Postal Automation Delivers
Here’s how the Postal Service automates itsprocesses to improve service and reduce costs. Long-term goal: continuous flowof the mailstream.
By Bernie Knill, contributing editor
First in a series
Most of us just see the tip of the postal iceberg. In ourview, the letter carrier who fills our mailbox is the Postal Service.
Meanwhile, back in the big, businesslike building that isdiscreetly marked Processing & Distribution Center, you’ll find therest of the postal iceberg: the automation machinery that processes, handlesand delivers the mail to the letter carriers.
To the Postal Service, automation means not only costreduction and labor savings, but also basic survival by keeping ahead of themountains of mail — 668 million pieces — that have to be handledevery day. Since 1971 the volume of mail has grown 139 percent, but the numberof postal workers required to move that mail has grown just 23 percent.
Postal automation is more a process of continuousimprovement than an overnight happening. Because of the huge volumes involved,what would seem to you and me to be an incremental change in equipmenttranslates into big savings for USPS. For example, in the works is equipment toexpand the ability of optical character readers to automatically sort a widerrange of letter sizes. This improvement translates into the movement of ahalf-billion more pieces of letter mail from manual processing to automatedoperations. That’s a reduction from $55 per thousand letters to about $5per thousand.
The long-range goal of postal automation is continuous flowof the mailstream. That’s the goal of Thomas G. (Tom) Day, the USPS vicepresident of engineering. Although the Postal Service is never going to be ableto adopt pure continuous flow, Day believes that the closer it gets, the betteroff it will be.
“We’re trying to get out of batch processing; tothe extent we need to buffer, do it at the final point — to buffer at themachine, where the mail is being processed,” Day says. And do it withrelatively low-cost technology, such as gravity feed or simple conveyor rightat the machine. “Depending on the size of the program, it would mean anumber of feet of iron, spiral or straight conveyor, right at the machine. Thenwhen you need to withdraw, you have it at the machine.”
The new engineering chief is a third-generation postalemployee. His appointment followed the recent retirement of engineering vicepresident William J. (Bill) Dowling (MHM,January 2001).
Day has degrees in engineering and management, andoperational experience in several postal regions, most recently as districtmanager, Southeast New England District.
“The most fundamental thing you can ever do to improveyour material handling is to get away from batching and go to continuous flow,so you don’t have the handling at all,” he says. He points toequipment being developed for direct-connect from one processing machine toanother, thus eliminating a tray handling operation. The Direct Connect Systemat the Fort Myers Processing & Distribution Center is an example ofcontinuous flow.
As the speed of processing machines increases, so does thechallenge of continuous flow. An example is the Postal Service’s newestflat mail sorter, the AFSM 100, that is capable of sorting at 18,000piece-per-hour throughput. (A flat is any kind of advertising mail, catalog,magazine, leaflet — think of something you get in the mail that’snot a letter and it’s probably a flat.) “What we’ve learnedis that you have to put a very efficient operation on the front end of thesorter because if you don’t prepare a sufficient quantity of mail andkeep that flow going, you’re not going to get the efficient use of themachine,” Day says. “As the AFSM operators will tell you, themachine literally sucks the mail through. You load a ledge of mail in and nextthing it’s done.
“It’s this constant flow to the machine thatbecomes a challenge, and as you start filling bins you have to take the mailaway. So it’s that intake and outtake material handling that reallydrives the effectiveness of the machine.”
Watching the operators load the AFSM, Day pointed out thatthe jam rates are exceptionally low — typically fewer than five jams anhour. “The better-run operations are two to three jams an hour,” hesays.
Economic justification at USPS
No matter how interesting the concept, no piece of equipmentgets developed in the Postal Service without going through an economicjustification procedure. “The Board of Governors has a hurdle rate— they want a minimum of 20 percent return on investment,” saysDay. “We usually have no problem. Occasionally we get programs that gowell beyond that, where the technology is so good that the savings potentialcan be realized in short order.”
