Postal Automation (ZIP + 4) Technology: A Decision Analysis

The US Postal Service recently decided to continue the nine-digit zip code (ZIP + 4) for first class business mailers and to purchase additional capital equipment as part of postal automation. Prior to this decision, the Office of Technology Assessment (OTA) and its contractors performed technical and economic analyses and evaluations of the options available to the US Congress and the Postal Service. Postal automation options involved capital investments of over $350 million and annual maintenance and other costs that could escalate to over $300 million a year. However, potential annual savings of up to $1.5 billion from reduced clerk and carrier costs were possible but highly uncertain. This decision analysis was the basis for OTA's economic evaluations in the face of uncertainty.