Intelligent Barcodes are here!

They may save you $$ and aggravation. Eventually.

If barcodes—introduced about 25 years ago—revolutionized direct mailing by automating delivery, then intelligent barcodes go one step farther.

Postnet barcodes—that familiar “picket fence” on address panels—is really just a machine-readable presentation of the recipient’s address, sans the recipient’s name. The system has been evolving since its introduction.

V2 added 4 more digits after the basic 5-character zipcode to accommodate growing demand for new addresses. V3 added destination point barcodes (two additional machine-readable digits), but it didn’t enhance delivery speed, it didn’t reduce cost and it didn’t offer trackability.

When FedEx and UPS proved that they could track packages via barcodes, the bar was raised even higher. USPS knew it had to develop a comparable program or continue to lose market share to its two chief competitors. So about 10 years ago the USPS started working on the challenge. Voila! The Intelligent Barcode (IMB).

The IMB introduction took years longer than expected, cost much more than projected and did not solve everything it should have (this is a government project, after all!) It is, however, better than any predecessor and it becomes mandatory in November 2009.

The IMB which resembles the old barcode plus a reflected inverted mirror image of itself, increases the amount of data-on-board significantly. As a result it can do more. For instance:

You may get lower postage rates. It’s not firm yet, but the USPS has proposed that IMB-encoded letters and flats pay lower rates than mail using Postnet barcodes. If approved, this is doubtless a limited time offer as postnet phases out in May 2011. Stay tuned.

Get Free Address Correction Service (ACS). Yes, you still have to NCOA your data before you mail, but the new ACS service can catch outliers who made it through NCOA. Get corrected data electronically or the old fashioned “hard copy” way. You pick ‘em. Warning: setting up your account can be daunting.

Track your mail through the postal system with real-time on-line reports. Ever wonder what black hole your mail disappeared into? IMB will help explain the mysterious and find waylaid mail. And no, the mailshop is NOT responsible for your mail once it has been turned over to the USPS.

Which brings up:

USPS accountability. In a “Better Late than Never” move, the USPS is finally—200 years after Ben Franklin started it — putting accountability measures into place for itself. The IMB will help the USPS tell where there are repetitive roadblocks and service slow downs so the USPS can take corrective measures. The USPS’s standard of service states that 90% of domestic standard mail will reach its destination within 10 days. IMB will help prove (or disprove) the case.

Since the long-awaited IMB phase-in period has finally begun, expect to see the new barcodes in your mailbox soon. However, not all the benefits are immediately available to everyone. Thousands of smaller post offices around the country still lack equipment needed to support ACS and mail tracking.

OK, it’s not perfect. It never is. But IMB is a step in the right direction. In the short term it can help keep your data cleaner and it might save you postage. In the longer term it will give you information not currently available about tracking your mail.

All good things take time.

PAUL & PARTNERS

43670 Trade Center Place

Suite 150,

Dulles, VA 20166

Phone: 703.996.0800

Fax: 703.996.0888

1.866.365.2858

www.paulandpartners.net

sales@paulandpartners

I’ll be back. Hasta la vista, Baby.

I shall return. --General Douglas MacArthur

I’ll be back. Hasta la vista, Baby. --The Terminator

The Postal Service will make a comeback. --Dan Blair, Postal Regulatory Commission Chairman

Two of out three ain’t bad. MacArthur did get back to the Philippines within a few years. The terminator has come back several times. The USPS? Well…to be continued.

Hemorrhaging money for a decade, the United States Postal Service has closed plants, pulled most of the once ubiquitous curbside blue boxes because they were so manpower intensive, begged tens of thousands of employees to take early retirement, turned to automation processing equipment (non-unionized, non-salaried, and not prone to take breaks, sick leave or vacations), and has generally taken many drastic measures to stem the bleeding.

It isn’t working.

Last fiscal year the USPS lost a whopping $3B. That in itself was mind boggling until the 2009 FY prediction was announced. As currently predicted, the USPS stands to lose $12B in 2009.

There simply aren’t enough people eligible for early retirement—though recent rumors pegged another 150,000 possible “volunteers”—to help make up the difference.

What’s going on here?

In a nutshell, it’s the economy, stupid.

Much of the loss is attributed to lower mail volumes. In FY 2008, mail volume dropped by 4.5% over FY2007. But during January and February of 2009, volume had further plunged 16% year over year.

By February, First Class mail was down by 12.2% and Standard mail by 21.7%. Standard mail—the longtime moneymaker for the USPS—has been hard hit by the economy. USPS management expects Standard will rebound with the economy.

Since the USPS workforce is hard to shrink further, maybe the USPS can shrink the week instead. Hence the rumors floating around DC of mail deliveries only 5 days a week. A study estimates the USPS could save $2B a year by going to 5-days-a-week. So far Congress has not been receptive, even though the Postal Regulatory Commission says 2/3 of the American public “has no problem” with the proposal.

At present, there is no consensus on which day of the week to axe; whether the switch would be temporary or permanent; whether it would be year-round or seasonal, and whether high-volume holiday periods would be exempted.

Speaking of Congress, there are other rumors flying around DC that the postal service may need a bailout like the automakers. So far these rumors are unsubstantiated, but don’t be surprised. You can’t lose $12B a year too many years in a row. Just ask Chrysler and General Motors.

