E-commerce, Parcel Delivery Help Postage One Continue to Grow

By Paul Parcellin

Last update: Monday, November 7th, 2016

For Postage One, it’s all about saving money when you send mail and packages.

A 47-cent piece of mail may cost a Postage One customer 45 or 43 cents depending on volume, and that can add up to thousands of dollars in savings over the course of a year.

That’s the backbone of the business, which is officially known as a “presort bureau.”

Carriers pick up mail and packages and Postage One sorts it and combines it for ease of delivery by the U.S. Postal Service. They save the post office time, and in turn the post office offers them a price break, which Postage One passes on to its clients.

Machine operator Margarita Martinez works at the automated letter sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal
Machine operator Margarita Martinez works at the automated letter sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal

“We go around to many different businesses, from San Luis Obispo to Los Angeles, out to Bakersfield,” said Postage One President Jeff DeVico.

But that’s just the beginning of what sets their service apart from standard mail delivery.

When mail arrives at Postage One’s plant, each piece is put in a 100-foot-long machine that scans each piece of mail, takes a picture of it, uses optical character recognition technology to read the address, and prints a bar code on each letter and parcel before it is sorted and sent on its way.

The bar code is critical to quick delivery services because it makes letters and parcels run through the postal system faster.

“We combine mail going to the same zip codes or group of zip codes,” said DeVico. “This way the post office is doing less handling, and for doing that the post office pays us in the form of discounted postage.”

Machine operators Jackie Benito, left, and Ana Martinez work at the automated parcel sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal
Machine operators Jackie Benito, left, and Ana Martinez work at the automated parcel sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal

Considered a small business, Postage One has fewer than 50 employees. Of their 150 or so customers, which include businesses and government agencies, about 120 send mail every day.

While the overall volume of letters handled by the post office keeps diminishing, Postage One’s business has bucked that trend by continuing to expand. That’s due in large part to the fact that they continue to add new customers. DeVico said that eventually the volume of letters that Postage One handles will stop growing, but there’s a strategy to deal with that.

About eight years ago the company began picking up parcels, which opened new doors.

They handle parcels the same way that mail gets handled – pickup, add a bar code and sort – and DeVico says that he expects the business will become more focused on parcel delivery as the volume of letters decreases.

In E-commerce

In recent times, the company has also begun working with the growing e-commerce sector.

“That’s starting to explode for us,” he said. “Because of Amazon and eBay and other large storefronts like that, the requirement to fulfill shipping for those customers is tremendous.”

Postage One President and CEO Jeff DeVico overlooks the 35,000 square foot production plant in Valencia. Dan Watson/The Signal
Postage One President and CEO Jeff DeVico overlooks the 35,000 square foot production plant in Valencia. Dan Watson/The Signal

“When you get an order you have to turn it around within 24 hours and get it in the mail stream. And if it takes a while, say if you send it standard post, your reputation’s going to be hit, even though you have no control over what the post office does.”

But among the factors that set the company’s e-commerce service apart is the rapid assignment of tracking numbers.

Customers want the tracking number right away. But, the traditional method of handling the mail, even using optical character recognition imaging, took too long.

“We couldn’t get a tracking number back to the customer in less than 24 hours,” said DeVico.

His company developed technology that works with many software packages that shippers use that allows them to assign a USPS tracking number when they fulfill an order

The shippers send an electronic report that lists all of the packages that they’re giving to Postage One. Once the packages are sorted, and Postage One sends the list to the Post office.

“What’s nice is that the customer that ordered the piece has a live tracking number almost immediately,” said DeVico.

While the move toward ecommerce and parcel deliver has been moving at a brisk pace, the company itself has been expanding.

DeVico noted that Postage One has become a top-10 mailer for the postal service. That means that the amount of money the company pays the Post office each year puts it in the top 10 percent of all customers.

