Eliminating Delivery to the Door

Canada Post

One component of both the House and Senate postal reform bills is a section that eliminates door delivery.  The idea is that by eliminating door delivery, the Postal Service would see a major reduction in delivery costs.  While reading through Canada Post’s most recent annual report, I found this table that illustrates the mix of delivery points in Canada. As often noted, about half of Canada Post’s delivery addresses are found at a centralized delivery point, about evenly split between apartment lobbies and group mailboxes (i.e. cluster boxes)  About a third of all delivery points are at the door which includes delivery to the curb.   The remainder of mail is delivered [...] Read more »

WSJ: Is the Postal Service Worth Saving?

In a video entitled, “Is the Postal Service Worth Saving?” [See below] WSJ Marketplace Editor Dennis Berman and Mean Street host Evan Newmark suggest that the only reason Congress doesn’t put the Postal Service out of business is that “saving the USPS could put votes in politician’s pockets.” Both Mr. Berman and Mr. Newmark express an incredible ignorance about the postal market and why national posts worldwide are profitable and remain an integral part of a nation’s infrastructure. The Wall Street Journal’s Understanding of Postal Policy in 5 Bullet Points Mr. Berman presents the basic argument is as follows: The Postal Service is a quasi-social welfare apparatus. It is bedrock [...] Read more »

Room for Compromise on Rural Retail Postal Services

montana Post Office

Senator Max Baucus of Montana has introduced Senate Bill 1649, United States Postal Service Pension Obligation Recalculation and Restoration Act of 2011, that includes a provision designed to ensure rural retail services.  The provision prevents the Postal Service from “the Postal Service may not close any post office which is located more than 10 miles from any other post office. In its Retail Access Optimization proposal currently before the Postal Regulatory Commission, 33.2% of all locations are more than 10 miles away from the nearest Post Office.  Therefore, Senator Baucus’s legislation would have a major impact on the Postal Service’s decision to close rural post offices. While as currently written, [...] Read more »

Canada Post Strike – Impact Just as Projected

A Sun News story today confirmed the projections made in this blog over the past two weeks about the impact of the Canada Post strike.   The strike has shifted volume from Canada Post to competitors and has negatively affected the Canadian economy.   Now here are the relevant quotes from the Sun News article: Losses of Mail Volume To Purolator:Purolator even had several battle plans in place to handle the surge in customers that comes with a work stoppage. “We considered an alternative in case orders increased even by 20%,” said Roch. “The challenge for our logistics team is to make the process flexible enough to accommodate new customers without affecting [...] Read more »

Could Canada Post Just Stay Shuttered?

Canada Post announced today that it is halting mail delivery nationwide.  In a statement, Canada Post spokesman Jon Hamilton  stated “If we allow the uncertainty created by the rotating strikes to continue – and we’ve seen customers walking away from Canada Post – our ability to remain financially self-sufficient and not become a burden on taxpayers certainly is going to be in jeopardy.” The lockout by Canada Post is designed to put pressure on CUPW to modify its demands to the point that the the two sides can agree on a contract.   But what happens if there is no movement toward an agreement and the Harper Government does not force [...] Read more »

Impact of the CPC strike on the Canadian Economy

As noted in an earlier post, mail volume at Canada Post is down 50%.   The decline in demand has affected employment levels all across Canada.  National Association of Major Mail Users President Kathleen Rowe last Thursday stated that the strike has resulted in the layoff of at least 15,000 Canadians.   This is on top of the reduction in employment at Canada Post as it switches to three day delivery in urban areas for the duration of the strike. The Jobs Impact of Canada Post and the Postal Market and the Strike’s Impact Canada Post is the core of an industry that likely employs between 500,000 and one million Canadians.   As in the United States, Canada [...] Read more »

Canada Post Strike: a Lose – Lose Proposition for CUPW

For over a week, the Canadian Union of Postal Workers (CUPW)have struck Canada Post in a series of rotating strikes that affects Canadian cities on nearly a random basis.    The impact of the strike is clear and it is not good for either CUPW members or Canada Post customers.  According to Canada Post, daily mail volume is down 50%.   In response Canada Post has cut delivery to three days per week in urban areas. CUPW employees not on strike find their work hours curtailed to match the lower mail volume and reduced delivery schedule. In authorizing a strike, CUPW members clearly believed that Canada Post’s offer was a losing proposition for [...] Read more »

Privatizing the Post

In the United States, the policy debate is over how the Postal Service will survive past the end of the fiscal year.   In Great Britain and Canada the debate is now respectfully when and if the Post should be privatized. Royal Mail clearly is on a path toward privatization. In July, Sky News reported the government hired advisers on a potential Royal Mail sale. More recently, Royal Mail hired Moya Green, former CEO of Canada Post who the Times (London) steered the “organization to a trebling of its net profit to C$281 million (£183 million), despite a 5.1 per cent drop in revenue.“  Ms. Greene also served as “Assistant Deputy [...] Read more »

Cutting Delivery One Day a Week

The Globe and Mail has reported that the Montreal Gazette is eliminating its Sunday paper.  This decision leaves the Montreal metropolitan area without a Sunday paper.  The Saturday paper, which already has the week-in-review and other features that are commonly found in Sunday papers in the United States will pick up those features that are now published on Sunday. The decision to end the Sunday paper also reflects a far different competitive market in Canada for the delivery of saturation advertising than is found in the United States.  In Canada, newspapers do not distribute nearly the number of inserts they do here.  Newspapers in Canada have not effectively competed with [...] Read more »

USPS: Last Post Standing

The Japanese government announced yesterday that it will begin the process of privatizing Japan Post.  (See: Business Week)  The decision by the Japanese government leaves the United States Postal Service alone as having a business model with many characteristics of a government department. The following chart illustrates where many of these posts sit on a continuum from government department to a corporation with only private shareholders.     Postal Operators operating as a government department, in a manner similar to the pre-Postal Reorganization Act Post Office would be placed on the far left side of the chart.   A national post with only private sector shareholders would be placed on the far right [...] Read more »