November 23, 2009
Record Number of ZIP Code Changes Signals Major Shift for USPS and Boundary Designation
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Susan Smith - Managing Editor

by Susan Smith - Managing Editor
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Industry News

Record Number of ZIP Code Changes Signals Major Shift for USPS and Boundary Designation

By Susan Smith

Signs of the times seem to proliferate in; from going out to dinner fewer times a month, to abbreviated travel, to not buying a new home, to price cuts in software.

The high number of changes in ZIP Codes for the United States Post Office (USPS) in recent months is one of those reflections of change, directly traceable to economics, but also changing the face of how we view demarcation within cities and towns.

click to enlarge [

The Ophiem, IL post office was closed, and the surrounding ZIP Codes (including 61413 pictured) were expanded to pick up the delivery area no longer served by the Ophiem post office

For the company, Maponics, their start nine years ago attracted customers in the direct marketing space, so creating ZIP Codes maps was a pretty straightforward solution for their customers’ need to know the ZIP Codes that were best to mail to.

According to Maponics’ press release, “Maponics announced that the latest release of its suite of ZIP Codes map data shows evidence of a record number of ZIP Codes changes over the 3 months since the previous data release. This news validates that the U.S. Postal Service has already implemented significant on-the-ground changes related to the massive work force and mail delivery infrastructure re-evaluation it announced earlier this year, a reorganization initiated to address a projected 20 billion drop in mail pieces from fiscal year 2008 to 2009.”

“To compile the data requires an incredible amount of machine power and proprietary algorithms, to take something like 42 million records from the USPS every month and join them up to street networks and then create polygons, essentially boundaries of every ZIP Codes in the U.S.,” said Darrin Clement, CEO of Maponics. “What’s new is that in the past few months the number of changes that the USPS has pushed through in terms of the coverage area for ZIP Codes is more than we’ve ever seen. For example, San Francisco Bay Area, in just three months, 26% of the ZIP Codes changed.”

As a result of budget cuts and reduced volume of mail, the USPS is doing a lot of consolidating and getting rid of ZIP Codes. As a result, surrounding ZIP Codes have to absorb those other delivery areas, and so the “shape” of a ZIP Codes is really what’s accounting for most of the changes, according to Clement.

As post offices around the country are closing, there are still some areas of the country that are expanding in population and where more ZIP Codes are being added. Even in light of these additions, Clement said most change is consolidation of ZIP Codes which require surrounding ZIP Codes to pick up the slack. “That’s important for marketers, for any website, and when you think about real estate industry and how much they focus on ZIP Codes for driving sales, lead generation, home values, etc.,” said Clement. “ZIP Codes that now cover different parts of the city than they used to are going to skew property values and demographics, and so ZIP Codes have
infiltrated just about every area of commerce. And so when you have this level of change it really disrupts business as usual for a lot of industries.”

With that in mind, Maponics customers will get every three months new data releases. The biggest competitor to Maponics is TeleAtlas, with a ZIP Codes product line as well as street navigation and database.

A reduction in the budget of the USPS due to the projection of lower and lower mail volumes is responsible for a lot of the ZIP Codes consolidation in the country. Congress doesn’t want to keep funding something that is being used less and less, Clement pointed out, so as a result of the reduced funding they have to change their operations in order to make do with a lower cost of operations.

The postal side of Maponics’ business has been stable as ZIP Codes have been a solid component of business, however, now there is instability in the number of changes in that world. “Where Maponics has started to see a lot of interest is in the fact that ZIP Codes aren’t neighborhoods,” said Clement. “People try to use ZIP Codes to approximate neighborhoods but neighborhoods are less linearly defined. They’re a lot more fuzzy - where does a neighborhood start and stop especially in urban areas, so we’ve actually mapped out over 90,000 neighborhood boundaries and those are being used by companies in the mobile space, real estate, online
directories. A lot of people think in terms of neighborhoods rather than in terms of ZIP Codes. The average consumer doesn’t know a lot of ZIP Codes, they know the one they live in, they know the one they work in, and maybe they know the one of their mother’s.”

The overlap of neighborhoods within a ZIP Codes makes neighborhoods nearly impossible to map using ZIP Codes. “That’s where we’re seeing a lot of excitement in the landscape right now is by trying to target things by neighborhood rather than by ZIP Codes,” said Clement.

Maponics is also going international as there is a need for the same kind of data in other parts of the world. The company is in the process of creating neighborhoods and postal data for Europe now.

Since the post is managed by each country within the European Union separately, it is a lot more difficult to see signals of a change in their postal systems, said Clement. So far they have not seen global trends in mail volume.

According to the press release, all Maponics postal data is available for file delivery in a wide range of formats so that it integrates easily with ESRI, Pitney Bowes MapInfo, Oracle , SAP and many other GIS, database and web applications. It is also available via the Maponics Spatial API on a transactional basis.

The latest version of the Maponics ZIP Codes map data suite, version 1.9.4, features an a la cart selection of datasets, including: 5-digit ZIP Codes boundaries, ZIP+4 data (9-digit ZIP Codes data), postal carrier route boundaries, neighborhood-to-ZIP Codes correspondence data and custom postal datasets.

Top News of the Week

Intermap Technologies
announced at the ASPRS / MAPPS 2009 Specialty Conference that high-resolution digital elevation models and images for the entire states of Louisiana, Maine, New Mexico, North Dakota, Rhode Island, South Dakota, and Texas are commercially available. Collected as part of Intermap’s NEXTMap USA nationwide mapping program, scheduled for completion by June 30, 2010, these datasets join other complete statewide coverage of Arizona, California, Florida, and Mississippi, along with partial state coverage areas – all of which are immediately available for purchase and include approximately 80% of the U.S.

To help users evaluate
ESRI’s mobile geographic information system (GIS) solutions, the company is conducting a free live training seminar this month that will demonstrate the technology’s versatility and power. Introduction to ESRI Mobile GIS Solutions will air at on Thursday, November 19, at 9:00 a.m., 11:00 a.m., and 3:00 p.m., Pacific standard time.

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-- Susan Smith, Managing Editor.

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