Belly Up to Barcodes

Beginning in May, the U.S. Postal Service will start to accept mail pieces bearing the Intelligent Mail Barcode (IMB), the much-talked-about system that’s expected to make it easier for both mailers and the U.S. Postal Service to track and document mailings at each stage of the mailing cycle.

Although currently voluntary, the IMB will be required on all pieces by May 2011.

The IMB is set to replace the USPS’s existing Planet Code and Postnet barcodes on all domestic mail. It is expected to help the Postal Service reduce the number of undeliverable-as-addressed mailing pieces, now estimated at more than 10 billion per year and costing upwards of $1.8 billion annually.

Streamlined mail stream

David Robinson, director of address quality for Pitney Bowes, says the IMB is likely to help mailers and the USPS track pieces through the mail stream in part by electronically documenting the process, which was previously done largely by hand.

“The Intelligent Mail Barcode allows the Postal Service to have much more information about the status of that mail throughout the network,” Robinson notes.

John Steib, direct marketing manager at Ziller Marketing Communications, Lenexa, KS, adds that the IMB should help improve the monitoring and quality of mail service by giving the USPS:

• Greater overall data capacity than existing barcodes, allowing it to identify up to 1 billion pieces per drop.

• More accurate and detailed information about mailings.

Marketers, in turn, will have ready access to information about anticipated delivery dates, where each mail piece is en route to its destination, and which pieces have been rerouted.

The IMB will also give marketers the ability to participate in several USPS programs with a single barcode, and should help them keep closer tabs on their mail and on the USPS.

It will also let the Postal Service do the same thing. It will know if a marketer is using an updated mailing list, whereas in the past, the USPS required written documentation to verify list accuracy, notes Steib.

The Intelligent Mail Barcode processes that information by scanning the piece’s address and determining if it’s correct. If an address is flagged as changed or undeliverable, the information is stored in a USPS database along with the mailer’s ID, allowing the Postal Service to follow up with marketers about their address-correction processing.

How much is it going to cost mailers to implement the IMB?

“That question is going to be decided not quite on a case-by-case basis, but pretty darn close,” says Robinson. “It really depends on what you envision as your long-term strategy in customer communication.”

“If you are a large mailer, the cost could be more than $1 million, depending on how many print streams you have. They’re going to have to go in there and pull out the Postnet data and put in the IMB. Using mainframes and multiple mail streams is going to complicate the heck out of this.”

Long-term savings possible

But he stresses the eventual cost savings: “A mailer who mails 10,000 pieces per month would save nearly $1,000 in postage per month by using the IMB.”

First class mailers sending out the same quantity can expect to save up to $12 million per year, he notes.

According to Robinson, the USPS has not said how much the IMB system will save it in terms of operating expenses.

“But the USPS is clearly on a mission to get us all to move into the Intelligent Mail Barcode. I think this barcode symbology is just the beginning of the ability of the Postal Service to track mail through its network,” he says.

The implementation of the IMB comes at a time when the USPS says it’s facing a possible $6 billion loss this year and mail volume is running 12% below 2008 levels.

Twice so far this year, Postmaster General Jack Potter has appeared before House and Senate panels, asking for new terms for paying the USPS’s annual $5.8 billion obligation for the healthcare costs of retired employees, and requesting a change in federal law that would give the USPS the option of cutting out a delivery day.

While those issues don’t have a direct bearing on IMB implementation, the legislative wrangling could mean less bandwidth for solving potential problems the new system might raise.

“There is a lot of confusion with the entire program for the Intelligent Mail Barcode,” says Robinson. “I think nobody, including the Postal Service, realized how complex this was going to be.”