NETWORK DISTRIBUTION CENTERS

USPS REVAMPS BMC NETWORK TO IMPROVE EFFICIENCIES

Postal Service plans to realign its bulk mail center (BMC) network and transform it into a three-tier system of Network Distribution Centers (NDCs) have begun.

Explaining the new system to business mailers attending the National Postal Forum last week, Senior Vice President of Operations Bill Galligan said Phase I began earlier this month in the Northeast corridor, with the Springfield and Philadelphia BMCs becoming Tier 1 sites, and the New Jersey BMC becoming a Tier 2 site.

Outgoing volume from the Springfield and Philadelphia BMCs is sent directly to the New Jersey BMC for consolidation, processing and dispatch. The concept will be tested for 12 weeks and then evaluated before rolling out Phase II.

Galligan said this will allow USPS to consolidate the processing of originating mail into fewer sites to increase efficiency and reduce transportation costs, while expanding the surface transportation reach for more products.

The new network — when fully implemented — will include:

Eleven Tier 1 NDC facilities which will process and distribute local and destination Standard Mail, periodicals and package services.
Six Tier 2 facilities which will perform all Tier 1 activities, plus distribution of outgoing Standard Mail, periodicals and package services into the network.

Four Tier 3 facilities which will perform all the Tier 1 and Tier 2 functions and act as a consolidation point for less-than-truckload volumes from Tier 2 sites.

With the volume decline and changes in the mail mix, much of the mail the 21 BMCs used to process has gone away. Even before the downturn in the economy, mailers were drop shipping mail directly to the delivery units, bypassing the BMCs entirely.

The Network Distribution Center concept was developed to reduce excess capacity to match workload, consolidate operations, increase transportation efficiency, and reduce costs. This transformation will keep the BMC facilities viable.