Anyway, to help spur activity in Standard mail, the USPS announced a “Summer Sale” in May. Unfortunately, the historic reduction in postage doesn’t help most of us. Only the largest 5% of mailers in the US qualify. Bottom line: There’s no “there” there for most of us.

The intelligent mail barcode (IMB) was also promoted as a cost savings venture. If used by enough mailers, it would allow the USPS to track mail and monitor delivery performance like UPS and FedEx. As incentive, the USPS promised a rebate—a whopping 1/10 of one cent—for every packaged mailed using the IMB.

IMB is slow to take off. Today, fewer than 20% of mailers are using it. Why? The steep cost to buy-in may be a deterrent. Duh! It takes a whole lot of mail at 1/10 of one cent to recoup that hefty fee especially in an economy when we’re seeing mail volume fall into the abyss.

Give me a minute. Hmmm. Spend several thousand dollars to see where my mail went? Or keep it in my pocket. Just in case.

Easy call!

Hey Post Office, Get back to me when the economy improves!

Hasta la vista, Baby.

Ummm...Where is my Mail?

The ways of the USPS are mysterious, indeed. It would take a worldclass Puzzlemaster to figure out why they do some of the things they do. Occasionally I really do think we make a bit of progress illuminating a hidden corner of the USPS.

But now I am truly flummoxed.

It all started out innocently enough. One client, an agency, told me that a specific package he has been mailing reliably for his customers for many years is now taking longer to get to its destination. Not a bit longer, either. It’s taking a lot longer.

This is not an idle “Where are my returns?” nervous conversation. This is empirical proof-by-seed evidence.

Last year his seeds showed up at US Monitor (a company the client has hired to track time-in-mail data for his clients) in 10 days; this year it is taking almost a month.

“What’s going on?” he asked me.

I wish I knew. Once we turn his mail over to the postal system and get our proof of delivery paperwork, our control of the mail ends. But clients still ask that unanswerable question, since we were the last people to see it alive, and we try to help.

The post office does not currently have failsafe methods for tracking mail that has gone awry. Sometimes we can send a supervisor to search for the mail. Once or twice, this ground search has found waylaid mail. Usually we hear nothing, but the mail mysteriously appears a couple of days after the search was instituted. Who’s to say what got it moving.

In my gut, I figure it’s because the Post Office is retiring older, more skilled workers, and the newbies aren’t into the swing of things yet. And maybe because there are fewer newbies, they can’t get all the work done in the same timeframe. It’s a guess, but what the hey. Blame the new guy.

It’s possible that because the Post Office is consolidating some of its processing functions to reduce cost, things get out of balance from time to time. For instance, all the flats (ie magazines, 9x12 envelopes, etc) mailed in the DC area are now processed out of one station in Brentwood (made famous by the anthrax attacks that killed 2 Brentwood postal workers in 2001).

It seems reasonable to me that Brentwood could get backed up occasionally, causing other back-ups in the system, much like LaGuardia during a thunderstorm slows down the entire US airline industry. It’s just a theory, but it sounds reasonable.

But in this day of almost univeral barcoding, lots of automation rules (and Merlin, of course), and promises of faster delivery as a result, what’s to explain a 2-week lag?

Someone on my staff decided to put the Post Office to a test. We put seed names into a series of client mailings. “Seed names” are names and addresses we deliberately add to a customer’s list to determine time-in-mail, condition of the piece upon arrival, etc.

As seed names we used our employees. Since our employees live close to the office, it wasn’t exactly a brilliant rocket scientist-level test, but sometimes you have to live with limitations.

For reasons now lost to corporate memory, someone put in two seeds for me at my home address. Since most of the jobs were presorted or First Class, these two identically addressed pieces were created one behind the other in the production queue, and they went to the Post Office the same way: one behind the other.

That much we can agree on.

But here is where it gets weird.

Seed #1 would arrive at my home a day or two after the mailing. OK, that’s good service. No problem there.

But Seed #2 wouldn’t show up for a week or 10 days!

If this lag had happened once or twice I’d say it was an anomaly. But it has happened over and over again. The worst case was a two-week delay between #1 and #2.

The letter had to travel less than 15 miles. Why would it take two days in one instance and two weeks in another? It didn’t make sense.

So I asked an expert on mail delivery: my intrepid carrier, Chris. Sadly Chris said he couldn’t tell me what was up. He assured me that he delivered the mail to me on the day that he got it.

But that told me a great deal, really.

If Chris is telling me the truth (and why shouldn’t he—that was a nice present we gave him at Christmas!) then the problem is upstream of the carrier.

If Seed #1 is whizzing through the system, then Seed #2 is getting hung up somewhere.

Our next foray into this strange and wonderful USPS universe is intelligent barcodes (IMB). Based on UPS and FedEx delivery models, IMB promises to help pinpoint mail as it passes through various processing equipment. Unfortunately, IMB is not quite ready for primetime yet, but it’s coming soon.

With IMB maybe we can determine where the delay is occurring. And if the mail gets delayed at the same spot all the time, then maybe we can help find a cure for what ails the system.

PAUL & PARTNERS DIRECT MARKETING

43670 Trade Center Place, Suite 150, Dulles, VA 20166

Phone: 703.996.0800 Fax: 703.996.0888 1.866.365.2858

www.paulandpartners.net sales@paulandpartners