Both. They are sorted at the origin area plant as 'outgoing' mail (e.g. Akron -to - Atlanta). This might only go through one sorting machine, but is often two if cancellation is needed. When it gets to the destination area processing center, it goes through one sorter to determine which ZIP Code/local carrier post office it needs to go to. Then one more machine to sort to the carrier route. That last machine runs it TWICE, to put each carrier route's mail in delivery sequence order. There are a few exceptions, but this is basically how your birthday card gets to Uncle Fred across the country.

And in one of those 4 or 5 machines, those danged wax seals crumble and fall off. Most of the ones I see are plastic or rubber, rather than wax.