Saturday, 1 March 2014

Fear and Loathing at Canada Post

How does a nation protect a venerable ancient institution like its postal service?  How do you square the fact that the post still has an important role, albeit not one as central as it had in the past, in today's society, while recognizing that the service is not as relevant today as it once was? How do you address the truth that the lack of profitability in traditional mail creates a situation of taxpayer-subsidized busywork?  I don't have specific answers to these questions, but I do know that the party that is responsible for answering them, the Canadian government, is making just about the worst job possible of it.  Through their actions, they are ensuring that the service Canadians expect steadily declines, which creates antipathy toward postal workers and Canada Post, and in turn gives the government licence to ignore postal workers and their concerns (the cynicism manifests itself in government responses which amount to who sends mail any more anyway? Ha ha ha), which then further demoralizes postal workers, which in turn lowers the service level even more.

This is the negative feedback loop dynamic Canada has been stuck in with its postal service for almost three years, and the radical changes coming into effect right now ( a 30% stamp price increase, no more door to door home delivery) is sure to add fuel to the raging junk mail fire.  This is not an issue the government has any interest in engaging with, for the simple reason that it contains no political benefit for them, and their formal position on the changes in the postal landscape so far has been callous dismissal.  The website of the Canadian Union of Postal Workers, on the other hand, features plenty of ideas, petitions, demands, righteous indignation, and frustration, but Lisa Raitt (or whichever pylon minister is responsible for this file now) has been content so far to ignore any and all of this noise and just keep that back to work legislation at the ready.  How do we get a file that has been allowed to corrode to this point out of the ditch?

One thing is certain, things have not been the same since the strike.  The "essential service" or "minimum service" or whatever was in effect during the first year the fight dragged on between the government and the union was erratic, unreliable, and anything but punctual.  This may be anecdotal based on my experience, but it has mostly continued despite a "deal" being reached in June 2012.  The Post was a well-oiled machine before that strike.  Now the mail is often late, missing, or arriving in bunches after several days of nothing.  A birthday card I sent did not arrive on time because of a feud over the condition of the recipient's front steps.  A document my wife urgently needed (because the party whom she needs to send it to needs an "original". Such parties are the roadblocks to society's universal conversion to PDFs.  More on that later) has arrived today 5 business days after its postmark.  So much for that 1-2 business days inter-provincial turnaround promised on mailboxes.  I don't blame the postal workers for this.  Nobody wants to work for an employer that clearly views them as an inconvenience, and despite the "arms-length" nature of Crown Corporations, there is little doubt in anybody's mind about where the buck stops with these hybrid entities - the Federal Government.  So when your employer tells you that they expect you to deliver mail to a million more addresses in five years, with 7,000 less employees, and find 5 billion dollars in profit to boot to plug that hole in your pension plan, how do you feel about your job?

Yes, the government deserves full marks for kicking Canada Post employees where it hurts, and delivering mail not an easy or pleasant job by any stretch of the imagination.  But we must acknowledge that it is unnecessary in 2014 - if not outright absurd -  to send a document down a rabbit hole of complex journeys by truck, train, plane, and foot, through distribution centres, and to have complete trust in this system to deliver that document, with no mechanism to get that document back or to even know where it is, wait several days AND pay 63 cents PLUS your time to locate a mailbox to physically walk to and drop it in.  Or, I could scan said document right here where I'm sitting right now, email it, and have it to that other person instantly.  And if they claim they never got it, guess what? It's right here in my sent with date and time stamped to prove it.   Yes e-commerce is not the "zero carbon footprint" phenomenon you thin it is because servers do eat up a ton of energy, but being that one of CUPW's arguments against abolishing of home delivery is the "increase in emissions" that will result, I think it stands to reason that the electronic process I described above is exponentially simpler, easier, more convenient and lower impact than the manual one.

