Postal Service freeing envelope space

The U.S. Postal Service is running out of envelope real estate. Postal bar codes are filling up the limited space on the front of envelopes, said Charles Bravo, USPS' senior vice president for intelligent mail and address quality.

A bigger problem is that the agency's automated bar code sorters are working inefficiently because individual pieces of mail have too many codes.

Under a new policy, USPS officials have asked mailers to switch to a single bar code that will replace the more than 30 bar codes in use throughout the postal system. Mailers' use of the consolidated bar code standard will be voluntary. "We don't want anybody panicking," Bravo said.

A complete transition to the single bar code standard, known as four-state, could take up to 10 years. But USPS officials have started to switch. "We've modified our bar code software, and it will be rolled out in early 2005 into the whole fleet," Bravo said. The postal system uses 10,000 bar code sorters.

The four-state bar code is an international standard that has nothing to do with states. It consists of combinations of long and short bars positioned above and below a horizontal line.

USPS officials and mailers can use the four-state bar code to develop applications such as the Confirm service, which tracks individual first-class and standard mail pieces through the postal system. USPS officials refer to such bar code-enabled tracking services as "intelligent mail."

USPS: The dog that wags the tail

Officials who represent the mailing industry say that switching to four-state bar codes will require mailers to alter their hardware and software. For mailers to make those changes, USPS officials must be persuasive in explaining the benefits, said Leo Raymond, director of postal affairs for the Mailing and Fulfillment Service Association, a national trade group representing large mailers.

But Raymond predicts that mailers will convert to four-state bar codes. "The Postal Service is the dog that wags the tail," he said. "If it says, 'We are moving to this type of technology, and this is what is going to be required,' then that kind of ends the conversation."

Bravo said a recent survey of mailers found that the four-state code caused fewer transition difficulties for mailers than other advanced encoding technologies such as 2-D bar codes.

Officials at Pitney Bowes, which makes postal addressing and presorting software, said they welcome USPS officials' decision to adopt the four-state bar code as a standard. Company officials anticipate using it to offer various mail-management services, said Christopher Tessier, Pitney Bowes' public relations manager.

Postal bar codes have been multiplying for several years. "Any time we initiated a program, we created a bar code associated with that program," Bravo said. USPS officials tried to manage the problem by establishing a Coding Standardization Board, which recommended multiple uses of the same code. But officials quickly realized that they needed an overall strategy for dealing with the growing demand for new mail services and new bar codes.

Compared with the 11-digit numeric Postnet code, which USPS officials use for sorting letters and larger mail pieces, the four-state bar code can encode three times as much information and has superior

error-correction capabilities, Bravo said.

Intelligent mail's value to USPS and to the mailing industry is only beginning to be realized. But Bravo said USPS officials are relying on intelligent mail to improve delivery service and generate new revenues for the agency, whose main source of revenue — first-class mail — is declining.

The four-state bar code is an instance of USPS officials using information technology to enhance the value of mail, which, in turn, attracts more mailers and generates more revenue, Bravo said.

USPS officials also will use the bar codes for capturing information that can help them improve operations. For example, by tracking mail electronically, USPS officials can identify persistent transportation delays between two cities that are causing late mail deliveries.

Bravo said officials at some large mailers, such as financial institutions, understand the advantages of intelligent mail and are using it to save about $1 million a month. For example, they can estimate more accurately the number of people they need to make customer calls if they know when certain mail pieces have been delivered to particular households.

Mailing industry officials say they expect to use intelligent mail for tracking and tracing mail and for targeting mass mailings. "Intelligent mail will allow us to presort the mail to a finer degree more easily than with other technologies," said Robert McLean, executive director of the Mailers Council, a mailing industry association.

What remains to be seen is how much mailers are willing to pay for intelligent mail. "Mailers would like to see the Postal Service invest in this type of technology so mailers can take advantage of it," McLean said. He added, however, that mass mailers are extremely sensitive to price increases. "I'm not sure they're willing to pay a whole lot more per piece to do this," he said.