Business Journal Features Capitol Presort

Tuesday, July 28th, 2009 | Capitol Presort in the News | Comments Off on Business Journal Features Capitol Presort

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Engaging ways: Collaborative approach was exactly the sort of thing the U.S. post office needed

The mail goes through these days partly because the U.S. Postal Service has teamed up with people like Philip Gray and Mark Dennin.

Gray, vice president and general manager, and Dennin, vice president of sales, are two-thirds of the founding management of Capitol Presort, a bulk-mail-sorting company across from the Harrisburg Post Office on Crooked Hill Road. James Lauer, the firm’s chief executive officer, lives in California but spends a week a month at the business

Capitol Presort is a great example of a collaborative approach to business problem-solving and customer service. It shows what can be gained when a government agency like the U.S. Postal Service takes an overall (systems) view of its needs that includes outside partners.

There were “presort mailing” companies before 1990 that sorted bulk mail manually for customers and delivered it to post offices. The National Association of Presort Mailers was incorporated in 1985. But in 1990, as mail volumes kept growing, the Postal Service launched a “worksharing” program with automation discounts for mailers who could assemble and sort big mailings, barcode them and deliver them to post offices ready-to-go. The alternative was to seek massive funding for new facilities and personnel and drive up postal rates.

Worksharing gave rise to a host of regional presorting companies. Gray once worked for the Harrisburg Post Office. He and Dennin were employees of Jetsort in Baltimore when they decided that Harrisburg and Central Pennsylvania presented an opportunity for a new presort company. Today, Gray and Dennin estimate that presort mailers handle 60 percent of the nation’s mail.

Capitol Presort was launched in 2003 with five employees (including the three founders). Sixteen thousand square feet of space was fortuitously available in a block-long warehouse building owned by Unique Limousine at 1900 Crooked Hill Road. Loaded mail carts could practically be rolled across the street to the post office.

Capitol Presort now has 35 employees, three shifts, six leased trucks and vans, a training supervisor, salaries ranging from $9 to $15 an hour, shift differentials and partially paid health benefits.

“Giving back to employees means a lot to me,” Gray says. “As sophisticated as our equipment is, if we don’t have good employees, it doesn’t work.”

Gray, a former Postal Service supervisor, is a bulk-mail impresario. As pre-stamped mail from customers is combined for processing, he sets up runs past Capitol Presort’s three Bell & Howell optical character readers. Those amazing machines verify the addresses from a USPS database of every mailing address in the country and spray bar codes on the envelopes at a rate of 36,000 pieces per hour. The mail whizzes by the readers into 128 ZIP code sorting bins. Second or third passes are necessary for finer sorting.

Packed in trays, the sorted mail is delivered across the street deep into the post office’s incoming mail stream, where little additional handling is required. Gray and Dennin envision processing 160 million to 175 million pieces of mail this year.

Just as Capitol Presort partners with the post office, it works in close association with its customers. The aim is to aggregate as much pre-stamped and addressed mail as possible in the sizes currently eligible for automation discounts – envelopes no larger than six and one-eighth by eleven and a half inches, and up to a quarter-inch thick and three ounces in weight.

Capitol Presort offers three levels of discounts and can reduce a customer’s first-class postage to 29.3 cents, a savings of $97 per 1,000 pieces of mail before a processing fee. Dennin hunts up bulk-mail in a sector from the Philadelphia suburbs to Baltimore. The firm’s customers include banking and financial firms, hospitals and health insurers, colleges, printers and direct-mail companies.

Robert L. Dawson, president and CEO of HealthAmerica and Health Assurance, says Capital Presort’s help in lowering the company’s postal costs resulted in almost $60,000 in savings last year.

Doug Bedell and Phil Landesberg are Central Pennsylvania-based communication and business consultants. Contact them at dougb@paonline.com or phil_landesberg@comcast.net.

Capitol Presort will pick up mail from anyone who averages 1,500 pieces of mail or more a day, as well as from smaller customers. It advises customers on complying with USPS’ voluminous mailing regulations and encourages them to attend meetings of the postal service’s Postal Customer Councils and the National Postal Forum in Arlington, Va.

The USPS worksharing program is an example of how a large government agency can partner with small businesses to accomplish mutual aims. Companies such as Capitol Presort gain an edge by working closely with customers to better meet their needs.

Using a presort company can save businesses money on their mailing costs though, in general, businesses should be careful before outsourcing business services based on cost considerations alone. There may be “hidden costs” and other factors to consider.

With worksharing and automation discounts, however, USPS has developed a system that eases pressure on postal rates, lowers costs for big mailers and provides opportunities for companies like Capitol Presort that excel in assembling big batches of mail, spraying them with bar codes and trundling them over to the post office.

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