FSS AND DPP -- ONE YEAR LATER

Gene A. Del Polito, President
Association for Postal Commerce

Last year, one of the more controversial issues in the postal community was the direction the U.S. Postal Service ostensibly had been taking to develop a new environment to govern the processing and distribution of larger than letter-size mail – flats. Indeed, last year, PostCom spearheaded the assemblage of a number of groups that had expressed similar concerns over postal plans to reengineer the flats processing stream. To the Postal Service's credit, the USPS joined with those many organizations for a day of discussion on the future of flat-mail processing at the PostCom-sponsored Flats Summit.

There was much anguish at the summit. Attendees aired their fears and grievances while the mailing industry laid out the many facets of its concerns. Postal officials sought to hear, understand and act on the difficult messages mailers were trying to convey, while trying to allay those fears that had no foundation in fact.

Here we are a year later. Some misgivings remain despite the efforts of good people on both sides of the postal aisle to ensure better communication. The latest controversy concerned some allegedly market-based research conducted by the USPS. The research was interpreted by some within the Postal Service and industry circles as a sign that the flat mail processing and distribution environment was about to change, and quickly.

Last week, the USPS invited PostCom to discuss these and other issues with Pat Donahoe, USPS chief operating officer, and John Rapp, senior vice president of operations. Much of the information already has been presented to other audiences in other venues, most notably before the Mailers Technical Advisory Committee. What PostCom heard was nothing new. However, it bears repeating so rumor and needless concern do not negatively impact the relationship built by postal officials and mailers over the years.

The Postal Service operations chiefs made it clear that there still are many questions, issues and technical impediments to be dealt with before a definitive decision can be made about how flat-size mail will be processed by the USPS in the next decade. Indeed, the USPS is still early in the information-gathering stage that must precede the design and implementation of flats-processing equipment and technology.

For instance, John Rapp said the USPS has only just completed the first phase of a three-phase plan concerning the flats processing scheme known as “flats sequence sorting” or “FSS”. FSS would provide a flats processing scheme with something similar to what already exists with letter-size mail. That is, it would allow the USPS to use mail processing equipment (in this case, the FSM 100) to sort mail down to the finest possible level. The goal of FSS is to eliminate all but the most minimal human intervention in mail processing.

Phase one focused on concept design and simulation. Phase two, which includes building and testing an actual prototype, will not be completed before September 2005. Once the prototype is built, the Postal Service will be able to proceed to phase three – testing the FSS prototype at an operational mail facility. This phase is scheduled to run until March 2006. Only then will the USPS be in a position to offer the postal board a proposal to purchase and deploy FSS-modified FSM 100s to the field.

The USPS also is exploring “delivery point packaging” or “DPP.” DPP is designed to prepare all of a carrier's mail in a simple, easy-to-deliver package that would not require the fingering of mail currently associated with carrier street delivery.

The USPS is working on the first phase of DPP – concept design and simulation. By the time you read this, phase one should finished. However, there must be a decision as to these phase one designs and simulations warrant further work. If they do, the USPS will proceed to phase two – developing a “test bed” model, not an actual machine. Next would be phase three, developing an actual prototype that probably wouldn’t be built and tested before May 2007. If the prototype testing is successful, phase four – testing a prototype at an actual postal facility – would begin with a scheduled completion date of March 2008.

The work on DPP will take longer than the work on FSS because no piece of machinery currently is configured or can be modified for delivery point packaging. In addition, the Postal Service currently has no idea as to how a delivery point package would be configured. While some of the Postal Service's initial work has used plastic bags, the USPS is well aware that distributing millions of plastic bags each day would raise an environmental concern that could be politically impossible to overcome.

Why the fascination with either FSS or DPP? Postal officials say flats processing is costly, and they can save a lot of money if the flats distribution process can be completely automated. But that begs the question – can it? Currently, no one knows the answer. The Postal Service believes the savings are great enough to examine the options.

Will the USPS implement a full-blown FSS and/or DPP program? The current answer “no.” Right now, senior postal officials cannot tell you if the cost-benefit ratio of either FSS or DPP will justify the implementation of either or both. That's the reason for the multi-phased approach to concept development, feasibility testing, and field tests.

Is it possible the USPS could opt for either FSS or DPP at a future time? Yes, but it also could opt for either or both. And, if both, it could deploy either where a existed. Despite the possibilities, the Postal Service is still venturing in unknown territory.

What about the Postal Service tests to determine market receptiveness to FSS or DPP? Doesn’t it mean the USPS already has decided to proceed with both programs? Again, the answer is “no.” To date, the Postal Service’s research is rudimentary and preliminary. It is far from the type and quality of research that must be done for a comprehensive cost-benefit analysis. Postal officials know this, but it still is much too early to undertake the applicable research. After all, why spend money like a drunken sailor on market research when you have yet to determine the answers to engineering, operational, and cost-benefit perspectives?

To sum things up, much must be done before a decision to deploy FSS or DPP is made. Yes, there are issues that trouble some mailers. There are important issues that must be resolved. Yes, communication must continue between those exploring these options and those who will be affected by them.

But here's the prescription from PostCom's postal doctor. Eat right, exercise, stay informed, and get a good night's sleep. Trust me. Things are not yet at the stage where sleeping aids are necessary to get a good night's rest.
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CORRECTION ON ‛FSS AND DPP: ONE YEAR LATER"

According to the Postal Service's senior v.p. for operations, John Rapp, PostCom erred in reporting that flats sequence sorting would be built around the flat sorter model 100. During the interview, Rapp told PostCom that the FSS program would be built around "an existing machine" which we believed was the FSM 100. The "existing machine," in fact, is NOT the FSM 100 but will be a mail processing machine from outside the Postal Service. We stand corrected.