Canada Post sees $13M profit in 3rd quarter of 2014

http://www.cbc.ca/news/politics/canada-post-sees-13m-profit-in-3rd-quarter-of-2014-1.2850799

Canada Post is citing pensions, parcels and changes announced last year as reasons for both a third-quarter profit and expectations to end 2014 in the black.

The corporation said Wednesday it posted a pre-tax $13-million profit in 2014's third quarter, which is $142 million more than the same quarter a year ago, for a pre-tax total of $39 million in profits through the first nine months of this year.

It posted a pre-tax, $53 million profit in 2014's second quarter, the first profitable quarter since 2010.

• Canada Post makes a profit after hiking mail prices
• Canada Post to phase out urban home mail delivery
• Canada Post court challenge launched to save home mail delivery

While the amount of so-called "transaction" mail (which includes letters, bills and statements) continues to fall, Canada Post said increasing the price of sending these kinds of mail has played a big part in growing transaction mail revenue over the last year.

"Largely as a result of the Lettermail price adjustment put in place in the second quarter, revenue from Transaction Mail … rose by 13.7 per cent to $750 million in the third quarter compared to the same period in 2013," Canada Post said in the release.

"Revenue for the first three quarters rose by 6.5 per cent to approximately $2.4 billion compared to the same period last year."

Almost three million more parcels went through Canada Post in the 2014 third quarter than in the same 2013 quarter, leading an 8.2 per cent growth in parcel-related revenue to $337 million.

Overall, Canada Post said it has made more than a billion dollars more revenue from sending more than four million more parcels in the first three quarters of 2014 compared to 2013.

Canada Post also said "highly volatile" employee benefit costs went in its favour last quarter, as costs decreased by $48 million — a total of $161-million less in 2014 than the first three quarters of 2013.

It said "strong pension asset returns" last year and an increase in the discount rates used to calculate benefit plan costs this year are factors in those decreases.

Revenue from direct marketing mailouts dropped by $15 million in the third quarter this year compared to last, when it was $294 million.

Sixty-five million fewer pieces of direct marketing mail were sent out this third quarter compared to the last quarter.

800,000 homes switching to community mailbox

Canada Post is in the midst of a major restructuring announced in December 2013 that includes the end of door-to-door delivery in favour of community mailboxes and an increase in the cost of postage.

On Wednesday, the corporation said about 100,000 homes have been switched to community mailboxes, about 700,000 are in the process of doing so and another 200,000 or so will be notified next month.

It also said "consolidating processing operations" because of the steady decline in transaction mail volumes — 175 million fewer pieces of mail in the first three quarters of 2014 compared to the same time frame in 2013 — is leading to savings.

As part of those operations, mail is being moved from plants in cities such as Ottawa, Hamilton and London to Montreal and Toronto, as well as from Saint John to Halifax.

Canada Post said it spent $13 million less on labour in 2014's third quarter than in the same 2013 quarter, because of "streamlining and modernization."

The decline in mail volumes in the 2014 third quarter comes after a second quarter during which it slowed somewhat unexpectedly, which Canada Post said could have been related to mail from two provincial elections.

When announcing its new plans nearly a year ago, Canada Post said it would eliminate 6,000 to 8,000 positions between then and the end of 2018, but 15,000 employees were expected to leave the company or retire in those five years.

Union: profits show motivation behind cuts

The Canadian Union of Postal Workers is challenging the end of urban door-to-door mail delivery in Federal Court, saying it violates Section 15 of the Charter of Rights and Freedoms by taking away rights from people with disabilities, and that the move didn't get the parliamentary approval required.

It issued a news release Wednesday afternoon saying the profits prove Canada Post doesn't need to end door-to-door delivery.

"At this point, it's obvious that these cuts are based on attacking public services, rather than the facts," said union national president Denis Lemelin in the release.

"Our post office has been profitable for the vast majority of the last 20 years and continues to be profitable. We need to stay headed in the right direction, not cut back on a good service."

The union said the corporation had projected a loss of $274 million in 2014, so the profits show their forecasts can't be trusted.

Unions Fight Postal Service Plans To Shutter 82 Facilities, Lower Mail Standards

http://www.huffingtonpost.com/2014/11/12/postal-service-consolidation-plan_n_6147200.html

With the U.S. Postal Service planning to shut down 82 more plants starting in January, postal worker unions and allies in Congress are pushing for a late-game moratorium on closures they say will weaken the agency and further slow down the mail.

The scheduled shutdowns are part of a consolidation plan the agency put in place in 2011 to help staunch its red ink, much of it the result of pre-funding mandates instituted by Congress. The closures go hand-in-hand with the postal service's plan to save money by reducing the service standards for certain mail categories, a strategy that's divided stakeholders in the postal reform debate.

According to the postal service, the plant consolidations would most affect first-class mail. Personal letters, bills and greeting cards that normally reach their destination overnight would take two days after the closures. Priority mail and packages won't be impacted, the agency said.

The facility closures and lowered service standards, the unions argue, will ultimately hurt the agency rather than help it, leading to the proverbial "death spiral" as customers find the service slower and less reliable. The unions are gearing up for a round of protests on Friday, with nearly 150 demonstrations scheduled around the country.

The upcoming consolidations are the next battleground in a larger debate over how to make the postal service viable in the future. With the agency facing a possible bankruptcy, the postmaster general, Patrick Donahoe, advocated for a number of cuts and reductions that postal unions found counterproductive.