More often than not, says Day, the limiting factor inwhether the Postal Service will develop a piece of equipment is not theworthiness of the concept but the price. Can the technology be produced at aprice that can be economically justified? The decision isn’t made onsoundness of the research and development but more on the productionengineering. “It’s the vendor who is producing the equipment: Dothey have good production engineers who know how to drive cost out of theproduct so that their price gives us a good economic return? That’s thebiggest challenge any vendor faces,” Day says.
“When we look at economic justification, itencompasses a full range of cash outlays, not only the initial cost of theequipment,” Day points out. Some other factors are:
• Preparation of the site where the equipment will be installed;
• Disruption costs such as shutting down a part of the building;
• Training of the equipment operators and the maintenance personnel;
• A fulllogistical support system for parts and systems over the entire life cycle ofthe equipment.
In the past few years the Postal Service has been installingrobots of various types and evaluating their effectiveness. Bill Dowlingbelieves that too many robotic installations are massive in nature or havetricky travel paths. “I look at them and say, ‘I just want to movea tray from here to here, a simple task.’ But the robotics engineers lovesophisticated paths and precision. In material handling, nothing’s whereit’s supposed to be. So when we use a robot we need vision systems andsimple paths. I think that the robotics industry is now adopting processes ofthis kind.”
The Postal Service uses both pedestal-mounted andgantry-mounted robots. “At the Fort Myers Processing & DistributionCenter, the gantry robots work with the smaller containers, which we call thegeneral purpose containers; at a large-scale operation like a Bulk Mail Center,we’re building the trays to a higher density in the containers with apedestal robot,” Day says.
When inspecting a number of robotic installations, Day foundthat high-speed robots demand an induction system with buffering capability.“At one BMC with a handling system using four independent robots thatshared a common feed system, they had to keep mail handlers there feeding traysinto the system. So the limiting factor became not what the pedestal robotscould do, but keeping an adequate flow of trays in the feed system,” Daysays. “The robot doesn’t take a break. You have to have severalhundred feet of trays to keep the system fed.”
Any robotic applications in the works? “The next thingwe’re working on is robotic unloading of the containers, the reverse ofloading, to use it in induction,” is the answer.
The use of automatic guided vehicles is still in its infancyat USPS. The lift trucks and tuggers at the Fort Myers P&DC are beingtested, but not to full capacity.
“Guided vehicles have the capacity to give us savings,and are certainly cheaper than a dedicated driver; but you have to understandthe flows of mail as you build containers, so that the AGV takes it to theright place. You have to be able to duplicate what a human does when he or shemakes an on-the-spot inspection and decision,” Day says. Changes inmailflow are difficult for a controls system to mirror. Most effective would be“applications where we have high-volume, point-to-point transportation;where we get into more complex, multi-stop multi-products being moved, it getsquestionable what you can do with an AGV.” MHM
A number of types of automation equipment used in the PostalService are mentioned in this series. These represent only a fraction of thetotal automation in USPS. Suppliers of standard material handling equipmentbeing used in postal applications are too numerous to mention.
Automated Flat Sorting Machine (AFSM 100): Siemens Dematic(formerly Rapistan) and Northrop Grumman.
Automatic Guided Vehicle System (AGVS) guidance: AGVProducts.
Automatic Guided Vehicle System (AGVS) vehicles: Hyster.
CCD cameras in SSIU: Accu-Sort.
Carton Optical Character Recognition: Lockheed Martin.
Delivery Point Sequence (DPS): Siemens Dematic.
Direct Connect System (DCS): Elsag.
Non-Machinable Outsize (NMO) sorter: Siemens Dematic.
Remote Computer Read (RCR): Lockheed Martin.
Robotic Container Sort (RCS): ABB Flexible Automation Inc.
Robots: ABB Flexible Automation Inc.
Singulate, Scan and Induction Unit (SSIU): Lockheed Martin.
