1970–2000: Improving Productivity and Service

A growing, productive Postal Service is in the interest of every stakeholder,
whether he or she mails a dozen, or tens of millions, of pieces annually. 
The Blue Ribbon Committee of the Postal Service, 1997¹⁸

Mail volume continued to rise throughout the twentieth century, increasing from about 85 billion pieces in 1970 to nearly 208 billion pieces in 2000. At the same time, the Postal Service's delivery network increased — by 17.5 million addresses in 1990–2000 alone. The Postal Service worked continuously to improve service and control costs, about 80 percent of which were tied to labor. The Postal Service was able to deliver 145 percent more mail in 2000 versus 1970, with only about 22 percent more employees, largely due to automation and mailers' cooperation in producing automation-compatible mail and their participation in worksharing. The Postal Service also worked with the mailing industry to reduce the amount of costly undeliverable-as-addressed mail and to ease mail entry and payment. Special MTAC work groups were formed as needed to study particular areas for improvement (see "MTAC Work Groups").

Automation and Worksharing: In the 1970s, the Postal Service changed its mail processing network to facilitate automated mail processing. "Area mail processing" — funneling non-local mail from small cities and towns to a nearby central mail processing facility — enabled the concentrated deployment of costly automated mail sorting equipment. The Postal Service also developed a separate Bulk Mail Network to speed handling of parcels and bulk third-class mail, which had traditionally been given "non-preferential" treatment in post offices.

The first worksharing discount was introduced in 1976, when mailers received a one-cent discount for presorting First-Class Mail by ZIP Code, which is what the Postal Service saved by nothaving to sort this mail. In the next few years, the Postal Service worked with mailers to increase presorting, making more than a dozen rule changes suggested by mailers to increase their participation. In 1978, second-class bulk mailers became eligible for discounted rates if they presorted periodicals to the 5-digit or carrier route level. In 1979, a discount for third-class mail presorted to the carrier route was introduced.  And in 1981, mailers became eligible for a "5-digit presort" discount if they presorted a minimum amount of third-class mail by ZIP Code, or First-Class Mail by carrier route.¹⁹

As the Postal Service deployed more automated machinery, it offered discounts to mailers who maximized the compatibility of their mail with increasingly sophisticated mail sorting equipment — first by including the ZIP+4 code in addresses, and later by pre-barcoding mail. In 1982, the first computer-driven single-line optical character reader (OCR) was deployed, which could read addresses and print barcodes on envelopes representing the ZIP Code, enabling letters to be automatically sorted to the correct delivery office. In 1983, the Postal Service introduced the ZIP+4 code, which added a hyphen and four digits to the existing five-digit ZIP Code. The four extra digits routed mail to one floor of an office building, one side of a block, or specific post office boxes, enabling letters to be automatically sorted to the correct carrier at the delivery office. In 1983, discounts for First-Class Mail bearing the ZIP+4 code were approved. In 1988, mailers received a discounted rate for third-class mail bearing ZIP+4 codes; both First-Class Mail and third-class mail were given even greater discounts if the mail was pre-barcoded. Mailers who pre-barcoded third-class letters, and sorted their mail to three digits, became eligible for discounts in 1991. Later in the 1990s, discounts were introduced for pre-barcoding flats and parcels.

To help teach mailers how to qualify for discounted "automation" postage rates, the Postal Service increased its educational outreach. "Automation readability specialists" helped mailers design automation-compatible mail, the New York Post Office operated a Mailer Education Center, while "Operation MAIL" helped customers identify problems with their mailings. In the 1990s, the Postal Service operated 25 Postal Business Centers staffed by specialists who helped small- and medium-sized mailers qualify for automation rates. The Postal Service also provided classes in mail preparation at Bulk Mail Entry Units, and in 1997 created a "Mailpiece Quality Control Training Program" for mailers.

Worksharing and automated letter sorting increased postal productivity between 1980 and 1990 — raising the average amount of mail delivered per employee from 159,435 to 197,202 pieces per year — but opportunities for improvement remained. Due to surging mail volume, letter carriers were spending more time in the office sorting mail into delivery order. In 1990, the Postal Service expanded the delivery barcode by two more digits, containing exact address information. This "delivery point barcode" enabled letters to be automatically sorted into delivery sequence, which helped reduce carriers' office time.

