Chapter 2 Postal Operations

The Postal Service continues to play an influential role in the development and design of the new terminal dues system set for implementation in 2014 as well as the related development of a pay-for-performance system for all 191 UPU members. The Strategic Planning Group’s Scenarios Subgroup, chaired by the U.S., released a detailed study on the future of the postal sector through 2012, while the Postal Security Action Group focused efforts on combating terrorism and money laundering, increasing the use of the eMARIA (electronic Mathematical Analysis of Route Irregularities in the Air Transport of Mail) computer application and strengthening cooperation with air carriers. Under the leadership of the Postal Service, the Standards Board advanced an ambitious agenda, advocating the use of electronic data interchange systems, electronic postmarks, Intelligent Mail barcodes, and greater protection of intellectual property rights.

The UPU’s Council of Administration (CA) held its regular session and several of its groups met again during the spring POC session. Though the U.S. is not currently a member, the State Department and the Postal Service remain active in a number of CA Groups. This includes chairing the Acts of the Union Project Group, which is replacing the term “postal administration” with “member country” and “designated operator” in the UPU acts. This is essential for establishing responsibilities and financial liability among governments and postal operators. Other work included revising eligibility criteria for the Quality of Service Fund and approving plans for the November 2006 UPU Dubai Strategy Conference and the 2008 Nairobi Congress.

E. Mail Distribution

1. Automation Activities

The Postal Service continues to automate mail distribution operations to improve efficiency and reduce costs. The foundation of this effort is barcode technology, which includes barcoding mail, processing barcoded mail in automated operations, and adjusting workforce and staffing as necessary to capture savings.


Letter mail address recognition rates continued to rise as additional hardware and software upgrades were deployed for existing multi-line optical character readers (MLOCR), delivery barcode sorter input/output sub-systems (DIOSS), and remote computer reader (RCR) equipment. Recognition improvements deployed to 342 mail processing centers under the Letter Recognition Enhancement Program (LREP) this year raised the letter mail encode rate to more than 92% while slightly reducing the error rate. LREP is an incentive-based program where the supplier is paid based on the incremental performance improvements achieved. Another enhancement uses an additional database that is expected to improve address coding to high rise buildings and firms. These improvements are projected to yield with an additional 2–3 percentage point increase in the overall system encode rate by late 2007. Recognition improvements are also planned for wide field of view cameras previously installed on all barcode sorters.

The DIOSS machine is a further advancement of delivery barcode sorter (DBCS) technology that includes optical character reader (OCR) and

input/output subsystem capability. It allows automated processing of mail that currently requires manual distribution. The Postal Service began deployment of 395 new machines and 222 kits to upgrade existing DBCS to DIOSS machines in 2006 and expects to complete deployment in June 2007. As a result, 646 MLOCRs that have reached end-of-life will be removed from service. The MLOCR components that are reusable as spare parts will be salvaged and sent to the Postal Service’s parts depot in Topeka, Kansas.

Letter mail automation capabilities were expanded significantly in 2006 with the addition of new barcode recognition and data collection functions to support marketing and Intelligent Mail efforts. Most of the letter mail processing equipment has been upgraded to provide Intelligent Mail barcode capability, as well as new functionality to support the tracking of inter-facility mail. The new data-rich environment created by these efforts is a significant step forward in the tracking of letter mail, both by single piece and by tray.


The Flat Recognition Improvement Program is increasing recognition rates and lowering error rates on flat sorting machines. The result is fewer misdirected flats and better customer service. Recognition rates improved by more than 2% while error rates were reduced by 0.4%. Incremental improvements to further enhance flat recognition rates are planned for 2007.

The Automatic Tray Handling System (ATHS) is increasing capabilities and reducing the labor required for the Automated Flats Sorting Machine (AFSM) 100. It replaces the tray take-away conveyors on the original AFSM 100 with a more functional fixed mechanization system. Each ATHS automatically ejects full trays onto the transport conveyor and produces a properly labeled empty tray to replace the one just dispatched. When a run is completed, the ATHS systematically dispatches all trays, then labels and inserts a new set of trays for the next sort plan. Deployment of 354 ATHS began in June 2005 and was completed in September 2006.

Deployment of an automated feeding system for the AFSM 100, the Automatic Induction (AI) system, is underway. The AI system uses ergonomic workstations to prepare flats in automation-compatible trays. A mechanical tray handling system transports trays to the feed stations where mail is automatically inducted without operator intervention. Deployment of 210 AI systems began in late October 2005 and was completed in September 2006. A Phase 2 contract was awarded in 2006 for 148 additional units, with deployment planned through May 2007.


The Automated Package Processing System (APPS) is the Postal Service’s next-generation machine for sorting parcels and bundles of mail. It is replacing the older, more labor-intensive Small Parcel and Bundle Sorter (SPBS). APPS automates package distribution and provides greater processing capacity through automatic package induction, singulation, and address recognition using an OCR, barcode reader, and video coding system. The high throughput capability (up to 9,500 pieces per hour) is supported by automated container unloading. The system also collects detailed information about each package, such as type, size, and weight and supports in-route tracking of Delivery Confirmation codes.