Tray Management System: Accu-Sort, Lockheed Martin, SiemensDematic.
Universal Transport System (UTS): Accu-Sort with SiemensDematic cross-belt sorter.
Testing on the Fly
The Fort Myers Processing & Distribution Center(P&DC) is a big facility on the Jetport Loop near the Southwest FloridaInternational Airport. Big as it is, the P&DC blends into the businesscommunity to the extent that some neighbors don’t know that it exists.
In the Postal Service scheme of things, Fort Myers would belabeled a medium-size facility. But aside from performing its processing anddistribution activities, the facility also serves as a research center forprocessing and material handling. However, the research doesn’t getperformed in some kind of laboratory environment. The Florida facility isexpected to move real mail on schedule and at the same time test new processesand equipment.
“We don’t get any forgiveness for latemail,” says Norbert J. DeMars, plant manager.
DeMars started with the Postal Service in 1978 and“held every position in the facility” — which explains why hedoesn’t need any help explaining the role of every piece of equipmentbeing tested.
“We have teamwork among functions” is the wayDeMars explains how the P&DC can process mail and test new systems at thesame time. Even though construction is an ongoing process at the Center,somehow they manage to keep the aisles open and the floors clean.
The Fort Myers location is used as a testing facilitybecause of its medium-size mailflow and easy access to the airport. (In USPSlanguage, “medium size” means processing 3.5 million pieces of maila day.)
At the P&DC, aircraft deliver mail from all around thecountry and trucks bring mail from the surrounding five-county area. Mail issorted down to the delivery sequence, then shipped to any one of 47 locations(what you think of as your “local post office”). At Fort Myersletters are put in delivery sequence mechanically; the letter carriers addmagazines and advertising material, and head for their routes.
Delivery Point Sequencing (DPS) is an automated sortationsystem in operation at Fort Myers. A product of Siemens Dematic, DPS can sortmore than 32,000 letters an hour. A Mail Cartridge System is being tested atFort Myers in which a robot sweeps (clears out) cartridges from the sorter.Sweeping by robot can keep up with the pace of DPS processing, says DeMars;however, the mail cartridges are expensive compared to the standard plasticpostal trays.
The Direct Connect System (DCS) is also being tested at theFort Myers facility. DCS transports mail automatically from the cancelingmachine to the bar code sorter, thus maintaining the efficiency of bothmachines. In the current machines there is a difference in the speed of thecanceling machine and the speed of the bar code sorter; therefore the mail hasto be staged in trays between the machines, a manual handling operation thatincreases the potential for mishandling. The DCS takes the expense of thatmanual handling out of the process. “You improve the quality when youeliminate manual handling,” says DeMars.
With the Direct Connect System a pinch-belt conveyor carriesthe mail to the bar code sorter at a rate of 500 pieces a minute.
Now the P&DC is building a prototype of the UniversalTransport System in the Fort Myers facility. UTS is the most advanced version ofthe Tray Management System.
“USPS came to the realization that the TMS would haveto be able to handle sacks, packages and bundles as well as trays. That’sthe unique aspect of this system,” DeMars says. The prototype combines across-belt sorter and a powered roller suspended from the ceiling,
Automatic guided vehicles are another material handlingtechnology being tested in Fort Myers. According to DeMars, the AGVs areinvolved in a three-phase project:
• Phase1. One loop of guidepath will be the route followed by a laser-guided lifttruck (AGV Products) as it picks up a palletload of incoming mail from thereceiving docks and delivers it to the processing equipment.
• Phase2. The guided vehicle will take away the containers that have been filled withtrays by the robot.
• Phase3. The guided vehicle will take away the mail cartridges.
Remote Computer Reads (RCR) is another development that isoperational in the Fort Myers P&DC. RCR can read 70 to 80 percent of mailaddresses (either printed or script). The mail that can’t be read bymachine is transferred to an operator who looks at the letter on a screen,determines the ZIP code and creates a bar code address label.
