Submitted by Darin Marks, Senior Resource Manager, Production Solutions
Just days after the Postal Regulatory Commission (PRC) approved the significant increase in postage rate for 2014, the United States Postal Service (USPS) filed a Load Leveling request. The proposal recommended adding one day to the delivery service standards for standard mail entering Sectional Center Facilities (SCFs) between 4:00PM on Thursday and 4:00PM on Saturday.
The initial reaction from the mailing industry was not positive and, some would say, even bitter. Mailers were still trying to budget for a considerable postage increase based on the original service standard and now that standard was going to be extended? In-home windows were already becoming increasingly more difficult to predict with hundreds of postal facilities being consolidated over the past two years and this new USPS recommendation should increase in-home delivery?
The logic for the Load Leveling proposal came from a small market research/test in New Jersey. The test concluded that, since the USPS does not deliver mail on Sundays, these pieces were being carried over into Monday, causing postal carriers to deliver 22.1% of all weekly mail on Monday and only an average of 15.58% Tuesday through Saturday. Furthermore, the original service standards allowed the SCFs 3 delivery days for mail entering Monday through Thursday, but only 2 delivery days for mail entering Friday through Saturday. Adding one day to the service standard allowed the USPS to rebalance Monday deliveries by distributing the mail more evenly over the entire week. The overall redistribution benefits for the USPS are as follows:
- a reduction in mail processing work hours and carrier overtime hours
- earlier completion of carrier routes and return of mail collected on routes
- and, an improvement in downstream operations and service for all mail collected on carrier routes
In March, the PRC approved the Load Leveling Plan which began national roll-out implementation on April 10th and finalized on May 1st. At the latest Mailers Technical Advisory Committee (MTAC) meeting, Megan Brennan, USPS C.O.O., stated that the Load Level Plan is showing positive results. Between April 19th and May 9th the USPS had seen Monday delivery decease by 3.1% to 19%, Tuesday through Friday deliveries increase between .05% – 1% and Saturday deliveries show no change at 15.8%.
Additionally, the USPS is well above service standard goals for Letter mail and close to target for Flat mail. And, most important for the USPS’ financial stability, the change was able to reduce average hours per route and therefore cut carrier overtime hours.
The USPS expects to see Monday through Friday deliveries continue to level out as the individual facilities analyze their data and adjust capacities as needed.
Now, what does this actually mean for mailers’ in-home delivery? In the short term, the delays seem fairly minimal, as the change only affects destination SCF drops that are made after 4:00PM on Thursday to 4:00PM on Saturday. However, because of the level rebalancing, the USPS is able to deliver more mail on time; thus tightening the overall in-home delivery window. Therefore, we will most likely see a reduction with early in-home deliveries, but the overall average in-home delivery should be tighter, making in-home dates easier to anticipate. So, for what seemed to be another storm cloud for the mailing industry to overcome, may actually have a silver lining.