Overview
The postcodes are alphanumeric and between five and eight characters long (including a single space separating the outward and inward parts of the code), e.g. the code for the House of Commons is SW1A 0AA. These codes were introduced by the Royal Mail between 1959 and 1974. They have been widely adopted not just for their original purpose of automating the sorting of mail, but for many other purposes – see postcode lottery.
The 'Outward' part of the postcode denotes the postal district - for example RH for the Redhill area, and then the following number distinguishes the post town – broadly speaking the Delivery Office that services the local area. So RH1 is Redhill itself, RH10 is Crawley. With larger towns there may be more than one number in the outward section – Crawley includes RH10 and RH11. In this case, RH also covers north Sussex, and has little to do with Redhill historically, apart from the railway links.
The reverse situation is uncommon but can also occur, with a single postal district lying within more than one post town - for example, the WN8 district straddles Wigan and Skelmersdale post towns. The 'Inward' part denotes particular parts of the town / Delivery Office area, with the first part – the number – being a sector, and the final two letters denoting a property or group of properties within that area. In the case of a large office block, for example, the 'Inward' part of the code may denote just a part of the office block, or often just a single company within that block (particularly where the company receives a large amount of mail). In some cases (for instance Driver and Vehicle Licensing Agency) the "inward" code may serve to direct mail to different parts of the same organisation.
Postcodes are used to sort letters to their destination either manually, where sorters use labelled frames, or increasingly with letter-coding systems where machines assist in the sorting work. A further variation of automated sorting uses optical character recognition (OCR) to read printed postcodes directly from envelopes, though these systems are best suited to mail that uses a guaranteed layout and addressing format.
A long string of "faced" letters (i.e. turned to allow the address to be read) are presented to a keyboard operator at a coding desk who types the postcodes for each destination onto their letter fronts in coloured phosphor dots. The associated machine uses the outward codes in these dots to direct bundles of letters into the correct bags for specific delivery offices. With a machine knowledge of the specific addresses handled by each delivery man at each office, the bundles can be further sorted, using the dots of the inward sorting code so that each delivery man at each destination receives only his "own" letters. This latter feature depends upon whether or not it is cost effective to second sort outward letters, and tends to be used only at main sorting offices where high volumes are handled. When postcodes are incomplete or missing altogether, the operator reads the post town name and inserts a code sufficient for outward sorting to the near-destination where others can further direct it. The mail bags of letter bundles are sent by air or train, and eventually road to the required delivery office. At the delivery office the mail that is handled manually is inward sorted, postal route (or walk) will deliver the item, and it is then "set in" by each, that is, it is sorted into the walk order that allows the delivery man the most convenient progress in his round. The latter process is now being automated, as the rollout of walk sequencing machines continues.
Read more about this topic: Postcodes In The United Kingdom