Postal strike means headaches for some, opportunities for others
July 1, 2011
OTTAWA, Ont. - Twenty-four-hour rotating postal strikes by the Canadian Union of Postal Workers appear to be accelerating across the country as Canada Post Corporation has countered by announcing that it is cutting staff and services at postal...
OTTAWA, Ont. – Twenty-four-hour rotating postal strikes by the Canadian Union of Postal Workers appear to be accelerating across the country as Canada Post Corporation has countered by announcing that it is cutting staff and services at postal stations and limiting mail deliveries in urban centres to Mondays, Wednesdays and Fridays.
The rotating strikes began June 3 and have affected service across the country. Since that time, Canada Post claims that volumes are down by up to 50%.
“Canadians are holding on to their mail because they are unsure what parts of the country are going to get service the next day,” according to Canada Post spokesperson Anick Losier.
The union has upped the ante by increasing the number of regions affected by the rotating strikes. The work stoppages began in Winnipeg followed by Hamilton, Montreal, Moncton and Victoria. More centres seem to be added to the mix every night. As Truck News goes to press, 13 medium and small cities are currently without postal services from coast to coast.
With Canada Post’s recent decision to cut back on mail deliveries in urban areas, the two adversaries appear headed for a full-blown nationwide strike. At issue are wages, working conditions, a burgeoning pension plan shortfall and concessions that CUPW says Canada Post is demanding from its members.
The last postal strike occurred in this country in 1997 and lasted less than a month before workers were legislated back to work. This does not appear to be the scenario this time, as remarks by Labour Minister Lisa Raitt indicate that she would prefer to let the dispute run its course while the two sides negotiate a settlement.
While the rotating work stoppages are a nuisance to the public, a Canada-wide strike could have a devastating effect on businesses reliant on the postal service for delivering invoices and receiving payment for services, as is the case with many trucking companies.
Trucking executives I talked to are worried and doing what they can to bypass the postal system – getting their drivers to drop off invoices and pick up cheques while making deliveries and pick-ups, and using courier companies to bill customers out of province. For the first time, some carriers are looking at electronic invoicing and direct deposit payments from customers.
One company owner, who wished to remain anonymous, is desperately looking for a ‘Plan B.’ Currently he’s using FedEx to deliver invoices but the premium he’s paying is paining him.
“It’s about $20 to deliver an envelope with an invoice within Canada and $35 to send one to the States. Right now I have to eat that cost.”
Courier companies can certainly expect an increase in volumes as the situation deteriorates. According to David Turnbull, CEO and president of the Canadian Courier and Logistics Association, “Our members will step up to the plate and try and fill the gap,” he says. “At the same time it’s important for them to maintain a level of service to all existing customers.”
“Some people may think that our industry is cheering for the strike but that’s not the case. We all believe in stability and service,” he adds. Turnbull expects that the strike will “fizzle out. It’s a sector that’s well serviced by a lot of courier companies.”
Certainly many couriers are eyeing the dispute eagerly and making plans for servicing more customers as the situation heats up. Aidan Grundy, spokesperson for FedEx Canada, says he has seen “sporadic” increases in volumes in some of their lanes.
“Right now it’s business as usual,” he says, “but we have contingencies in place should there be an escalation.”
Some shippers may be holding on to their mail hoping for an end to the strike, but others have to get their products out in a timely manner and are relying on alternatives. Most are willing to pay the increased rates charged by couriers rather than risk losing business to competitors. I called a customer service representative for Dynamex in Victoria, B.C., on the day that the rotating strike hit that city, and she told me that customer calls were up about 15%. A representative at Midland Courier in Montreal confirmed that volumes were up as well.
But the big winner for now appears to be Purolator, which ironically is 95% owned by Canada Post. On the morning after a rotating strike hit Montreal, a manager at Purolator’s Montreal hub told me they’d had “a very good night.”
A foreman at the busy Ville St. Pierre depot, that services much of downtown Montreal, acknowledged that letter mail was up 25% while parcel freight was also climbing although not quite at those levels. Roughly, mail volumes at the Montreal hub are up from approximately 20,000 pieces daily to about 30,000, while mail volumes in Toronto, Purolator’s busiest hub, have climbed to 61,000 pieces per day as compared to about 47,000 at pre-strike levels.
At the crux of the dispute are declining overall mail volumes which CPC says has decreased 17% since 2006. No doubt, these will drop even further as clients seek alternatives, including switching to fax machines and e-mails. “It’s a new world out there and we have to re-adjust,” adds CPC spokesperson Losier.
The top current wage rate for a Canada Post employee is $24.15 per hour (slightly less than the average of $24.73 for full-time Canadian workers). Canada Post wants to limit new hire wages at about 25% less, although its latest proposal for new hires has increased the pay scale from about $17 per hour to $19 and change. However, CUPW balks at the installation of a two-tier wage system wherein new hires would never reach the income levels of present workers.
The postal workers’ pension plan is also a bone of contention, as the crown corporation is holding the bag on a shortfall of $3.2 billion. Up until 2008, the pension plan was making money as the stock market was raking in profits. CPC’s proposes “no risk” pension plan contributions which are also anathema to CUPW.
Whatever the outcome of this contract dispute, as with most strikes it’s a lose-lose situation with no favourable outcome in sight. Canada Post will have to fight to win back its clients, and striking workers will have to work harder and longer to make up for lost wages. Needless to say, the public will be inconvenienced, and businesses will have to swallow increased shipping charges and struggle to keep servicing their existing customers.