this system is a total waste of money. In my office, most of the carriers have to wait for the parcels to be distributed, and case the FSS in with their carrier sort mail. Also, if you have a set of full coverage, non-caseable mail,such as EDDM, the FSS has to be cased in, as well. No time savings at all!

Cyndi said...

Mail handlers fill those yellow trays with way to many flats!! The flats come up ripped and torn!! The trays are causing too many rotor cuff problems!! But Postal service doesn't care! We are pack mules to them!

Anonymous said...

Anonymous, You have more work to do casing your mail for your route, because the carrier routed mail is re-run on the AI. Which makes absolutely no sense. It's a numbers game.

Mail Handler said...

Cindi, Mail Handlers don't fill the street trays, It's called the FSS. The street trays are filled by the machine based on the routes. But you are absolutely correct, they really don't care.