Review of Zip coding program;

              cI$eview
qf Zip Coding
Program
by James C. Hammerton
THE CHALLENGE TO PUT ZIP IN BUSINESS MAIL
-
The past two years have been hectic ones for users
of direct mail, or business mail, as it is often called. A
five-digit ZIP code is now required on all mail after Jan- I
uary 1, 1967 so that it qualifies for Bulk Third-Class
rates. With the exception of relatively few extensions
granted in "hardship" cases, the alternative is paying
the single piece third-class rate of 4 cents, a cent more
than the current bulk rate. For businesses which mail
millions of pieces of mail annually, this is enough of an
additional expense to make uneconomical many mail­ings
which now contribute to the mailer's profits.
This article reviews the reasons for the introduction
of ZIP coding, the format of the code, the current status
of regulations, and the impact of these on business. It
describes the two problems of principal concern to
management services personnel. These are the addition
of ZIP codes to a list of names and addresses and the
changes in resulting operational requirements.
The Post Office Problem and the Proposed Solution
The Post Office Department handled 74 billion pieces
of mail in 1965 and anticipates handling 84 billion pieces
a year by 1970. The volume for 1964 was 72 billion pieces
and this broke down into 40 billion pieces, or 55%, of
first-class mail; 9 billion, or 13%, of second-class (maga­zines);
20 billion, or 28%, of third-class (circulars, ad­vertising,
merchandise weighing less than 15 ounces);
and 3 billion, or 4%, of fourth-class (parcel post). Of
the 40 billion pieces of first-class mail, it has been
estimated that 55-65% is business mail of some sort.
In recent years the Post Office has been carrying the
mails at an annual deficit of about $400,000.
To meet rising labor costs, the Post Office Department
has instituted a program designed to reduce the number
of times a piece of mail is handled and to increase the
productivity of mail sorters by automating part of their
work. The success of this program depends on the adop­tion
of ZIP coding and its regulations by all second and
third-class mail users.
As a program, ZIP code is remarkable for its size in
terms, say, of the total conversion cost to business and
to the Post Office Department, rather than for its origin­ality.
As a system, it is ante-dated by a four-digit code
introduced successfully into West Germany in 1962. An
idea of the size of the program can be obtained from
the figures for mail volume quoted above. If in effect
18 THE QUARTERLY