USPS Network Rationalization Phase 2 FREQUENTLY ASKED QUESTIONS for Mailers AND THE MAILING INDUSTRY (January 12, 2015)

 

What is Network Rationalization?
The Postal Service is responsible for maintaining an efficient mail processing and transportation network. The pace of change affecting the Postal Service has accelerated due to the ubiquity of computer-based communications, both for business and personal use. Stamped letter mail volume has been declining for a decade and will continue to decline.

These factors, along with efficiencies brought about by investment in automation, have created various ranges of excess capacity at the local level in our mail processing facilities and transportation network. To ensure that the Postal Service continues to deliver on its universal service commitment, our processing network has to be efficient, affordable, and flexible. To accomplish this, we have to successfully adjust our network locally to match our resources with a declining mail volume.

What criteria were used to make the consolidation decision?
The decision to consolidate a facility is not made lightly. There is a standardized process by which the Postal Service must follow in order to consolidate a facility. This process is called Area Mail Processing study. Area Mail Processing (AMP) is the consolidation of all originating and/or destinating distribution operations from one of more facilities into other automated processing facilities for the purpose of improving operational efficiency and/or service. There is also a standardized process for the communication of any plan under consideration. Every proposal for consolidation is evaluated, employee, congressional, mailing industry and public input is sought and considered prior to any decision being made. Once a consolidation is approved, two after cost studies are performed to ensure that savings and expect service impact are realized.

Why is a particular facility included in the study?
There are two ways in which a particular facility can be included in a study. The bottom up approach is where the process begins with the District Manager or Senior Plant Manager notifies the Area Vice President about their intention to conduct an AMP feasibility study. The AVP then informs Headquarters. The top down approach is used when Headquarters contacts the AVP about initiating a feasibility study. When either one of the approaches is used, communication to stakeholders must occur when there is clear intent to proceed with an AMP feasibility study. The notification of intent to perform the study will include an invitation to the public to submit any comments or concerns to a Postal Service representative.

How soon could a mail processing facility be closed?
Phase 2 consolidations will begin in early January 2015 and are expected to be completed by the fall mailing season.

How many different types of processing facilities are there? What’s the difference among them?

There are eight different types of processing facilities:

Processing and Distribution Centers — P&DCs process and dispatch mail from Post Offices and collection boxes within a region.

Customer Service Facilities — CSFs are Post Offices, stations and branches that contain processing equipment. Also known as Customer Service Mail Processing Centers (CSMPCs)

Network Distribution Centers — NDCs consolidate mail processing, increase operational efficiency, decrease costs and maintain service while expanding the surface transportation reach.

Annexes — Annexes provide the larger facilities with additional capacity for processing and distribution.
Surface Transfer Centers — STCs distribute, dispatch, consolidate and transfer First-Class Mail, Priority Mail and Periodicals within a specialized surface transportation network.

Air Mail Centers — AMCs process and distribute inbound and outbound domestically flown mail for a specific geographic location.

Remote Encoding Centers — RECs process video images of letter mail to determine a barcode for the envelope.
International Service Centers — ISCs process and distribute inbound and outbound international mail.

What is an Area Mail Processing study?
An Area Mail Processing (AMP) study is the consolidation of mail processing operations to improve operational efficiency and/or service. An AMP study may involve the consolidation of originating operations (canceling and sorting locally generated mail at a facility close to where the mail originates), destination operations (sorting and preparing mail received from more distant areas for local delivery) or both. The intent is to more efficiently use Postal Service equipment, facilities, staff, work hours and transportation.

Additional information can be found at http://about.usps.com/streamlining-operations/area-mail-processing.htm

How long do AMP studies take?
Study times vary depending on the complexity of each location; however, the average AMP study time takes between three and five months to analyze financial information, collect public feedback, review the information and render a decision.

Can some processing facilities be closed without going through this AMP process?
Yes. The Postal Service can close annexes and partial mail processing operations within facilities without going through the AMP process.

Does the Postal Service intend to add additional sites to the Phase 2 list that were not previously announced?
At this time, there are no new sites being added to Phase 2.

If a processing facility closes, will the related postmark be gone as well?
Yes. However, Post Offices have the postmark available for customers who wish to have their mail hand-cancelled.

SERVICE
What are the proposed service standard changes for First-Class Mail (FCM)? Is the FCM delivery day range changing?

Yes, Phase 2 will affect the existing service standards for First-Class Mail and Periodicals Mail. The changes may be seen by comparing Tables 1 and 3 with Tables 2 and 4 at the following Federal Register notice link: http://www.gpo.gov/fdsys/pkg/FR-2014-01-24/pdf/2014-01382.pdf

What will be the new CETs for First-Class Mail (FCM) entered at SCF? Would it be eligible for overnight service?
Properly prepared and containerized intra-SCF Presort FCM volume entered at the SCF plant by the 08:00AM CET for mixed Intra-SCF and by the 12:00PM CET for 5-Digit/Scheme containers will receive overnight service.

