MARCUS GEE October 12 1987


MARCUS GEE October 12 1987



Twice a day, five times a week, a letter carrier in the navy blue uniform of the Royal Mail walks up the path to Sue Hudson’s apartment in London’s Camden borough. Like other Britons, Hudson takes for granted prompt mail service to her home—and speedy delivery of the letters she mails. Said Hudson, 30, manager of the London office of Japan’s Fuji Television: “I can post a letter or card to my parents in Scotland in the afternoon, and they’ll receive it the following morning.”

In fact, the Royal Mail provides twice-daily delivery to all but 1.5 million of the 23 million addresses in the

United Kingdom—a standard of service that many Canadians would find remarkable. And it plans to extend that service to another 400,000 suburban homes soon. Just as remarkable is the Royal Mail’s financial performance. Unlike Canada Post, which had an operating loss of $129 million in 1986, the Royal Mail showed a $360million profit.

Profits: The Royal Mail is not alone. Postal services in Australia, the United States, France and West Germany all operated in the black last year. Unlike Canada Post, which aims to cut employment levels by 14 per cent by 1991, other services have managed to stay profitable hiring more workers. Postal unions argue that Canada Post should be able to copy that success—without selling retail operations to private business. Said Geoff Bickerton, research director for the Canadian Union

of Postal Workers (CUPW): “In Ronald Reagan’s America and Margaret Thatcher’s Britain, the post office is expanding. But here in Canada, Brian Mulroney wants to privatize.” Comparisons between postal service in Canada and other countries are difficult to make. Canada Post officials note that Britain’s much smaller size and highly concentrated population give its post office a big advantage over Canada, with its small population spread over huge distances and with its severe weather. West Germany’s post office and telecommunications monopoly are combined under a single ministry.

Profits from the lucra-

tive telephone service subsidize postal operations. And in the United States, a massive mail volume—147.4 billion pieces last year—allows the United States Postal Service (USPS) to enjoy greater economies of scale.

Wage: Canada Post officials say that their rates compare favorably with those in other industrialized nations. Basing calculations on the average manufacturing wage in each country, it says that it takes 1.8 minutes for a person to earn the price of mailing a first-class letter in Canada—36 cents. Only Americans—at 1.45 minutes—do better.

Canada Post officials add that standards for on-time delivery of properly addressed first-class mail—two days within the same city, three days between major centres in a province and four days between major centres in different provinces—are reasonable for such a large country. Donald Swanson, general manager of operations, said that Canada Post now meets that standard about 95 per cent of the time— and expects eventually to move 99 per cent of the mail on time. Australia, with similar distances to cover, offers § delivery within the

1 same state the next

between smaller centres in different states on the third day.

2 working day, between g state capitals on the a second working day and

Still, most other postal services are better than Canada’s in generating revenues. At one time, government subsidies of postal services were the norm in Western industrialized countries. But many national postal services have begun operating more like private businesses, aggressively searching for new ways to add revenue and control costs. In Britain, the post office offers an array of over-the-counter services ranging from banking to the sale of dog and motor vehicle licences. The Girobank, an independent bank that rents post office space, earned the Brit-



» 4

! U.S.A......................30i !

► Canada...................36$ *

> 4

¡ Australia..................34$ «

¡ Britain................. 37$ ¡

¡ West Germany..........54$ ¡

! Japan......................52$

ish post office $50 million in the last year alone.

CUPW argues that Canada Post should offer similar services, but the corporation says that such experiments have been unsuccessful. In 1984 Canada Post began offering an experimental service in eight post offices whereby customers could order merchandise by catalogue and pick it up later. Postal officials say the endeavor did not work. But CUPW leaders insist that it was cancelled for political reasons. They say that business, worried about possible competition from the post office, pressured the Liberal government of the day into discontinuing the experiment.

Despite competition from couriers, facsimile transfer, electronic mail and other communication methods, mail volume is increasing in most Western countries. For many postal services, that means expansion. The British post office, expecting the number of letters posted to grow by 25 per cent over the next five years, plans to add 20,000 to its staff of 180,000. The Australian service, which posted a modest profit of $28.2 million in 1986, added 700 employees last year. The USPS already employs 806,000 employees, making it one of the largest employers in the United States. Under U.S. law, the employees are prohibited from striking.

Hike: And the Americans have no plans to privatize their postal service. Said congressman William Ford, the Michigan Democrat who chairs the House of Representatives’ post office committee: “If you look at the rates in any of the democracies of the Western world, you will find we are the lowest. This system couldn’t be improved by private industry or anyone else.” But the USPS is not trouble-free. After earning a profit of $399 million in 1986, it expects to record a deficit this year of $262 million. The reason: a proposed hike in the cost of a first-class letter to 25 American cents from 22 cents (the equivalent in Canadian funds of an increase to 33 cents from about 29 cents) has not yet been approved.

Still, the U.S. experience should be encouraging for Canada Post, which became a Crown corporation in 1981. When the USPS was transformed from a government department into a semi-independent public corporation in 1971, Congress gave it until 1984 to become self-supporting. It reached that target one year ahead of schedule and has made a profit in four of the past five years. In the coming years Canada Post hopes to repeat that success story.

— MARCUS GEE in Toronto with PHILIP WINSLOW in London and WILLIAM LOWTHER in Washington