USPS consolidates stamp distribution operations

By Bill McAllister, Washington Correspondent

Criticized for a poor stamp distribution system that is failing to get new stamps into many post offices as they are issued, the United States Postal Service is making major changes to the system.

In an announcement posted on an internal website March 24, the Postal Service said it is “streamlining its stamp distribution and fulfillment networks.”

The USPS Stamp Services division will take over the system operated by Supply Management that was questioned by the agency’s inspector general in a recent report.

“The changes will help create a world-class distribution network, on par with best fulfillment practices that are currently being used by other large national retail operations,” the announcement said.

It also said those changes would have “no immediate effect on the stamp ordering and fulfillment process.”

Post offices will “continue ordering stamps as usual, until further notice.”

Mark Saunders, a Postal Service spokesman, said the changes should produce annual savings of between $4 million and $5 million.

"Changes in customers’ mailing habits have resulted in less demand for stamps," he said.

 "Consolidations to fewer stamp distribution/fulfillment centers improve efficiencies and allows for expense savings."

Among the changes announced were closing of stamp distribution centers in Atlanta; Binghamton, N.Y.; Kansas City, Mo.; Phoenix, Ariz.; and Portland, Ore. These will take place no later than Sept. 20.

A new consolidated stamp distribution network will begin operations out of the Stamp Fulfillment Services facility in Kansas City, Mo., and a secondary location in Dulles, Va.

This new network is scheduled to launch by Sept. 20.

“Changes in the fulfillment system are needed to create a distribution and fulfillment operation that supports the growing number of direct-to-consumer stamp orders received from online channels, including eBay,” the USPS announcement noted.

The new system “also will improve stamps distribution to more than 34,000 postal retail outlets and partners such as Costco, Wal-Mart and Staples,” the announcement said.

“The changes include greater use of automated equipment to provide order processing 7 days a week and fulfillment and delivery times of 5 days or less,” it said.

“The consolidation also will improve inventory management, reduce destruction of stamps and help keep retail offices fully stocked with a variety of stamps.”

Stamp distribution has been a major concern at the USPS for years. Early in his tenure as Stamp Services executive director, Stephen Kearney, who left the Postal Service last year, announced an effort to improve the flow of stamps from distribution centers into post offices.

But an inspector general’s report issued Nov. 8, 2013, found that major problems continued, with stamps often getting to post offices long after they were issued.

The failure was making it difficult for the USPS to maximize sales of commemoratives and other new issues, the report said.

“Significant improvements are needed to the Postal Service’s internal stamp ordering and fulfillment processes to effectively and efficiently manage stamp stock,” the report concluded.