MLOCRs work by capturing images of the front of letter-sized mailpieces, and extracting the entire address from each piece. It looks up the postal code within each address in a master database, prints a barcode representing this information on the mailpiece, and performs an initial sort. All of this occurs in a fraction of a second as the mailpiece passes through the machine. After this point, mail is further sorted by barcode sorters that read this barcode to determine its destination throughout its journey all the way down to the walk sequence of the mail carrier.
If the MLOCR is not able to decode the address (usually due to being handwritten), it puts the mailpiece on "hold" by putting a unique fluorescent barcode on the back of the mailpiece, and these un-coded letters are set aside while the Remote Bar Coding System (formerly called Remote Video Encoding) scrutinizes these. An image of the mailpiece is sent to a Remote Encoding Center where more powerful computers or human operators determine the address and ZIP+4 or postal code. This data is sent back to the MLOCR site where it is matched with the unique barcodes on the back of the un-coded mailpieces, and these pieces finally are given barcodes like the rest of the mail. All this effort is put into deciphering these mailpieces so that they never need to be examined again.
The United States Postal Service is the largest user of these machines); however, large volume mailers and mail consolidators also have their own MLOCR systems to barcode outgoing mail, in order to receive significant postage discounts.
An option called FASTforward can be added to an MLOCR that allows it to automatically forward mail to a new address. This additional computer hardware/software combination looks up decoded addresses in the National Change of Address database to see if the recipient has recently moved. If so, a POSTNET barcode representing the new address is sprayed on the mailpiece thus routing it to new address although the old address is still visible—a testament to the fact that mail is sorted entirely by machines in the United States today.
Canada Post also uses Multiline Optical Character Reader systems in its mail sortation process.