The U.S. Postal Service has plans to purchase more than 50 new automatic parcel sorting machines.
The new machines will eliminate most of the manual processing of Standard A and Standard B parcels by requiring only one worker instead of four, said Bill Dowling, vice president of engineering for the postal service.
He said the USPS anticipates a 21% to 28% return on the investment from the reduced labor costs.
The machines are also expected to improve worker safety and increase the number of parcels processed.
Contracts are to expected to be signed by the end of the month. The equipment is expected to be installed at all 21 Bulk Mail Centers beginning in April with installations completed by July 2002.
The postal service declined to reveal the cost or the seller. Dowling, who requested authorization from the postal governors for the purchase of up to 58 machines, said “in order to protect our procurement interests, I’m not disclosing the investment costs of this program.” He added that competitors do not have the same type of equipment yet.
With the threat of lost business from the Internet looming large, the USPS is moving to increase its parcel business, which currently runs a distant third to United Parcel Service and Federal Express.
Richard Porras, vice president of finance, said in a recent interview that “the Internet offers a huge potential for growth in its package delivery business as more and more consumers make purchases online that are delivered through the mail.”
He said the postal service expected to capture 35% of the holiday package delivery business last year, an increase over 1998.
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