“The biggest advance in address recognition in thepast few years is RCR,” says Norbert DeMars. He should know. After all,many of the developments in the Postal Service’s processing and materialhandling owe their success to the R&D performed at the Fort MyersProcessing and Distribution Center.
Whither the Tray Management System?
The Tray Management System (TMS) was exactly that: amaterial handling system to manage the flow of mail trays in a postal facility.Its components were conveyors to move the trays in and out, a high-rise storageand retrieval configuration, and a sorter to direct the flow of trays afterthey have been retrieved. “Tray Management Systems were installed at 30sites by three primary contractors: Accu-Sort, Lockheed Martin andSiemens,” says Tom Day.
Recalls Bill Dowling: “Initially when we began thisprogram, we looked for competition in the marketplace. At one time weenvisioned that we would retrofit all the facilities for TMS and that would bea big job for one supplier. It turns out that when the technology was shakenout, it was more challenging than what we or the suppliers expected. And now wehave three very capable suppliers and a nice competitive basis for whatbusiness we do put out for a Tray Management System,” Dowling says.
The initial contract for the Tray Management Systems has beenexercised and the Postal Service has gone no further with its deployment, saysTom Day. “We’re at a point now where we will completely revise thataspect of material handling in the Postal Service. We came to the conclusion inlooking at the program that the costs, particularly in terms of initialreliability and maintenance of the system, were beyond what we had anticipatedoriginally. It didn’t give us the return on investment we were lookingfor,” he says.
The TMS was installed in both large and small facilities.“That technology doesn’t fit everywhere,” Day says.“When you get to the small facilities, the level of complexity andinvestment required, you really can’t justify it.”
Day believes that the backbone of the TMS, either thetilt-tray or cross-belt sorter, is a good, solid technology, and is a validapplication in a medium to large facility.
“The storage and retrieval systems, on the other hand,were very complex in the control systems required to make those systemseffective,” says Day. He notes that the randomness of the trays movingand stored throughout the system “reaches a level of complexity thatmatches the FAA trying to move flights around the country.
“The way we work is to put the trays into storage andretrieve them at a given point in time during the course of the night for aspecific sort program. The problem we ran into was the capacity of the systemto feed the trays back into the machine,” Day says. “So if youtried to withdraw everything you accumulated during the course of the night,you couldn’t get it out fast enough to get it to the point where youneeded it. The processing machine just needed more mail than you are capable offeeding.
“The other thing that makes the TMS complex is that wehad 30 systems deployed under the contract to three different vendors. Soyou’ve got this logistics support system out there: three different setsof parts and three different systems to maintain on which to train electronicstechnicians. One of the ways we’ll be more effective on both maintenanceand logistical support of parts is when we get a fully deployed national systemand can take advantage of scale,” Day says.
Give Automation Some Running Room
Postal automation has a great track record and greatpotential -- provided that the 30-year-old Postal Reorganization Actdoesn’t keep USPS from competing in the kind of race that’s beingheld today.
Starting in the ‘70s with the ZIP Code, OpticalCharacter Recognition and bar codes scanning, the Postal Service has promotedautomation as a strategy of growth to the extent that two-and-a-half as muchmail is being moved through twice as many locations with only one-third moreemployees. By means of automation the cost of mailing a first-class letter waslowered in real terms. Other sections of this article show some the processingand material handling equipment that is taking the cost out of handling alltypes of mail, not just first-class letters.
Problem is, costs that weren’t around 30 years agohave started ganging up on postal income. For instance:
• Lettermail isn’t the only way to communicate or send a bill. You have fax,e-mail and overnight delivery services to choose from. “E-commerce iseroding first–class mail,” says retired vice president ofengineering Bill Dowling. “The growth of first-class mail, particularlybills and payments, has slowed dramatically to one or two percent growth ayear. First-class mail used to make a substantial contribution to theUSPS.” Also, e-commerce is proving to be compatible with advertising.Customers who respond to e-mail solicitation are sometimes mailed a catalog ordirect mail. But that doesn’t generate the same kind of income marginsthat first-class mail does.