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E-commerce, Parcel Delivery Help Postage One Continue to Grow

Postage One President and CEO Jeff DeVico at the production plant in Valencia. Dan Watson/The Signal

For Postage One, it’s all about saving money when you send mail and packages.

A 47-cent piece of mail may cost a Postage One customer 45 or 43 cents depending on volume, and that can add up to thousands of dollars in savings over the course of a year.

That’s the backbone of the business, which is officially known as a “presort bureau.”

Carriers pick up mail and packages and Postage One sorts it and combines it for ease of delivery by the U.S. Postal Service. They save the post office time, and in turn the post office offers them a price break, which Postage One passes on to its clients.

Machine operator Margarita Martinez works at the automated letter sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal
Machine operator Margarita Martinez works at the automated letter sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal

“We go around to many different businesses, from San Luis Obispo to Los Angeles, out to Bakersfield,” said Postage One President Jeff DeVico.

But that’s just the beginning of what sets their service apart from standard mail delivery.

When mail arrives at Postage One’s plant, each piece is put in a 100-foot-long machine that scans each piece of mail, takes a picture of it, uses optical character recognition technology to read the address, and prints a bar code on each letter and parcel before it is sorted and sent on its way.

The bar code is critical to quick delivery services because it makes letters and parcels run through the postal system faster.

“We combine mail going to the same zip codes or group of zip codes,” said DeVico. “This way the post office is doing less handling, and for doing that the post office pays us in the form of discounted postage.”

Machine operators Jackie Benito, left, and Ana Martinez work at the automated parcel sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal
Machine operators Jackie Benito, left, and Ana Martinez work at the automated parcel sorter in the 35,000 square foot Postage One production plant in Valencia. Dan Watson/The Signal

Considered a small business, Postage One has fewer than 50 employees. Of their 150 or so customers, which include businesses and government agencies, about 120 send mail every day.

While the overall volume of letters handled by the post office keeps diminishing, Postage One’s business has bucked that trend by continuing to expand. That’s due in large part to the fact that they continue to add new customers. DeVico said that eventually the volume of letters that Postage One handles will stop growing, but there’s a strategy to deal with that.

About eight years ago the company began picking up parcels, which opened new doors.

They handle parcels the same way that mail gets handled – pickup, add a bar code and sort – and DeVico says that he expects the business will become more focused on parcel delivery as the volume of letters decreases.

In E-commerce

In recent times, the company has also begun working with the growing e-commerce sector.

“That’s starting to explode for us,” he said. “Because of Amazon and eBay and other large storefronts like that, the requirement to fulfill shipping for those customers is tremendous.”

Postage One President and CEO Jeff DeVico overlooks the 35,000 square foot production plant in Valencia. Dan Watson/The Signal
Postage One President and CEO Jeff DeVico overlooks the 35,000 square foot production plant in Valencia. Dan Watson/The Signal

“When you get an order you have to turn it around within 24 hours and get it in the mail stream. And if it takes a while, say if you send it standard post, your reputation’s going to be hit, even though you have no control over what the post office does.”

But among the factors that set the company’s e-commerce service apart is the rapid assignment of tracking numbers.

Customers want the tracking number right away. But, the traditional method of handling the mail, even using optical character recognition imaging, took too long.

“We couldn’t get a tracking number back to the customer in less than 24 hours,” said DeVico.

His company developed technology that works with many software packages that shippers use that allows them to assign a USPS tracking number when they fulfill an order

The shippers send an electronic report that lists all of the packages that they’re giving to Postage One. Once the packages are sorted, and Postage One sends the list to the Post office.

“What’s nice is that the customer that ordered the piece has a live tracking number almost immediately,” said DeVico.

While the move toward ecommerce and parcel deliver has been moving at a brisk pace, the company itself has been expanding.

DeVico noted that Postage One has become a top-10 mailer for the postal service. That means that the amount of money the company pays the Post office each year puts it in the top 10 percent of all customers.

Paul Parcellin

Paul Parcellin