NAPLBizBuzz

IDEAlliance's Culminating Day

LAS VEGAS, APRIL 9

The culminating day for Print Distribution ’08 began with R.R. Donnelley’s Mike Winn reminding participants that a mere twenty years ago our business consisted of clients throwing names and repro material over the fence to the printer, and printers doing their thing before throwing mail over the loading dock to the freight carriers and USPS. In an extended supply chain world, the prepress-premedia functions are increasingly collaborative, continuous and seamless between parties to the job. The clear direction for printer-mail service providers is to partner with the distribution sector in like manner, shortening cycle times, minimizing “touches” and – thanks to standards and electronic files-documentation sharing – eliminating errors and process variation.

The reality, of course is that when the partner (printer output is their input) is the USPS, we are talking about a many-headed, self- and legislated-regulated enterprise that exhibits best intentions and nevertheless represents a collaborative challenge.

On the matter of names and delivery addresses, MTAC representative Chris Lien of BCC Software (Böwe Bell + Howell) shared the view that when it comes to the lists mailers handle on behalf of clients, the goal of Complete, Correct and Current is easier said than done.

The address standardization, validation and update tools available are being augmented by a B2B SuiteLink product (assigning sub address elements to partial business addresses). The Delivery Point Validation (DPV) toolkit is being enhanced with a Vacant address check. All of the tools are intended to protect the mail owner and the USPS against waste: Undeliverable As Addressed (UAA).

Developments to watch:

1. Effective 5/12/2008 selected postal statements will have an (informational? enforceable?) checkbox certifying the mailing (no longer the individual names which may have been rented from multiple list owners) has a defined delivery address update methodology
2. Effective 11/23/2008 all First and Standard mail will have to certify the names have been Move Updated within 95 days of the acceptance into the USPS.
3. The USPS is taking informal soundings throughout the industry to gauge whether mailers are OK eliminating CASS certification as a predicate to mailing, while – note – maintaining the ability to sanction mailings (and mail preparers) that manifest a statistically unacceptable incidence of UAA.

On this latter point, the attendee consensus was that “we love our clients but eliminating a CASS certification requirement puts the mail services provider in a Liability situation.” The MTAC reps will be encouraged to keep CASS requirements in place, while at the same time educating our mail owner clients as to the value of doing their own list hygiene up front and (now) frequently. Make no mistake, the USPS is keeping score.

So we’re paying attention,

4. Effective 8/1/2009 there will be an all new CASS specification, whose detailed requirements will be provided the software companies in May of that year, right on top of the next Rate Adjustment

Final segment of the conference was intended to catalog the most pressing or vexing areas of industry engagement with the distribution priorities of today. They included:

• Final specification and rule making behind Intelligent Mail Barcode (IMB), the services which are attached to it, the Flat Sequencing System requirements that pertain. All were in agreement that an automation-efficiency standard with years of implications should not be jammed through an official Comment period ending May 2, so that the rules effective date will dovetail nicely with the Postal Forum on May 18. Both IDEAlliance and PostCom will go on record this week with a “take your time and get it right” recommendation.
• Problematic, non automatic application process for USPS programs, the newest of which (like the optional IMB) regional postal authorities are not fully briefed to advise postal clients on.
• Wooden pallets
• Other emerging requirements for mail preparation that may require industry-wide fact finding and action. This may result in a request for NAPL participation.
• The CASS certification “trial balloon” (see above) that should be taken seriously
• Related to that, a sense of unease that working within the letter of the December 2006 law, the USPS will be looking for a set of rulings, regulations or loopholes either to push activities off their books and onto the mail preparers’ “To Do” list or – via fiat – to promulgate a situation (see wooden pallets above) that may in the short term help them to achieve their mandated CPI Cap costs-rates adjustment commitments
• Do Not Mail legislation. More industry-wide activity and education needed.

Bob Whitton

Listening in IDEAlliance Print Distribution ‘08 Keynotes, Panel Discussions

LAS VEGAS, APRIL 8

Two USPS keynoters headlined the conference on Tuesday. Thomas G. Day, SVP for Intelligent Mail and Address Quality. Day clarified that internal measurable USPS standards will be in place across the board by the beginning of FY ’09, or October 1. He announced one more Federal Register round of comments on measurement, with comments complete in short order and final announcement by mid May. Mr. Day reiterated the elusive “carrot” for implementing Full Service Intelligent Mail Barcode (IMB) by the optional start date of October ’08: Address Correction Service (ACS) at no charge, likewise “Start the Clock” and quality feedback (the measurements again).

