Problems of the New National Bulk Mail System

The status of the U.S. Postal Service's (USPS) bulk mail system was reviewed through site visits to the four operational bulk mail centers and the center still in the testing stage. The bulk mail system represents the USPS first attempt to mechanize a nationwide mail processing system. The estimated cost to construct and equip the system was $950 million, but the cost rose to $997 million. In addition, completion was delayed a year.

Major reasons for cost increases were: building and mechanization design changes made after contracts were awarded, and late delivery of government-furnished equipment to the contractors. Problems encountered in development of the system included: (1) overestimation of the processing capacity of the system; (2) underestimation of the volume of mail that could not be handled by the system; (3) a high incidence of misdirected mail and parcel damage; and (4) failure to meet delivery standards. It cannot be concluded at this time if the bulk mail system can provide enough savings to justify investment in the system.