Beginning in 1985, postage rates for periodicals were discounted for mail entered into the postal system closer to the delivery office. In 1991, third-class mail became eligible for such "drop ship" discounts. The Postal Service saved money on mail processing and transportation when mailings were entered into the system closer to the point of delivery and passed along these savings to mailers. In addition to lower postage rates, drop shipments gave mailers greater control over the timing of deliveries.

Worksharing activities saved the Postal Service an estimated $15.3 billion in 1999 alone — nearly one quarter of its operating costs.²⁰ By January 2001, mailers received postage discounts ranging from 6 to 63 percent, depending on the amount of mail preparation, handling, and transportation they provided.²¹

Address Quality: The Postal Service also continued to work with mailers to reduce the extra work and costs associated with undeliverable-as-addressed mail. Beginning in 1973, the address line "John Doe (or current occupant)" was tested on bulk third-class catalogs and tabloids; it became a permanent option in 1976. Previously, most undeliverable catalogs were discarded if the addressee had moved.

In 1974, a centralized address correction system was introduced at post offices. Instead of each letter carrier maintaining address files and individually re-addressing letters for customers no longer on their routes, post offices maintained a central file of address corrections, with corrections made by a clerk. Just three years later, this manual process began to be automated. In 1985, the Postal Service introduced Address Change Service (ACS) for periodicals, providing publishers with subscribers' change-of-address information on a magnetic tape on a weekly or monthly basis. This electronic service automated and accelerated corrections. The year it was introduced, the deputy director of corporate distribution for The Reader's Digest noted that ACS "more than halved the number of … wasted and destroyed copies" of its magazine and "minimized the number of issues forwarded."²² Most importantly, he noted that it helped retain customers. ACS expanded to third-class mail in 1989, and to First-Class Mail and fourth-class mail in 1990.

In 1986, the National Change of Address (NCOA) program was launched — its database contained 36 months of permanent change-of-address orders filed with the Postal Service. NCOA operated through licensed vendors who provided address-matching services to mailers, letting them update their mailing lists all at once, before a mailing, versus one correction at a time after the mailing was sent. One mail service provider noted that NCOA provided corrections within two weeks, versus one to eighteen months. This was a win-win for mailers and the Postal Service — mailers got more pieces delivered, and the Postal Service avoided the costs of re-handling undeliverable mail. A marketing manager at Talbots calculated that his firm saved $35,000 just on its first NCOA mailing. Previously, Talbots typically received 60,000 address corrections at $1 each after each mailing. Using NCOA service cost his company $15,000, but it corrected 50,000 addresses in advance — both saving the company money and enabling delivery of the catalog to customers who had moved.

Americans ON THE MOVE
12 percent of Americans change addresses annually.

• 37 million people move each year.
• The average American moves 11 times in a lifetime.
• The Postal Service processed more than 34 million changes of address in 2014.

In 1987, the Postal Service introduced the Coding Accuracy Support System (CASS), designed in cooperation with the mailing industry, to verify the accuracy of ZIP Codes in mailers' address-matching software programs. In 1993, Address Element Correction (AEC) was introduced, which evaluated addresses that could not be resolved by address-matching software. And in 1996, the Postal Service introduced FASTforward, a subset of the NCOA database containing the most recent five months of change-of-address information. Licensees could process mailpieces through FASTforward-equipped optical character readers, which printed correct barcodes and updated address information on mailpieces with outdated addresses on-the-fly during processing.

Ad Hoc Advisory Committees

Postmasters General appointed special advisory committees, consisting of top mailing industry and Postal Service officials, to provide strategic direction and recommendations.

In 1996, Postmaster General Marvin Runyon appointed the "Blue Ribbon Committee" of industry and postal officials to identify opportunities for growth, service improvement, innovation, accountability and productivity. The committee, which included the CEOs of Fingerhut and ADVO, the president of L.L. Bean, a vice president of AT&T, and the Postal Service's Chief Operating Officer, issued its report, "Finding Common Ground," in 1997.

In 2001, Postmaster General William Henderson created the Mailing Industry Task Force, to recommend ways to enhance the value of mail in the increasingly competitive communications marketplace.

