# Presentation: 540070

## Flat Symposium Summary

- May 17, 2007

## Anita Bizzotto

- Identify key issues for FSS.
- Customer involvement critical.
- Affordability & Service.
- Understand industry concerns.

## Goals

- Pat Donahoe: “That everyone understand the direction for flat mail and we’re all working together.  We need to improve service and reduce cost.”
- “Do you no harm.”
- “Lowest combined cost.”

## Goals

- Rosa Fulton: “USPS to have a clear understanding of the every issue surrounding the flat strategy and what industry issues need to be resolved.”
- Get your mail out of the coffin.

## Goals

- Joe Schick: “Get answers to the big questions, get a better understanding of FSS, and make sure that we ask all questions before going forward.”
- Dennis Farley: “Emphasize the importance of Periodicals and the need to maintain or improve service.  Don’t move backward, move forward.”

## Goals

- Joyce McGarvey: “Educate the industry about what’s going to happen.  Make the USPS aware of concerns and issues.  Get agreement on future direction for flats.”
- Tim Gable: “Know what we’re facing and direct it so that it doesn’t harm the direct mail industry.”

## USPS Goals for Flats

- Drive down costs through automation
- Enable future growth
- Improve processing performance & service
- End-to-end visibility
- Create lowest combined cost system.

## Everyone Should Know

- A lot of things have gone right.
- Indy test
- Rosa’s Communication
- MTAC Work Groups
- UFSM 1000 reader
- Barcode height decision

## Concerns/Questions

- Size of barcode
- Migration of flats to letters.
- Upside down address.
- Can mailers opt-out of FSS?
- Captain Midnight Barcode Decoder
- Standardization requirements for all classes
- Barcode requirements for small mailers
- Concerned about the length of the barcode.
- Different barcode specs for flats and letters.

## Concerns / Questions

- Be sure that dividing mail into two streams (auto and non-auto) doesn’t create more cost.
- Bindery challenges for perfect pallets – new strapping equipment (more cost).
- Number of schemes on a FSS pallet.
- Double presorts
- What happens to mailers that are too small to get on a pallet.

## Concerns / Questions

- Minimize unintended consequences – pay attention to Dulles test.
- What’s the future of presort?  FSS/Non-FSS
- Timing of FSS zones versus mailpiece production.  Labeling list timing is critical.
- Need to know the location of equipment (FSS and AAPS).
- Need to learn from AAPS rollout – eliminate stumbles.

## Concerns / Questions

- Driving up bundle rates at the printers – smaller bundles.
- 20 ounce limit should be raised, particularly for co-mailed copies.
- When will presort rules be developed?
- Need new pallet level for FSS machine.
- What happens to firm bundles in FSS? (Stay as firm bundles and not run on FSS – Dave)

## Concerns / Questions

- Co-mail and co-pal Periodicals and Standard Flats (Sharon’s working on rules.)
- What will be the standard size for bundles?
- Will the USPS be able to standardize the FSS process throughout multiple facilities?
- Will FSS result in fewer drop ship locations?
- Will fewer drop ship locations result in reduced drop ship discounts?

## Concerns / Questions

- Slip sheeting a multi-scheme pallet.
- Focus on the environmental impact.
- What happens to co-mail in an FSS environment?
- What will catalog volume be next year as a result of the rate case?  How will that impact FSS?
- Will in-home dates change with FSS?

## Concerns / Questions

- Mail visibility
- Will FSS result in more pallets and more trucks resulting in more cost?
- Staging inbound and outbound mail.
- Will FSS alter the timeliness of ESPN (the magazine) aka, the mailbox anchor?
- Critical Entry times should not become earlier in FSS
- FSS should not add costs.

## Concerns / Questions

- NNA members are just fine with the new rate structure and FSS.
- Concerned about multiple deadlines combined with less competitive rates.
- Keeping the same delivery dates in FSS/non-FSS zones.
- Cost of hauling to FSS facilities.
- Exemption for newspapers and HD shoppers.

## Concerns / Questions

- DOT Hours of Service for truck drivers.
- Redirections.
- Dock congestion.
- FAST – Hope that USPS uses data.
- Challenge for USPS to optimize networks and facilities under FSS.
- FSS needs all mail prior to the first pass.
- If the USPS doesn’t find the right CET, they won’t get enough volume for the FSS machines.

