Chapter 4 Our Operations

Customers can create professional direct mail pieces using, which saves time and money with addressing, collating, sorting, and posting. Four services include Premium Postcards, Click2Mail, CardStore, and Mover’s Postcards. Customers choose a format — postcard, letter, self-mailer, or greeting card — and each mailpiece is personalized, printed, and in the mail the next business day. Customers can also unleash their creativity using Customized Postage, where they can convert their favorite photos into advertising and business logos into real postage.

Postage Technology And Secure Electronic Services

Postage meters and PC Postage services provide a convenient postage payment option, particularly for customers who mail frequently. These services now integrate options such as insurance and Delivery Confirmation with postage payment, and make it even easier to print postage labels and account for postage.

The May 12 pricing changes for all products contributed to the growth of PC Postage, with nearly a 40 percent increase in revenue and a 20 percent increase in registered users. PC Postage was also the first postage payment channel to provide customers access to the commercial pricing for Priority Mail and Express Mail services as well as volume rebates for Express Mail.

The postage meter market continued its transition to information-based indicia (IBI) postage. IBI postage meters produce a digital two-dimensional barcode that includes postage payment and other related service information. As of the end of 2008, IBI devices accounted for 68 percent of all meters and produced over 85 percent of meter revenue.

The Postal Service extended its Customized Postage market test for another year. Customized Postage uses PC Postage technology to allow customers to personalize postage by uploading a digital image that can be printed with an IBI. Customers bought nearly 30 million Customized Postage labels this year.



Service performance and operating efficiency have gained more from the automation of mail processing activities than from any other single factor. Ongoing developments in enhancing and extending the benefits of automated processing present new opportunities to continue to reduce costs and improve service. The most significant current development is the introduction of the Flats Sequencing System (FSS), which will do for flat-shaped mail what delivery barcode sorter machines have been doing for letter mail the past 15 years  — automating the placement of mail into the order in which it is delivered.

Letter Mail Automation

Address recognition rates for letter mail continued to improve as additional equipment and software upgrades were deployed. Three software releases under the Distribution Quality Improvement (DQI) program improved recognition of handwritten and machine-printed addresses, which keeps more letters in the automated mail stream. Phase 2 of DQI will resolve mailing address conflicts further by incorporating additional information from commercially available name and address databases. The Board of Governors approved funding for Phase 2 in September 2008, with the first software release expected in April 2009.

During 2008, 110 new delivery barcode sorter Phase 6 machines and 1,133 stacker modules were installed in plants, increasing capacity for processing letters in delivery point sequence. Letter mail processing equipment has been upgraded to provide IM barcode capabilities and support tracking of inter-facility mail. The new data-rich environment is a significant step forward in letter mail tracking. This year, the Board of Governors approved funding to purchase 550 Advanced Facer Canceller System 200 machines. They will replace older equipment and improve performance by eliminating steps in letter processing.

Flat Mail Automation

Deployment of ink jet canceller modification kits for 230 Automated Flat Sorting Machine (AFSM) 100s located at over 200 sites began in September. These upgrade kits enable the equipment to cancel postage on flat-size envelopes, thereby eliminating other manual and mechanical cancellation steps.

Under the Flat Recognition Improvement Program, an AFSM 100 software release increased read rates by 2 percent and lowered error rates almost 1 percent, resulting in fewer misdirected mailpieces.

Flats Sequencing System

Designed to fully automate the sorting of flat mail into carrier walk sequence, the pre-production FSS was put into live operational service at the Dulles plant after initial testing. The first production system began operation in May and has been expanded to 10 delivery units serving 19 different Northern Virginia ZIP Codes. This expansion provides more opportunity to study the impact of FSS on transportation, staging, and distributions to carriers. The first year of FSS operation in Northern Virginia has helped identify opportunities to fine-tune operational planning and methods, as well as the manner in which flat mail is presented by customers. The potential of FSS is evident from experience to date: route adjustments have eliminated full-time routes; equipment used by carriers to sort flat mail has been reduced; and excess facility space and vehicles are being redeployed.