Thursday, December 12, 2013

Is that all the post office could come up with?

Since the post office department (literally part of the government) became the Canada Post Corporation in 1982, its mandate has been to deliver the mail but to do so on a self-sustaining model; in other words, no bailout from Parliament.    That's been fine, because until a few years ago it was a very profitable venture paying dividends into general revenues.

Recently, though, despite having huge revenue streams from Purolator Courier and the Canadian arm of, it's been losing money.   Simply stated, with people getting their bills online, through ePost no less (!), and a switch to e-mail as the main form of communication -- not to mention pretty tight collective bargaining agreements and being on the losing end of a pay equity case -- the post office has been losing money.

There are ways to turn all of this around.   But I am worried about the choices the company has made.   And I'll go through their "five points".

First, jacking up the price of postage to a buck (yeah, yeah it's 85 cents if you buy a book of ten but who does that, really?).    This may indeed reflect the true cost of service, and it may be Canada Post's way of getting out of the bind it was in when Parliament said it could only raise postage prices to just ¾ of the rate of inflation for several years ... that restriction has now expired.   For those on fixed incomes, or those who can't afford Internet access (or believe it's the tool of the devil), it certainly puts a crimp on their lifestyle.   So what if costs less than a cup of coffee?

But it's interesting this is happening just as the federal and provincial governments are phasing out cheques as a method of paying entitlements and refunds.    Members of Parliament and Senators get double-ended franking (i.e. postage is free both ways), but the executive has to pay for mailings.    There may be volume discounts for them as well as large commercial enterprises but small businesses pay the going rate .   And as far as Business Reply Mail?   It's like a collect call, they pay more to receive it (there, one of "Their" dirty secrets is out in the open!)   Guess how many charities will stop accepting BRM, even if it means a drop in donations?    Do the math.  A ton.

I find it more than coincidental that the Post, knowing they would lose their biggest customer by far, would make up the difference and then some with postage.     If anything, this may actually get people who don't bank online or get direct deposit to do so.  No money, no money.

I'd say phase in the increase over four years.   Not in one fell swoop.

Second, ending door to door delivery for the third of the population that still has it.     Sure, it's easy to just walk to a mailbox.   When I was just five or six years old, my family and I were using a primitive version of the Superbox.   But when I moved to neighbourhoods that had them, I enjoyed the convenience of D2D.   Maybe that has gone the way of the dodo, but there are a lot of people, especially seniors and the infirm, who won't appreciate having to walk with difficulty to get their mail or worse paying someone else to do so.

I think everyone should get D2D -- every household -- but that's not really practical under the current framework.    But how about giving us the choice, on a user-pay basis?   If the difference between delivering to a doorstep and to a community mailbox is just $100 or so, as the Post claims, then why not let people decide?   Given the choice, I think most of us would gladly pay for the convenience.

Third, franchising post offices.   Most of them actually already are.   Contrary to popular belief, they are not allowed to charge more for parcel service than corporate owned stores --  that's against the law and it should continue to be so.  But getting out of the business altogether is another story.    There may be some cases, especially in rural areas, where a franchise simply isn't sustainable.    In this case, a higher hand is warranted.

There should be no sacred cows, but every corporate office should get the magnifying lens and the determination if local involvement is more appropriate or if the company should stay.    Whatever the case, corporates should have the same operating hours as franchises -- usually, the same hours as most malls.    And for God's sake, don't get rid of the historical offices, like the one on Adelaide Street in The Smoke.    I'd kind of like, just once, sending out mail the way they used to -- with a seal and wax!

Fourth, the old standby, streamlining.    This means fewer postal sorting plants.

There was a big uproar not that long ago in the Tri-Cities (Cambridge, Kitchener and Waterloo) when The Post wanted to close the plant there and move operations to the Millen Road plant here in Hamilton.    Delivery of sensitive mail is essential everywhere; but in an area much more prosperous than The Hammer, it is much more so especially with financial services and health and life insurance which they have a lot of.    There was some backing off although there were also layoffs, but no guarantee of the future.

What does this mean?    More centralization.

I'm sorry, but my answer is no.    There may be some plants which are truly redundant, but processing close to the point is what helps get the mail out in time.    I don't think the Millen plant is going away anytime soon, but I'm sure people in Stratford or Saint Thomas would be happy to learn their mail was going through Hamilton, if you know what I mean.     Better mail sorting machines, sure.    But this is nuts.

Fifth, attrition.   Ah yes, get rid of the deadwood, don't hire any new people -- or at least as few as is necessary to run the joint.

Two points there -- severance packages mean you get your company pension up front until you're 65 at which time it stops paying.    You have to rely on CPP / RRQ, OAS and your RRSP (if you have one).    People paid into these things counting on a pension for life, and while there is a big shortfall of $6.5 billion (which can be overcome), it's not fair to change the rules midstream.   For new people coming in, maybe.   Not for the veterans.  A deal is a deal.     And what if one takes a package while his or her union grievance is still in process?   Does that mean if he or she loses, the pension is gone too?    No one has answered that.

As for new people -- yes, there are intakes every so often, but it's not like it used to be.   The wages are lower and the benefits less.   And remember, these are not civil servants, they are employees of a Crown Corporation.    But as federally regulated employees, the labour and workers' compensation rules are different than for everyone else.    They may not get the same treatment they might get at a lower level of government.    The disenchantment and "revolving door" syndrome could be substantial unless newbies have the expectation of getting to a "regular" pay level rather quickly.

There are other ways of achieving the goal of getting back into the black.   Three day a week delivery; contracting delivery to the private sector; making some components of the "midstream" other than sorting competitive as well.

But this is a worst case, graveyard scenario.     And the problem is, it's harder to dig out of a grave than to dig it.    Ask any government who's run a deficit; going back to the black there is a Herculean task.

1 comment:

Unknown said...

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