## Concerns / Questions

- Will risk based verification hurt mailers?
- What are the plans for Network Redesign (NIA started in 2002)?
- Editorial closes, printing, and binding times might need to be changed to meet new critical entry times (CET).
- USPS should have a common access website.

## Concerns / Questions

- Consistency of delivery is critical for catalogers, so it’s important for the industry to be in synch with FSS deployment.
- How will the USPS stage and prioritize the mail for FSS?
- Will mail be redirected to another facility or manual processing during heavy volume periods?
- When will we need to implement new addressing standardization requirements?

## Concerns / Questions

- How will FSS machines process high volume mail and still meet the current delivery performance?
- Does it make sense to take some products directly to the DDU (saturation & newspapers)?
- Will the USPS use the FAST data to provide feedback to the mailer that the FSS machine is overbooked and their mail will be deferred?
- Will the performance of mail in the verification process affect the rate?

## Concerns / Questions

- What will happen with the redeployment of UFSM 1000’s and AFSM 100’s and when will the industry know where they are going?
- USPS should lay out as many process flows as possible prior to the rollout of FSS.
- New law will provide the USPS with an opportunity to make more rapid adjustments to the incentives.

## Concerns / Questions

- Machinable flats with 5-digit or lower presort should see lower costs.
- Will Carrier Route mail be cheaper or more expensive?
- Diversion of time sensitive flats could lead to manual processing and higher costs.
- Impact of diversion to manual processing will be more severe than today.

## Concerns / Questions

- Will the new CET be noon of the day prior to delivery?
- Carrier route bundles being processed on FSS will increase bundle prep costs.
- Avoiding bundle prep costs will help.
- FSS will cause new rate categories and new cost studies will be needed to define how mail is handled.

## Concerns / Questions

- If mail is prepared for FSS, it will cost much more if it is manually processed.
- Timing of the switch to FSS prep is critical.
- A parallel rate structure may be necessary.
- What happens to First Class flats?  How will they be handled?
- Carrier Route rates should decline because they will trade one manual sort to two automated sorts (same trend as letter mail)

## Concerns / Questions

- Pricing can be done differently under the new law and the time to look at it is now.  Don’t use the old paradigm.  The market should drive the rates.
- If Carrier Route rates do not decline under FSS, then why are we doing this?
- Re-look at classifications.
- Don’t price products like the last case where future automation drives current prices.

## Action Items

- Increase customer applied barcodes.
- Improve address & barcode quality.
- Standard address placement (tray becomes a case).
- Clarify mail prep requirements.
- Clarify entry points & entry times.
- Resolve address orientation (right side up).

## Action Items

- Resolve First Class Address location.
- Push down the ACS costs for flats from $0.25 - $0.05 (letter rate).
- Can barcode be consistently be produced at .125in?
- Resolve Barcode clear space requirement.
- Need hardware to decode barcode on the shop floor.

## Action Items

- Resolve cover wrap address orientation.  USPS prefers right reading address and some mailers can’t do it – come up with a compromise solution.
- Find the optimal point where printing and reading the barcode can be done with high degree of success.
- Reduce the clear space around the barcode.

## Action Items

- Evaluate automating the bundle sorting and opening for FSS.
- Develop 5 digit scheme pallets to bypass AAPS.
- Communication through Fed. Register, road shows, webcasts, PCC meetings, BSN.
- Need to develop presort rules.
- Work out rules and rate issues for co-mail and co-pal for Periodicals and Standard flats

## Action Items

- Analyze Dulles & Phoenix zones to see how FSS mail prep would look within next month.
- Evaluate the rate structure for drop shipping to ensure that drop shipping to fewer locations doesn’t cause higher costs because of lost dropship discounts.
- USPS should assimilate more information about demand.

## Action Items

- USPS will evaluate technology to eliminate the need for slip sheets.
- Migrate to Performance Based Verification/increase feedback from BMA.
- USPS will test scanning top pieces of mail for visibility.
- Rosa will share the deployment schedule with the industry.

## Closing

- Provided a great deal of information.
- Resolved a number of questions / open issues
- Generated a number of questions / concerns.
- Identified a number of action items.