Introduction

The United Stated Postal Service has been pursuing initiatives to help it streamline its acceptance, induction, and verification of business mailings. This ambitious effort includes converting manual methods for mail quality, preparation, and postage payment accuracy to an automated environment. The Mailer Scorecard leverages information from the Intelligent Mail Barcode and electronic documentation (eDoc) supplied by mailers. The Postal Service sees the scorecard as a tool for customers (mailers and Mail Service Providers) to access their mail quality in a dashboard view over a calendar month. The results displayed determine if additional postage should be assessed based on established thresholds. According to the USPS, if the percentage of error is below the established threshold or the additional postage due is less than $50, then no additional postage is assessed.

The Mailer Scorecard and its implications on the industry are frequent topics for the Association for Postal Commerce (PostCom) and its members who are heavily involved in the Mailers Technical Advisory Committee (MTAC), where most of these discussions between the Postal Service and its customers are held. Every sector of the postal supply chain could be affected once the Postal Service begins collecting its assessments.

PostCom thought it was necessary to do a deep dive for the industry on the far-reaching implications and potential ramifications of after-the-fact postage assessments. We asked two of our members who are subject matter experts, Paula Stoskopf from Fairrington and Bob Rosser from IWCO Direct, to share their insights and experience with the program so far.

JL –IWCO Direct was an early adopter of Seamless Acceptance (SA). What motivated your company to pursue this authorization from the USPS?

BR – Our company has been involved with Full Service IMb mailings and support for our client base since 2008. We were leveraging the unique barcodes on pallets, trays, and pieces internally as an additional means of control in managing our mailing operations. As a 24/7 production environment, we saw Seamless as a way to maximize our production capacity and schedules. The USPS only has to staff DMU clerks to be on site to take random manual data collection samples from mailings with a handheld scanner as well as data validation for what was auto-finalized the day before. The rest of the mailing verification process happens automatically from Mail Processing Equipment (MPE) scans of our IMbs compared against the rates we claimed in the eDoc we uploaded to PostalOne! Our mail acceptance team has been auto-finalizing statements via SA since May 2014 and love the process when everything works as designed.

JL – Thanks Bob. Paula, Fairrington has been involved in the logistics end of this development, supporting your customers and their transition to eInduction and Seamless Acceptance. I am certain that your company’s experience has been different from Bob’s, but how so?

PS – Fairrington supports the drop ship consolidation transportation and postage optimization needs of our customers as well as co-mail and co-palletization services. As members of the supply chain, our challenge has been that we really don’t control much of the data that goes into the eDoc for the drop ship services. Data distribution and access to important supply chain members like our company is critical to troubleshooting eInduction or drop ship entry errors for our customers. In drop ship scenarios, the consolidator does not always have access to all the data to diagnose data entry or systemic issues. It usually involves efforts from one of our customers calling us up with an issue and then digging in to available data to assist them with the troubleshooting process. As the Postal Service brought on the systems and upgraded scanners, we found that most of the questions that were raised were caused by USPS issues like scanners registered to a different USPS facility ID.

JL-Do you think the industry and USPS will figure this out?

PS – Yes, I think they are gaining on it. There is a focus on testing and data accuracy. I think there will still be some bumps in the road, but I am optimistic. I know that in the MTAC User Group 4, IMb Tracing and Informed Visibility, there have been discussions with the mailing industry that will allow easier data distribution and access rights to the data for the entire supply chain. The hope is that these requirements will get built in to the Informed Visibility (IV) platform, which has many releases of functionality scheduled for 2016.

I am also encouraged [by] the commitment [that] the Postal Service’s Operations Management team has placed on improving service performance with the use of the data. IMb Full Service mailings with unique IMb barcodes and mailing details electronically communicated can be a very powerful diagnostic tool when both Postal Service and industry look at the presence and absence of data in the same manner. The accuracy of the data will continue to improve to the point for industry where it can be very actionable.

JL – That is encouraging, Paula. Bob, what impacts do you see for the Industry as automated postage assessments for Full Service are still set to commence in July 2016?

BR – Hopefully, customers have been looking at their Scorecards for some time now. The easiest things to diagnose on the Full Service side are the systemic problems, which can bring out the best detective in all of us. IWCO looked at the error, identified what job and package it mailed with, and then started asking the questions related to workflow, [such as] IMb barcode content and how each of those data elements was sourced. We then looked for patterns to see if the SOP was not followed or if input data was entered incorrectly.