• Energycosts are rising. USPS operates 30,000 postal facilities and runs 200,000vehicles.
• Universal service, mandated by the Reorganization Act, eats into thepostal budget as 1.7 million new homes and businesses are added to deliveryroutes every year.
• Start-up firms associated with the Internet are nibbling at postalrevenue.
• Foreignpostal services have opened offices in the U.S.
Increased costs plus decreasing revenues add up to a loss ofrevenue that is expected to come to $2 billion to $3 billion this year.
Not that the Postal Service hasn’t been tightening itsbelt. More than 800 capital expenditures on new construction and renovationshave been halted. Automation projects are being reviewed, delayed, halted.
The Postal Service is having a tough time working under therestrictions of the old Postal Reorganization Act. Postal officials, customers,USPS workers and legislators agree that the Act must be changed(“reform” is the operative word).
“There has to be a change in the Postal ReorganizationAct that surrounds the Postal Service,” says Dowling. “There’sbeen a change in the market but not in the body of law that surrounds thePostal Service. We believe it is inappropriate.”
What should a new piece of legislation contain? It isgenerally agreed that the Postal Service needs an alternative to dragged-out,hat-in-hand rate setting, where everybody gets a crack at proposed rates whilethey’re in the process of being set.
“My view is that we take this from the public sectorto the private sector, including first class, with safeguards. I’m notsaying: Just turn the switch. Allow the Postal Service to compete and allowother organizations to compete on the monopoly side, but still maintaining theconcept of universal service.”
New legislation should provide for more flexibility in bothpricing and wage negotiations. These were some of the points made in a lettersent by the Postal Board of Governors to President Bush last March: “ThePostal Reorganization Act obligates the Postal Service to provide universalservice to America under regulatory and rate-setting schemes now hopelesslyoutdated. Prices for domestic services, which must be cost based, requireapproximately 18 months to prepare, litigate, and implement.”
The official Postal Service position is that the PostalReorganization Act needs to be reformed, to be brought up to the realities ofdoing business as it’s being practiced now, and will be practiced in thefuture.
The mandate of “universal service” covers thingswe take for granted:
• A roomfull of people who do nothing but make address changes for households andbusinesses;
• Thoselocal post offices that don’t get closed because they are integral to thecommunity;
• Delivery of mail to every remote location that might not even be on themap.
John E. Potter, incoming Postmaster General, USPS, came tothe point in his inaugural address: “The simple fact is, we are at acrossroads. Competition and technology are forcing us to re-examine everything– everything we are doing.” Postal reform was one of those things.“And we have to keep our focus on reform. Working with our stakeholders,we have to reach consensus on the changes that will keep the Postal Servicestrong for many years to come. I’m going to do everything I can to bringall the parties together to work toward this goal. I’m not a rookie atthis. I’ve been around a long time. I’ve been the COO andI’ve negotiated contracts. I’m convinced we can do this.”
What To Do with the Bulk Mail System?
It’s hard to believe that the National Bulk MailSystem is almost 30 years old. Seems like only yesterday that this 21-facilitynetwork of mechanized material handling installations came on line -- and wasgenerally trashed by members of Congress and the newspapers. I mean, the BulkMail Centers were described with phrases like “nonsense machinery”;“full of unnecessary gadgets”; “wasteful technology”;“a management blunder of the first magnitude”; and “onebillion dollar boondoggle.” Whatever criticism the Postal Service gets nowis tame compared to what the Bulk Mail System got.
The mailstream of letters and packages has grown socomplicated that the current freeze on funding is being used as a time toponder what the BMCs should be doing in the future and how much money should beinvested.
