Developing a Flat Mail Distribution Network

The Postal Service is in the midst of deploying its automated FSS machines in a limited number of sites.   There has been significant criticism of the program given the significant decline in the volume of flat mail.   However, a map contained in a recent presentation by Quad Graphics suggests that the Postal Service's placement of FSS machines makes some sense if the goal is to create a network that is designed to optimize the transportation and handling costs without building a new flats distribution network from production location to delivery location.    

So here are the maps that allowed me to draw this conclusion

Quad Graphics Periodical and Catalog Printing Plants

 Similarities Between the Maps

What is clear from Quad Graphics map of plants is that catalogs and periodicals are printed in a limited number of locations.  The FSS Deployment locations are generally close to the location of the Quad's plants, although they tend to be in large facilities near the population centers that are closest to a Quad Graphics plant.

Completing the End-to-End Analysis

In order to complete a full end-to-end analysis, additional information on production locations and volumes would be needed from plants producing flats in significant volumes from the ten largest printers of catalogs, magazines and other high volume flat-shaped mail.   In addition, the Postal Service would need to add information on First Class single-piece flats and flats produced in smaller volumes but still eligible for discounts that are not produced by the largest printers in the United States. This information could then be analyzed along with transportation costs for moving flats from these plants to Postal Service plants, sorting the flats at origin plants and sorting the flat mail into carrier sequence order in high-volume flat sortation facilities that were optimally located given the location of production facilities and the ultimate destinations, and then transporting this carrier-route sorted flat mail to the delivery units.

This analysis would easily show whether the mailer (e.g. magazine publisher or advertiser) gets a better deal using an optimally designed flat-mail network or one that is designed using existing facilities that minimizes both capital spending and disruptions in where  Postal Service employees work.  This analysis could also show whether mailers do better with the current discount structure and the Postal Service's flats distribution network that uses a limited amount of automation or one with fewer drop-shipment locations but with a streamlined and more automated network.

The analysis could also be used to determine if the Postal Service could make flat-shaped mail more attractive by reducing the time it takes to move mail from printer to delivery.  If as I suspect, this streamlined network would reduce the time associated with moving mail, then mailers may find new uses for flat-shaped mail that require quicker concept to delivery time.

Unfortunately, given the financial problems of the Postal Service, this analysis would be little more than an academic exercise.   There is no money to build optimally located plants or handle the transition costs associated with moving employees into new plants, so the Postal Service must use facilities that have extra capacity even if they increase the total delivered cost of delivering flat-shaped mail.  

The fact that it is an academic exercise does not mean conducting the analysis, and a similar analysis for handling letter mail is not worthwhile.   In fact these analyses would be a critical step in understanding the full capital needs of the Postal Service and understanding that the financial problems of the Postal Service go far beyond a problem of not having sufficient cash to meet its current obligations.