Section 5 - Comparison of Distribution Methods
5.1 Cost Considerations
If The table below presents a summary of the estimated differences in costs for the two distribution methods for each of the three areas of operations discussed in the sections above. The cost differences shown are for the Alternative Method relative to those for the Current Method. Implementation of the Alternative Method cannot be recommended based upon estimated costs over the 10-year planning horizon, since both estimates project the Current Method to be lower cost than the Alternative Method. Given other risk associated with making such a change in operations, it is not recommended to do so.
Exhibit 1 – Comparison of 10-Year Cost Differences for New DTBM Distribution Methods Alternative Method Relative to Current Method
| Parcel Post Basis | Media Mail Basis | |
|---|---|---|
| Delivery Costs (USPS) | -$405,170 | -$1,028,438 |
| Storage and Picking & Packing Costs (NLS) | $621,982 | $621,982 |
| Information Systems Costs (NLS) | $450,000 | $450,000 |
| Total Additional Costs for Alternative Distribution Method | $666,812 | $43,544 |
5.2 Service Considerations
The NLS has an objective of deliveries of new DTBMs to readers taking no longer than five (5) days. This objective will be impossible for a single-site distribution configuration for the Alternative Method, whether based on the West Coast, or in fact located very centrally in the US. Brief examination of delivery times from St. Louis, MO and Kansas City, KS (the locations of the most centrally-located USPS BMCs in the contiguous 48 states) revealed that 5-day or less delivery times to all points in the 48 contiguous states from these locations cannot be achieved.
Another concern with implementation of the Alternative Method is the service reduction to readers in Alaska, Hawaii, Puerto Rico and the Virgin Islands. These deliveries would likely take 2-to-5 weeks under the Alternative Method.