Whatever the Postal Service does with the Bulk Mail System,it certainly won’t get newspaper headlines these days. But back in the1970s the Bulk Mail System made news by flouting all kinds of postaltraditions:
• TheBulk Mail System enabled packages to get their own network of processingfacilities instead of being a neglected afterthought in Post Offices whereletter mail enjoyed favorite-child status. One Bulk Mail official made theheretical statement to Material Handling Engineering: “We’re in the material handlingbusiness.”
• BulkMail Centers were not multistory monuments decorated with statues and murals.Instead, Bulk Mail Centers are big, flat, one-story buildings centered aroundtrucking outside and mechanization inside. “If you’re looking forthe statues, murals and architecture that provided opportunities for sculptors,muralists and architects in the 20s and 30s, forget it. The BMCs areno-nonsense industrial buildings,” stated MHE.
• TheBulk Mail System is an offshoot of the Postal Reorganization Act signed intolaw by President Nixon in 1970 and which made the Postal Service an independentbusiness, more or less. The Reorganization Act marked the start of postalautomation; but its provisions no longer apply to today’s technology ormarketplace.
Bill Dowling, retired USPS vice president of engineering,recalls how the Bulk Mail System has evolved. “The Bulk Mail Centers weredesigned to be networked facilities: They accepted mail at origin, transportedit to destination city or BMC through a network and then made the delivery,”says Dowling. Today the BMCs receive more and more mail specifically for theirdelivery area than they do for the network as a whole. Originally the BMCs weredesigned to accept parcels from large mailers, retailers and consumers, as wellas second- and third-class mail -- publications and advertising like directmail.”
As noted in other parts of this article, publications anddirect mail -- “flats” -- is being processed by automation in theParcel & Distribution Centers.
“Over the years we worked with our customers todevelop more efficient processes and pricing strategies,” says Dowling.“And the one that really emerged as a work-sharing initiative by which --particularly publishers and advertisers and more recently the package market --they sort the mail and transport it to the destination city.” AddsDowling: “The BMCs were designed 30 years ago for network purposes; theyneed massive technology change to function as highly efficient distributioncenters.”
The current vice president of engineering, Tom Day, saysthat the Bulk Mail System is still relevant, but the product that has flowedthrough them over the years has changed. Sacks, for example, are being usedless and less in the Postal Service. Also, mail used to go to a BMC for primaryor secondary distribution before flowing down to a processing center.
“Although old, the BMCs have a robust technology thatis capable of doing sorts for us,” says Day. “We use it forpackaged products, as well as sacks that enter the system; and even as we moveproduct into tubs and trays, it’s capable of handling that product aswell. Also, the non-machinable product, such as tailpipes, is handled in theBulk Mail Centers.”
Probably the biggest improvement in the material handlingsystem in the Bulk Mail Centers is parcel induction onto the sorter.Originally, a “facer” turned the parcel so that the label waspositioned so that a “keyer” could key the parcel’s identityinto the system. Currently, an upgrade called the Singulate, Scan and InductionUnit (SSIU) that automates the induction process has been tested and introducedand will modify all 21 BMCs. “The SSIU scans all six sides of a containeror package to read the bar code automatically,” says Day. The singulatororganizes the mailstream into a string of individual mail pieces that areconveyed to the sorter.
The six-side bar code reading is being introduced into thesecondary sort. “We’ll bring the same technology over to theprimary sort induction system, with OCR capability to do a six-side read on animage lift and bar code application,” Day says.