In the second keynote, USPS SVP of Operations William P. Galligan reminded the attendees that the IMB in tandem with Flat Sequencing System (FSS) machines deployment – 100 machines in phase I – is all about eliminating carrier casing of mail and organizing street-sidewalk delivery tours of ~ 7 hours a day. He’s also supporting internal Cap Ex proposals for any solution that eliminates other machine “touches” of mail, such as traditional OCR scanning of catalogs and magazines to undo the presorts that printers have already done and reroute the printed matter to the appropriate destination postal units. Galligan predicted the IMB implementation will lead to further sortation and pallet makeup, so as to tee up multiple zones and zip codes to the new FSS equipment. And he also foreshadowed the revision of the USPS Logistics network, but amplifying as outsourcing cross-country movement of BMC-to-BMC mail, which today can be suboptimal if only the USPS is the shipper of record. What happens when Service Standards bump up against Freight cost and efficiency.

In related panel discussions on the FSS equipment trials in Northern VA, the USPS project head Rosa Fulton and her colleague Sharon Daniel identified another anticipated engineering innovation, namely the ability for a machine to break open bundles and ingest automatically into the FSS. No more shrinkwrapped, compensated flats bundles, rather one or two straps (back to the past) instead. The address orientation and imaging discussion spilled over to breakout groups. Suffice to say the magazine renewal Attached Mail envelope and “Last Copy Expire” marketers are going to be strongly disappointed by the address placement requirements of the new efficiencies the letter carrier workplace. See the April 9 Federal Register for details. Mike Winn of R.R. Donnelley described the great progress that multiple printers and inkjet equipment manufacturers have made with the new IMB, while acknowledging that practical implementation across the entire print-mail platform in the US is necessarily dicey. Leeway and tolerances are still needed on inkjet and address panel specs, so that a large majority of the industry can replicate what R.R. Donnelley and other participating printers have so far been able to demonstrate.

All of the postal representatives agreed the likely earliest rate filing will be in February for an implementation date of May 29, 2009. This was judged by all the software vendors and publishers-catalogers-consultants-printers alike as insufficient, and various pitches were made for advance “signaling” the rate differentials between Full Service IMB, Basic IMB, Postnet (still optional for a year), noncompliance, etc., etc.   

Pritha Mehra of USPS defined new working specs for code 128 barcoding of trays, plastic sacks, pallets and other “aggregate” containers for mailers who participate in IMB. She promised in a matter of weeks new guidelines for eDocumentation and Scheduling, another requirement for participating in IMB Full Service. And she offered tantalizing “soft benefits” for marketers who choose to use the IMB as a turn-around document with business-meaningful coding for the address-specific unique IDs. Some of this was alluded to by a panel of users, especially Chuck Howard of Harte-Hanks. For all intents and purposes the Optional Endorsement Lines (OEL) used by catalogers and magazine publishers will remain alpha-numeric characters below the new 4-state barcode, as a safety net.

An excellent Transportation and Logistics panel gave further evidence and weight to the diesel/jet fuel price-driver shortage-TSA-Department of Transportation-EPA-fleet reduction-truck capacity outlook. Attendees were promised a truck freight tightening, when the economy and housing come back (in part because laid off construction workers have been driving!). The USPS promised to revisit the plastic vs. wood pallets discussion, as it has led to pushback both internally and in the user marketplace. And further fragmentation of the postal Network (promised this Spring) may – word of caution – put even more pressure on truckload efficiencies, stop-offs, and the like.

Bob Whitton

Second Day Report

Daniel G. Blair, administration-appointed chairman of the Postal Regulatory Commission detailed how his 55-person staff has moved mountains in reorganizing the former PRC following congressional mandates in the Postal Accountability and Enhancement Act of (late) 2006. In short order they made progress on an impressive set of goals and milestones which can be found in the all new www.prc.gov. He foreshadowed Spring ’08 changes by USPS in its Network of facilities (BMCs, SCFs and the like), a sensitive review of the subsidy or cost underpinning for periodicals (founding fathers, do you hear us?), and the introduction of new Flat Sequencing System (FSS) machines capable of doing catalog-magazine sortation for mail carriers at the rate of 250,000+ pieces per machine per day.

A panel which followed danced around the likelihood of rate incentives (and counterbalancing rate dis-incentives) which follow the introduction and combination of FSS, Intelligent Mail Barcode (IMB), FAST reservations and eDocumentation. There is a chicken and egg relationship between the adoption of new best practices and the perceived value to do so. This is probably not a Field of Dreams package – in other words, unless rates are set to a perceived advantage, only the philanthropic and beta testers will come. So far no indication of the kind of guidance mailers will get, or the lead time they’ll have prior to a Fall ’08 implementation.