Assuming that a business customer has been doing what IMb Full Service requirements dictate, I really don’t foresee that there will be many surprised about their mail quality. If you are producing quality mailings, then you won’t expect to see any postage assessments. I expect if there are any data discrepancies remaining that the mailers should be able to identify these long before the effective date.

There’s no doubt that it will be a wake-up call for customers of all sizes, whether they are Mail Service Providers or Mail Owners, to revisit their Scorecards and ensure that they aren’t at risk for any postage assessments. Things happen. Software needs to be maintained.

Other programs such as Move Update, eInduction, and Seamless Acceptance will require more testing and information sharing along the supply chain. More validation of the information on the Scorecard and error details is required on these programs before mailers will feel comfortable. There are some issues remaining like Undocumented for Seamless mailers that still need to be worked out, with the process documented for mailers who do not have the ability to put 100% of their IMb mail volume into eDoc.

JL – So everyone needs to be looking at what is available now. Paula, I guess I am curious as to what transformation you see taking place on rates, work share, and promotions in the future with all of this trend-based verification?

PS – I can easily see that the data now exists to do business process engineering on the whole method of how USPS assigns attributable costs, evaluates cost coverage, and establishes rates. Better information supplied by Full Service IMb could allow more innovation. Work share may become even more meaningful and relevant as cost models are updated to reflect real-time data, which will demonstrate the real value generated to the USPS operations.

JL – How about you, Bob? What do you see happening?

BR – In addition to what Paula shared, I can easily see that at some future date, the USPS will be able to be more innovative with promotions and things like NSAs. With more transparent and real-time costing data, they can evaluate the contribution of any single mailer and the mail products they provide the USPS. We are already seeing early signs of this with how promotions in 2016 are using A/B testing. They are looking for future connectivity in the eDoc between Test and Control packages so that customers can be incentivized for a portion of their control packages testing against a campaign that qualifies for the USPS promotion.

Mail Processing Equipment (MPE) data, unique IMb barcoded pieces, and eDoc from mailers combined with the fully operational Informed Visibility platform that the USPS is building has the potential to be game changing. The USPS infrastructure today is built and staffed around historical information. In many cases, they have no idea what’s coming until it is actually on their work room floor. Predictive workloads may allow smarter staffing and capacity planning, since computers can crunch the data. This will not only help with operational efficiency but should also improve service predictability. I could easily see Mail Owners getting charged for just the services they use in the form of handlings, as the data would be there to support that in the future.

JL – But how can the entire industry benefit if the Postal Service is able to better identify its costs and then price appropriately?

BR –Here is how I look at it. The Postal Service will have the data and justifications to reward, through prices, customers that produce mailings that fall below the average cost, as well as reduce USPS operational costs. Best practices will begin to rise out of the ashes of average price per piece as uniform pricing is replaced with NSAs or market segment pricing for those that create efficient mailings. The Postal Service will be better able to drive behavior that either drives down cost or keeps it from growing with proper pricing.

What separates the efficient customer from the less-efficient customer? Transition.

There needs to be enough development runway and planning time for business customers to make the necessary developments and investments. They need to know that the change will not be effective until a distant date, which could be as far off as 12-18 months. In addition, they need to understand the changes, as well as the risk/reward to their respective organizations in terms of preparation and pricing. With enough runway and notice, those that are late or have not adopted such technologies can begin.

I am optimistic that this type of approach could lead to lowest combined costs, if the pricing incentives are sufficient to drive the behavior that USPS wants to see.

JL - What other changes in the relationship do you see happening between the various members of the postal supply chain with all of these changes?

PS – With eInduction and IV in place, there will certainly be more scrutiny by mail owners on quality, especially after automated postage assessments hit. The USPS is relying on accurate data as a baseline assumption for all of the Mailers Scorecard, and automated postage assessment process to work. I can really see that Mail Owners will be carefully monitoring an MSP’s quality record and any impact that may result in additional charges. I can also see more education required when errors do happen due to human error so that the postage assessment is borne by the correct party. With enough lead time, I believe these incidents to be few and far between as long as data and process validation can occur. The key to move forward smoothly is to implement these changes with proactive and clear communication between the MSP and their customers.

Jessica Lowrance is President Elect, Association for Postal Commerce (POSTCOM). She can be reached at jlowrance@postcom.org.