Sorting the big stuff
They’re called non-machinables and the Bulk MailCenters have the job of handling them. Some are truly non-machinable, likeshrubs; but mechanical solutions to oversize or overweight parcels are beingsought. “There’s enough throughput to warrant a sorter for thattype of non-machinable,” says Jeff Campell, manager, postal accounts,Federal Systems Operations, Siemens Dematic MA. “Every BMC has a mostly manualsystem to handle them. Employees fill a cart with large parcels and unload themonto a belt conveyor that takes them up to what they call a “crow’snest.” An operator reads the address on the carton and pushes it across aball transfer onto a gravity spur. “It’s an extremely timeconsuming process,” Campbell says. To replace the manual system, Campbellsays that a Non-Machinable Outsize (NMO) cross-belt sorter is being tested atthe Detroit BMC. “The NMO sorter brings in much higher throughput andmuch more automation. You can automatically dump parcels, singulate them, scanthem and sort them—there’s very little manual intervention,”Campbell says
Maintaining the BMCs
However, most of the activity in the BMCs involvesmaintenance. “The material handling systems in the BMCs are nearly 30years old, so there are end-of-life issues. When you have pushed basic systemsthat far you get to a point where you have safety concerns,” says Day.The Postal Service has spent over $74 million over the last two years toreplace the conveyors. Day says there has been some increase in belt speed andsome decrease in maintenance cost, but the basic reason for the upgrade wassafety. Next will come an upgrade on conveyor safeguards for maintenancepersonnel.
Since many of the conveyors in the BMCs are mountedoverhead, structural engineers have been examining that aspect of the conveyorsystem. “Sometimes over the years you make modifications to theconveyors,” Day says. “Some of the weights on those systems get tothe point where you’re not only looking at the structural soundness ofthe conveyor itself but also looking at the supporting structure of thebuilding.”
From Postal to Commercial
Sometimes the connection is closer than you might imagine.Some products, for example, migrate from postal to commercial. Sometimes thesame pressures are felt by both postal and commercial. And work sharing givescommercial incentives to share the mail load with postal.
Material handling in controls systems is an area that can beimmediately transferred from the Postal Service to the commercial marketplace.Controls are really the heart of a material handling system. “Withconveyors, for example, there’s always software that gives them theintelligence that makes them work,” says Judy F. Marks, president of theDistribution Technologies business unit of Lockheed Martin Systems Integration-- Owego. “Sometimes the software is at a low machine level and sometimesit’s higher up. But we have some wonderful control architectures thatallow heterogeneous conveyors to talk to each other.”
Another area is Optical Character Recognition (OCR).Lockheed Martin has been a leader in working with the Postal Service on lettermail applications of OCR, says Marks. “We have taken that to the nextlevel: What we call a Carton OCR solution allows you to lift an image from oneside up to all six sides of a carton or package. Carton OCR then obtains thedesired information by reading the labels or decoding bar codes. The systemoften uses database correlation and look-up to help read the machine-printed orhandwritten information.”
Throughput needs changing
The Postal Service has significant throughput needs becauseof the volume of mail that gets handled: billions of letters, billions ofmagazines, even billions of packages. Most commercial warehouses anddistribution centers don’t handle that much. “But we’reseeing a change,” Marks says. “Now more distribution centers have24-hour-a-day, seven-day-a-week, 365-day-a-year requirements that the PostalService has always had. Whether companies are responding to Web orders or tojust-in-time commitments, they are trying to optimize their physicalinfrastructure,” she says.
Marks is seeing a lot more individual units being handled inthe commercial market, probably driven by e-commerce. “Our previousdistribution consisted of palletloads being shipped to a retail outlet from adistribution center,” she says. “Now, that still happens -- butthere are a lot of individual units, whether they be split cases or mail orderprescriptions being shipped by a pharmaceutical company to a number ofdestinations. Things are changing in complexity in the commercial marketplacebecause the customers are different now.”
Sharing the workload
The Postal Service encourages work-sharing with large-volumemailers because it allows the mail, whether it be letters, flats, parcels orpackages, to enter its system farther downstream. That way, they handle itless, resulting in lower operating costs. “In work-sharing programs,Lockheed Martin offers a unique bridge: as a provider of systems to commercialindustry on one side and provider of systems to the Postal Service on theother. We understand both domains,” Marks says.
Work-sharing is a fairly robust business. The Postal Servicehas guidelines for calculating the discount your company is allowed for theamount of mail processing that you do. Based on that discount, you candetermine your capital and your return. MHM