The morning panel on Retail distribution included a mini tutorial on trucking fuel rate surcharges (which do you want – low base rate and high surcharges or higher base rate and low surcharges?). Driver shortages in Canada and the US, coupled with the cost of border delays (post 9/11) between the two largest trading partners. Transportation Safety Administration expansion of surveillance beyond airline passengers to broader freight screening. And a set of magazine newsstand trends that make the aphorism (“Is Flat the New Up?”) particularly appropriate.

Bob Costello, VP and Chief Economist for the American Trucking Association gave a lucid discussion of freight supply and demand in relation to the overall economy. In his and others’ view the congressional rebate stimulus will have a desired effect in the second half of ’08 but further fleet reductions, another round of EPA emissions standards for engines, the reverse relationship of diesel to gasoline prices, fuel costs – abetted by underlying weakness of the dollar and speculation in commodities – will contribute long term to a freight rebound and the consequent effect on the transportation of printed matter.

Ben Cooper, NAPL and DMA’s point man on mail-related legislative affairs described the coalition building which will keep pressure on to defeat state initiatives on Do Not Mail. Though we can’t declare victory on DNM, right around the corner is a national harmonization of sales tax practices including beating down a tax on postage, and also a set of late ’08 early ’09 activities related to Global Warming and in part directed at US paper manufacture and recycling.

Concurrent Breakout Sessions probed retail distribution and sale trends in depth, drilled down on the new postal ratemaking process, and pondered anew how the USPS and industry can articulate measurable and accountable Service Standards, by mail subclass, origin entered or re-entry, with enough completeness and granularity to allow rapid diagnosis, feedback and improvement.

-- Bob Whitton, R&E Council of NAPL

Biggest News From IDEAlliance Print Distribution ‘08

Las Vegas

USPS is getting out of plastic pallets for bulk printed matter. Printers are restless as this cost-cutting “improvement” is actually a step backward to the need for forklifts at all USPS facilities, the frailty and ultimate cost of wood, its extra weight (~ 40 pounds) which increases everybody’s carbon footprint with over the road freight. Strenuous pushback is needed

Mail Piece Design. Good tips on USPS testing of new tabbing, item thickness, emerging return address, address quality and legibility, location (for Intelligent Mail Barcode, IMB, catalogs and publications may have to change.

Ominously, one direct mail client vows to invest a dollar in electronic delivery for every dollar they now invest in postal compliance and qualification. In the interest of mitigating now-annual costs, the rules and regulations get more arcane and implementation more technically challenging.

Take IMB for example. Inkjet scan standards for pallet-container flags have to change again for Postal employees to be able to scan successfully from their forklift equipment. Addressed IMC on pieces still being ironed out by a joint equipment manufacturer-industry-USPS task force so that catalogs and pubs especially can meet the IMC address specifications consistently. IMB takes effect May 2009 across several classes of mail. Postnet fades out a year later. The companion requirements for address hygiene and customer mail unique IDs take hold around the same time or sooner, like Move Update frequency for customer lists (November this year).

The major printers and 3PLs are revising their drop ship strategies every year, with every rate adjustment. The rate filings come fast enough that the industry is hard pressed to do the software revisions and equipment investments fast enough to get their arms around the ROIs and at the same time minimize their customers’ postal costs by the effective dates. Worrisome complexity department: USPS is doing some fancy footwork with local, little-documented annexes for delivery of classes and types of mail, creating a multiplicity of physical addresses for what logically can be known as “Atlanta SCF.”

Emergence of paperless documentation and payment: Outlined for us at last year’s Santa Barbara Top Management Conference, the beat goes on. With adoption of expanded Mail.dat data standards for postal mail, the Form 8125 and most of the traditional first, Standard, Periodical and Parcel mail payment forms will vanish, referenced only by a line on the truckers Bill of Lading plus all of the new advance ship notices that seamless acceptance mailers will deploy. The rates (incentives) will come to favor significantly mailers and service providers who adopt. Of course an industry of assisters like Pitney Bowes, the list houses and third party logistics providers will be there to help the medium sized printer.

My sense: Mail.dat will shortly be replaced with Mail.xml standards for interoperability between customers, mailers and USPS. The legacy systems will be put to a merciful death. 

-- Bob Whitton, R&E Council of NAPL