These decisions are not made by Canadians after sessions of internal tortured reasoning and argument, they are made on the basis of choice.  What is easier? And the answer can be found in mail volumes, which are declining precipitously every year.  And before I get called out as merciless, efficiency-seeking, ruthless modernizer, let me tell CUPW and its members that I am one of the deranged weirdos who still sends physical letters to his friends.  Yes, I am a purist who believes there is innate value in the medium of the letter which is lost in electronic communication.  Sadly, me and some other romanticists are not going to keep a multi-billion dollar postal operation afloat, so we need to look at our options here.  And the options are all unpleasant.  The Post has to make some hard choices.

Back in the 1990s, when the Post was swimming in red ink like it is now, a less tough choice was made.  A network of brick and mortar post offices, where unionized employees were paid high salaries and benefits to essentially do retail/clerical work (sell stamps and envelopes, process money orders and money transfers, send packages) were shuttered.  Now your trip to the "post office" is likely to be to inside a grocery store, convenience store, or pharmacy, and where the "postal" employees work for that grocery store, convenience store, or pharmacy chain.  As such they receive the market wage for this kind of work, e.g., close to minimum wage, because if Shoppers or IGA or Deepak's Convenience pays $25 an hour to man a cash register, they will pretty much be out of business.

The Union hates this, of course.  They have a mandate to protect their workers' interest whatever the cost, and if that means saying that their workers have "expertise" at selling stamps in protest to the end of their retail monopoly, they will say it.  The example above illustrates why they act this way: when there is no threat of going out of business, in simple terms when you are allowed to keep operating even though your liabilities exceed your assets because you are owned by the government, you don't care about whether your service is profitable or whether people even use it.  All that matters is you make your workers appear like suffering victims as much as possible, like they couldn't have possibly been expected to save a dime of those great wages they earned yesterday.  They will need higher wages tomorrow regardless.  Even unionized private sector workers do not have this sense of entitlement - just ask workers at GM, Chrysler, and Loblaws, to name three, whose union leaders would ask for the moon with the routine belligerence until market conditions caused their members to actually accept pay cuts to keep their jobs.

I mention this because there are still a number of said non-retail "post offices" (real brick and mortar ones, like from the 1950s), in rural areas.  These are of course the ones the CUPW is fighting tooth and nail to keep open on its website.

Of course, this is where the issue gets murky and we have once again problems stemming from a business being run by the government.  The government derives a lot of its support from rural areas, and is loathe to pose any gesture which might annoy them now.  People in such areas tend to look on big city folk and their ways with suspicion, and do not want any downtown urban custom like buying  stamps inside a Shoppers Drug Mart imposed upon them.

Another demographic it was widely believed the government courts heavily is seniors.  Apparently not, with the two opposition parties as well as provincial and municipal politicians rushing to the barricades to cast themselves as tireless defenders of seniors' right to home delivery.  But I think the government is shrewdly playing its cards here - they are taking the calculated risk that committed senior conservative voters will not ditch them over this.  And if a few do, well, that's the cost of doing business.  Just look at how they threw veterans (another supposed core constituency) under the bus.

All these battles over optics, fought in a climate of delay, denial, ignorance, and apathy do the Post and the population it serves no favours.  There is a simple way to get it back on track.

-Urban delivery on its own, believe it or not, is still profitable.  It's the staggering distance, low density, and wide open space of rural routes that make them chronic money losers.

-The Urban operations should be spun off into a private entity with the option to look at options like banking and other services to diversify their revenues as letter volume inevitably decline further.  They can also expand or spin off the already profitable and growing Purolator package delivery business they own.

-Meanwhile, sick banks, the pension liability and the money losing rural service need to be absorbed into the general government revenue as a huge, painful, one-time charge.  It's going to hurt but it's the right thing to do for everyone who's already been promised the moon.  Meanwhile, new hires need to be hired on a much more flexible, cost-effective compensation system.

Will we get that? Not with this government, who would rather brag about a fake surplus than deal with a real financial problem the country has.  They will ensure that postal workers' working conditions further deteriorate, that the use of the post declines further with its reliability, and the liability transferred to future taxpayers will be even greater for something they are ensuring will be much less significant in Canadian every day life.  The Post Office is a government mandated and provided service, which is something the current government fears and loathes.  Another term, and they will ensure that it is something most Canadians do, too.

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