Important Questions on Postal Transformation

These are some important questions that come to mind in the process of modernizing Canada Post. There was no public or employee input involved in the decision-making. These are vital questions that should have been publicly addressed before implementation but still remain unanswered.

  1. Why is Canada Post spending so much money on new buildings and infrastructure when mail volumes are declining? If Canada Post was publicly traded, would investors infuse 2 billion dollars for a sales base forecasted on declining volumes or would they just want management to “sharpen the saw” with the least capital possible?
  2. Can the Post Office continue to rely on rate increases to cover costs?
  3. Why should Canada Post bear the cost of Company provided vehicles when historically employees provided their own? In Winnipeg, 70% of the traditional letter carriers use private vehicles, 5% public transit, 23% taxi and 2% walking directly from station to destination. Of the private vehicles 90% do not benefit from Canada Post subsidies of any kind. The costs are all borne by the carrier. In the new modern Post scenario, media outlets confer the purchase of 5000 additional vehicles on top of replacing a fleet of 6000. If the 5000 figure is correct, and this is to replace the private vehicles. The new cost adds 40 million of annual expenditures to Canada Post’s bottom line that never existed before. (27 million a year in lease payments, plus 13 million in additional annual fuel costs, approximately 7.5 million in annual insurance costs, and 2.5 million in annual maintenance)
    Is this a good business decision?
  4. Why use expensive air transport when trucking will suffice? USPS is trying to move as much delivery goods to surface transport as opposed to air to cut down on costs. Will Canada Post follow suit, or is moving nearer to the Airport an indication of the opposite strategy? One personal study concludes that air transport is 3x higher than surface transportation. How much would Canada Post save if the majority of goods were shipped by surface rather than by air? (It has been proven that the majority of urban centres can meet time objectives by surface).
  5. Wouldn’t it have been much cheaper to build a facility away from the airport with more emphasis on trucking logistics?
  6. Why such a big cost of transformation with so little return? The 2007 annual report demonstrates the costs are being shifted from labour to infrastructure with little financial change. Suggestions have been made that staffing is to be reduced by 10%. This brings in an annual savings of  $350 million dollars. The 2007 Canada Post annual report has stated that total debt obligations will amount to $315 million a year in yearly lease obligations in five years plus other obligations that could push it over 350 million a year. If this is correct, whatever costs associated with the upgrades and reductions in staffing leaves the financial picture unchanged.
  7. Why couldn’t the corporation just slow down the roll-out and use its available yearly profits to fund it?
  8. Why didn’t the corporation first test this plan in a controlled area of study and then implement a national strategy when all the serious problems had been ironed out?
  9. Should Canada Post be involved in ancillary companies such as InnovaPost, or should they shed non-core items and focus more clearly on the direct company mission?
  10. When will Canada Post issue annual reports that comply with the Ontario Securities Commission standards?
  11. Proposed savings from better health initiatives #1. How can letter carriers spending an extra 1.5 hours walking/delivering per day than the traditional model be construed as a health and safety solution? Wouldn’t extra time walking increase the exposure to injury? Shouldn’t the new model be decreasing the amount a letter carrier should be walking?
  12. Proposed savings from better health initiatives #2. Night shift work. It has been noted that mental health issues, productivity and absenteeism have to be addressed in order to control and improve costs. Much of this can be directly correlated to long-term evening and especially night shift work with its physical and social consequences. Productivity could likely be increased by 30%, absenteeism reduced by at least 50%, and would effect long term mental illness leave by a large percentage. There would be a decrease in workplace violence as well if night shift work could be reduced to a minimum. It is one of the most long-term expensive health problems faced by Canada Post. Why isn’t there even a remote discussion on a solution to the problems associated with evening and night shifts? The productivity improvements alone from improving work hours may even be more profitable than installing new equipment.
  13. How much does the universal Government mandate of sending mail from everywhere to anywhere cost Canada Post:

  • How much does Canada Post lose in sending mail to non-urban centres?
  • Does Canada Post have a hope of ever breaking even with these points?
  • Can increasing profits through innovation and better work practices from urban centres ever cover the losses of sending mail to non-urban centres? Is there a point with fuel costs that it will be impossible for urban centres to subsidize costs of delivery to non-urban centres?
  • How much profit did the urban centres actually make in 2011 to compensate for the losses accrued from the non-urban centres?
  • Do the Government subsidies for Northern and remote towns/villages cover the costs of delivery? If not, how much does Canada Post lose on this every year?
  • How much money does Canada Post lose from Fed Ex, UPS, etc. piggybacking Canada Post in delivery to non-urban centres every year?
  • How much does it cost Canada Post to deliver Parliament mail, admail and to Canadian military establishments such as Afghanistan every year?
  • Do the Government subsidies adequately cover the cost of delivery for magazines and publications? If not, how much does Canada Post lose on this every year?
  • Canadian Library parcel delivery service. Do the Government subsidies adequately cover the delivery cost for these? If not, how much does Canada Post lose on this every year?
  • Since these items are all acts of legislation and Canada Post has no control over these variables, shouldn’t non-urban centre costs be listed separately in the annual report as fixed expenses/liabilities?
  • Shouldn’t the profitable and the forced non-profitable entities of Canada Post be separated for financial reporting purposes?

Still looking for answers…

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2 Responses to Important Questions on Postal Transformation

  1. Pingback: The 2009 Annual Report – Some Answers | Canada's Postal Transformation Project

  2. Pingback: Canada Post’s Rising Debt Load | Canada's Postal Transformation Project

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