What are the proposed service standard changes for Priority Mail and Express Mail?
The Postal Service is not planning any changes to the Priority Mail/Priority Mail Express service standard business rules as a result of network rationalization. However, there will be changes in the service standards applicable to specific 3-digit to 3-digit ZIP Code origin-destination pairs based on the reconfiguration of the network, and changes to the labeling lists which implement the current service standard business rules.

What are the proposed service standard changes for Periodicals mailings?
Phase 2 will affect the existing service standards for First-Class Mail and Periodicals Mail. The changes may be seen by comparing Tables 1 and 3 with Tables 2 and 4 at the following Federal Register notice link: http://www.gpo.gov/fdsys/pkg/FR-2014-01-24/pdf/2014-01382.pdf

The graphic below illustrates an approximate breakdown of First-Class Mail service performance after Phase 2 implementation

What is the CET for destination entered Periodicals to receive overnight service?
Properly prepared and containerized destination entered non-FSS Periodical volume entered at the SCF plant by the 11:00AM CET for mixed Intra-SCF containers, by the 14:00PM CET for 5-Digit/Scheme containers, and by 17:00PM CET for direct 5-digit Carrier Route pallets will receive overnight service. Properly prepared and containerized destination entered FSS Periodical volume entered at the plant by the 08:00AM CET for mixed Intra-SCF containers and by the 11:00AM CET for 5-Digit/Scheme containers will receive overnight service.

What are the proposed service standard changes for Standard Mail?
The Postal Service is not planning any changes to the Standard Mail service standard business rules as a result of network rationalization. However, there will be changes in the service standards applicable to specific 3-digit to 3-digit ZIP Code origindestination pairs based on the reconfiguration of the network, and changes to the labeling lists which implement the current service standard business rules.

What are the proposed service standard changes for Package Services?
As is the case with Standard Mail, the Postal Service has no plans for any changes to service standard business rules for Package Services as a result of network rationalization. However, there will be changes in the service standards applicable to specific 3-digit to 3-digit ZIP Code origin-destination pairs based on the reconfiguration of the network, and changes to the labeling lists which implement the current service standard business rules.

How soon will the Postal Service implement the proposed service standard changes?
No service changes associated with the request will be implemented earlier than January, 2015

How much mail will be delivered overnight once Phase 2 is implemented?
Current estimates indicate approximately 25% of the Single Piece First-Class Mail volume is expected to be delivered overnight.Overall 13% of First Class Mail volume is estimated to be delivered overnight, about 35% expected to be delivered in 2 days and about 52% delivered in 3 days.

The graphic below illustrates an approximate breakdown of First-Class Mail service performance after Phase 2 implementation:

The Postal Service is consolidating its network. How will this impact mail and package delivery?
The consolidation of the processing network will not impact the delivery process.

Won’t this slow down service?
Overall, the time it takes First-Class Mail to reach its destination will increase slightly from an overall average of 1.8 days to an overall average of 2.1 days.

How will military mail be impacted by these changes?
Military mail worked domestically will follow the same service standards as domestic mail.

PRICING – SAVINGS
Will there be a price increase?
There is no price increase associated with this change.

Will discounts be offered for overnight service for mail deposited before 8 a.m.?
No.
Data Source: ODIS & RPW FY15 PQ2

How much will this effort cost the Postal Service?
Realigning the network will cost a minimal amount. The Postal Service does not plan any expansions due to the current capital constraints of the organization.

What are the estimated cost savings resulting from the proposed changes?
Phase 2 is projected to save the Postal Service approximately $750 million per year in savings.

Will mailers who currently induct their mail at a BMEU that is co-located within a USPS Plant on the PHASE II lose their SCF discount?
Effective January 2015 to qualify for DSCF pricing mailers will be required to enter mail at the SCF (Federal Register Dec. 18, 2013). BMEU/PVDS Mailers should prepare mail according to the effective Labeling Lists, abide by the grace periods built into the Labeling Lists, and enter mail in accordance with Mail Direction Files

What were the savings captured by the Postal Service for Phase 1 consolidation for FY12, FY13 and FY14 year to-date?
As part of the network rationalization process, there is a Post-Implementation Review (PIR) that is performed for each consolidation to evaluate the specific implementation. These reviews are conducted twice: once at six months after the consolidation and then again after a full year has elapsed. At this time, based upon either the interim or the final review as available, the Postal Service is projected to save approximately $865 million per year.

see more January 2015 Phase2 Network Rationalization FAQs for Mailing Industry.

Jan2015Phase2NetworkRationalizationFAQsMailingIndustry

USPS Network Rationalization Phase 2 Update November 25, 2014 – Updated 1/13/2015 NetworkRationalizationPhase2Overview11252014