Savvy mail-management executives are realizing that the solutions they've been using for years to automate mail sorting to capture presort savings, while good, often leave real room for improvement when it comes to maximizing profits. Mailers are finding new ways to lower postage costs and improve the return on their mailing investments by taking a fresh look at the latest alternatives available today.

Trends in Mail
Despite many organizations' attempts to push customer communications into less expensive electronic channels, consumers still like their physical mail - even when they configure and reconfigure their mail/electronic mix. Yet tough economic times, huge hopes and expectations for electronic communications and aggressive green campaigns have contributed to a significant dip in mail volume. In the US, the USPS introduced several postal rate changes designed to better correlate cost with processing expense. It created the Intelligent Mail barcode (IMBC) to provide new efficiencies and tracking features, and implemented more stringent enforcement of its rules and regulations. Overseas, a trend toward mail privatization also began to alter the landscape for international mailers.

The market conditions and changes in mail volume have put pressure on organizations, challenging them to look for ways to decrease operational and postage costs.

Trends in Mail Sortation

Most mailers have taken somewhat of a "set it and forget it" approach to mail sortation, especially when it comes to gaining presort advantages.

Neither careless nor cavalier in "setting it," their analyses were rigorous. They took into account factors including mail volume and ZIP Code density, mailing patterns, labor and space requirements, speed of delivery and concerns over privacy and control. They considered in-house and external options; weighed the benefits of hardware and software sortation solutions; and considered high-speed sorters, manifesting options and presort services suppliers.

Their decisions were carefully considered; however, once they established a process, focus turned elsewhere and the new solutions became standard operating procedure.

Industry Changes Create Opportunities for Mailers

It's now time to rethink those carefully considered choices. Changes in technology, mail volumes, mail patterns, USPS processes and economic conditions are causing mailers to take a closer look at where additional savings and efficiencies can be found. Also, they are finding ways to improve customer service, even as they reduce costs.

Key areas of opportunity include presort services, technology upgrades and hybrid solutions.

Presort Services: A Collaborative Approach

Many organizations work with an external mail presort services provider, which offers the advantage that mail can be comingled across businesses to achieve critical mass for more five-digit discounts. This is attractive for mailers whose mail volumes aren't sufficient on their own or whose ZIP Code concentrations are low.

As organizations look to reduce expenditures on plant, equipment and labor, presort services offer all the discounts without the on-site expense. As mail services specialists, presort providers have outstanding perspective on working through changes in postal rules, regulations and enforcements, mailing and shipping trends and the latest innovations in technology and mailing solutions.

Presort services providers can also help organizations assess their total mailstream volumes. As a result of the shift in mail volumes, for some mailers, the in-house sortation solutions selected some years ago are no longer the best fit. For example, when mailings are fewer or further between, in-house savings may be negated by the amount of time that labor and equipment sits idle.

While speed was once a concern for businesses that were considering working with an external mail presort services provider, today's presorters are turning mail processing around faster than ever. The top presort services providers now typically do two layers of sorting. Providers will pick-up outgoing mail and process it with specialized equipment that reads the mailing address, validates address accuracy, applies the barcode, then sorts and trays mail according to USPS specifications. Then an organization's mail is commingled with mail from other mailers, which provides all mailers, regardless of size, with a greater depth of sort. This double-sort process expedites delivery by moving mail closer to its end destination while maximizing the amount of mail that benefits from five-digit discounts.

New Technology Introduces Exceptional Efficiency

There are new technology choices for mailers to consider when sorting mail in-house. Today's top sorters are fast and can process as many as 45,000 pieces per hour. Operational throughput enables companies sorting in-house to do so with fewer machines and less labor. Higher throughput also means that more mail can be sorted and out in the same day, which means faster responses, with a particularly valuable cash-flow result for transactional mail. New sorter technology is better equipped to meet stringent USPS regulations. For mailers with lower volumes, new lower speed sorters are available with a smaller footprint. Flats sorters are also helping mailers take advantage of additional savings.

Mail integrity is enhanced on today's sorting equipment too. New software connects sorters and inserters to streamline mailpiece creation and improve quality controls. Adding a scale into the sorting process automatically catches and redirects pieces that are over- or under-weight. These technologies help to ensure that any exceptions are flagged closer to production and can be corrected quickly - saving time, labor and expense. Mail sorted in-house can also be tied into a reprint process for any mail that needs to be rerun.

Hybrid Solutions - The Best of Both Worlds

In a shift, some smart mailers are recognizing they can have the best of both worlds. It's possible to maintain an onsite solution - upgrading hardware and software solutions to maximize operational throughput while adding integrity and security - and use an external presort service where volumes or ZIP Code concentrations fall short of the best discounts.

For these mailers, a portion of the volume is processed and presorted in-house and delivered direct to the USPS. The remaining volumes are presented to a presort service provider where they are comingled to qualify at the five-digit level. Thus, mailers can maintain high levels of control of their mail while maximizing postage savings. The new Full Service IM BC means that whether they deliver direct to the USPS or route mail through a presort service first, it's possible to keep track of the mail every step of the way.

Hybrid mailers like the control they have in presorting in-house and the additional discounts they can reap by pushing residual mail out for presort servicing.

Selecting the Right Sortation Options for Business Needs

What makes the most sense for each organization is a function of many different factors. However, there are enough differences today in mailing trends, presort equipment, software and solutions, that for many organizations a re-evaluation is worth a look.

Key considerations include:

· Mail characteristics and volume
· Mail patterns - frequency, distribution, concentration among zips
· Regulations and consumer protections such as CARD Act, HIPAA and more
· The benefits of mail tracking capabilities
· The cost-benefit of in-house labor and equipment versus an external presort services solution

High-volume mailing is an expensive proposition and postage is the largest contributor to overall mail costs. It pays to re-evaluate the mail process and configure it for optimal postal savings. By working with a provider that offers a hybrid approach to presort mailing, organizations can determine the best fit for efficiency, security and savings for their businesses.

Debbie Pfeiffer is vice president, Pitney Bowes Presort Services.