Participation in ACS, NCOA, or FASTforwardsatisfied the Postal Service's Move Update standard, which required addresses on presorted and automation rate First-Class Mail to have been updated within six months of a mailing beginning in 1997. In 2008, the Move Update standard also applied to Standard Mail (previously called "third-class mail") and required that addresses be updated within 95 days of mailing. Move Update standards helped reduce the amount of undeliverable-as-addressed mail, most of which was caused by address changes when people moved. Sometimes addresses changed even if people didn't move. In the 1990s, when many rural route addresses changed to street-style addresses as part of the implementation of Emergency 9-1-1 Response systems, the Postal Service developed the Locatable Address Conversion System (LACS) database to provide information on address changes due to 911 conversions and street renamings.

Customer Experience: In 1983, the USPS began referring to second- and third-class mail as "Bulk Business Mail," versus the older term "non-preferential mail." Postmaster General William Bolger explained that the older term was "not at all consistent with the volume, revenue, and important growth represented by Bulk Business Mail and our relationship with its mailers."²³ By 1981, third-class mail had grown to represent more than 30 percent of mail volume, and it continued to grow briskly in the 1980s — increasing by more than 18 percent in 1984 alone.

The Postal Service and the mailing industry worked together to improve postage payment and mail entry processes. Beginning in 1979, mailers no longer needed to lease a postage meter for each post office where they entered mail — instead, one could be used to pay for mail deposited at multiple post offices. In 1988, the Postal Service introduced the Manifest Postage Payment System, which let mailers pay for bulk shipments of variable-weight mail of the same class and category (letter, flat, or parcel) via permit imprint, making it easier for mailers to qualify for bulk rates. Also in 1988, following a successful pilot with the publisher of Newsweek, the Postal Service let publishers pay for postage from a centralized postage account, rather than maintaining separate accounts at every postal facility where they entered mail — in the case of Newsweek, more than 30.²⁴ In 1994, all large mailers were given the ability to pay centrally for mailings entered at multiple sites.

In 1995, the Postal Service introduced the ADVANCE system, which enabled mailers to electronically notify facilities that mail was coming and select a desired delivery date. In 1997, Direct Link was tested, which took some of the paperwork out of bulk mail entry via electronic data transfers. In 1998, the Postal Service tested the Mailing, Evaluation, Readability and Lookup Instrument (MERLIN), which helped speed mail entry by automating several mail acceptance tasks, from checking presort accuracy, to counting pieces, to validating postage. In 1999, PostalOne! was tested, and Entry Schedule for Periodicals (ESP) went online, providing arrival times of mailings at plants. Also in 1999, a new web-based Drop Shipment Appointment System (DSAS) was introduced; it replaced an older electronic system and featured enhanced capabilities suggested by a special MTAC work group.

MTAC Work Groups

Since its creation in 1965, the Mailers' Technical Advisory Committee (MTAC) has provided technical advice and feedback vital to the formation and implementation of many postal innovations. Special MTAC task forces and work groups have been formed as needed to study particular areas for improvement. For example:

► In 1978, the Alternate Delivery Systems task force was created to find ways to streamline postal business practices and regulations, to help keep major customers from switching to private delivery of second-, third-, and special-rate fourth-class mail. By June 1980, the Postal Service had implemented nearly 30 of its 75 suggestions, such as permitting publishers to combine different titles in the same sack to qualify for presort rates and accepting smaller shipments at bulk mail centers.

► In 1988, the Worksharing Project Work Group was formed, which identified 36 costsaving opportunities. Six were implemented by August 1989, including transitioning to a certification system for bulk mailers, providing free audits of customer mailing lists, and extending Address Change Service (ACS) to third-class bulk mail. The Automation Bar Code Group, formed the same year, identified challenges and opportunities in automating the mailstream.

► In 1992, MTAC's Competitive Services Task Force made 183 recommendations for service improvement, including the standardization of bulk mail preparation, regardless of class or rate.

In the early 1970s, mailers began switching to trays and pallets instead of sacks. In 1974, following a successful pilot test with firms like R.R. Donnelly & Son and McCalls, the Postal Service began providing reusable wooden pallets, instead of sacks, to large mailers upon request, to expedite mail handling. One pallet could be handled as a unit and could hold as much mail as 25 to 50 sacks, which reduced handling time and the risk of damage. Beginning in 1986, mailers were allowed to commingle third-class bulk mail prepared at different rate levels (basic, five-digit, and carrier route) on the same pallet.