"The mail has already been slowed down. We're trying to keep it from being slowed down even more," said Mark Dimondstein, president of the American Postal Workers Union, which represents 200,000 postal workers and retirees. "Two days will become three days and four days. It will be a slowing down of the mail throughout the country."

The postal service has said that it is responding to falling mail volumes -- particularly first-class, which has dropped by 53 percent over the last decade. The closures, it maintains, are necessary for the agency to regain its financial footing.

"The fact is that the US Mail is changing. There are now fewer letters and considerably more packages and the network must reflect that," Sue Brennan, an agency spokeswoman, said in an email. "With major volume decreases in First-Class Mail, the Postal Service has significant excess capacity in its network and cannot sit idly by and do nothing. The Postal Service firmly believes that the operational changes being implemented are necessary."

The postal service closed 141 processing facilities between 2012 and 2013 in the first phase of its consolidation plan. The second phase, originally slated for early 2014, was pushed back to this coming January. According to Brennan, all the consolidations together are expected to save $2.1 billion annually.

The consolidation of plants means that some facilities will lose jobs, while others gain them. An analysis by the publication Government Executive found that the postal service's plan will result in a net loss of 7,320 jobs.

The agency has said it needs to implement such cuts in order to contend with a long-term decline in first-class mail volume, the rising cost of wages and benefits for its workforce, and the funding mandates placed upon it by Congress. In a public letter to customers earlier this year, the postal service said the plant consolidations "will establish the low-cost, technology-centric delivery platform necessary to serve the mailing and shipping industry for decades to come."

Indeed, the agency has lost billions of dollars in recent quarters, and first-class mail has fallen off significantly in the Internet era. But most of the agency's financial losses stem from a requirement passed by Congress in 2006 that the postal service prefund retiree health benefits to the tune of more than $5 billion per year. The postal service is an independent agency that's funded through postage fees rather than taxpayer dollars, but Congress still oversees the agency and would have to legislate any major overhaul.

With mail rebounding during the economic recovery and package delivery growing with e-commerce, the postal service actually turned an operating profit recently when the retiree health costs are set aside. Unions have held up those financial improvements as evidence that service cuts would be damaging.

"With the Postal Service operating at a profit -- about $1.3 billion so far this fiscal year -- degrading service by closing processing plants and slowing the mail makes absolutely no sense," Fredric Rolando, president of the National Association of Letter Carriers, told HuffPost through a spokesman. "It would hurt Americans and their businesses, eliminate overnight mail, cost jobs -- and it would be destructive for USPS as well, because it would drive away mail and revenue."

There are a couple of ways the unions may win a reprieve on the facility closures.

The first would be if Congress includes a delay in a spending bill passed in the lame-duck session. In August, 51 senators sent a letter to leaders of the appropriations committee, urging them to insert such a moratorium into either an omnibus spending bill or a shorter-term continuing resolution. "As the postal network has been weakened, service delivery has suffered," they wrote.

Lawmakers did not put a moratorium into the continuing resolution passed in September, though they'll have to pass another funding bill by the time the current one expires in early December.

A moratorium has the support of most Senate Democrats. But it doesn't have backing from Sen. Tom Carper (D-Del.), who chairs the Homeland Security and Governmental Affairs Committee, which oversees the postal service, and who is one of the most influential voices in the postal reform debate. A Carper spokeswoman told HuffPost that the senator would only support a delay in facility closures as part of a larger postal reform bill -- something that's all but certain not to pass Congress by January.

Without a moratorium from lawmakers, the other hope for the unions is that the postal service itself will decide to postpone the closures like it did last year.

"Congress is not the only way this can be done ... it's also in the hands of postal management," APWU's Dimondstein said. "There's nothing that says the postmaster general has to move forward with any of this."

What Happens If the Post Office Is Your Bank

http://money.usnews.com/money/personal-finance/articles/2014/08/13/what-happens-if-the-post-office-is-your-bank

Today, the U.S. Postal Service is best known for delivering packages and letters. One day in the future, though, customers might also be able to take care of their banking needs, including prepaid cards, bill payments and small loans, at post office windows.

At an event hosted by The Pew Charitable Trusts last month, Postal Service inspector general David C. Williams pointed out that many postal services around the world already provide these types of financial services to customers, and the U.S. Postal Service did as well during the first part of the 20th century. “The post office already sells money orders, runs a huge cash retail business, sells insurance on parcels and cashes Treasury checks,” he said, adding that post offices exist in many communities throughout the country, including in low-income areas that lack bank branches. (The Postal Service is also authorized to provide some financial services, including money orders and international money transfers.)

“The postal service could provide a digital and physical platform for making financial services available to everyone … [and] provide a critical link to Americans who have no alternatives to check cashing and payday loans,” Williams said. Offering these services would also benefit the Postal Service by allowing it to adapt to the needs of its consumers and generate new income streams, he added. A white paper released earlier this year by the U.S. Postal Service’s Office of Inspector General estimated that adding financial services to the Postal Service’s offerings could generate $8.9 billion a year. It also noted that 1 in 4 American households currently lack access to mainstream financial services like bank accounts, which leads to them spend an average of $2,412 a year on interest and fees.

Sen. Elizabeth Warren, D-Mass., who supports the proposal for the Postal Service to start offering financial services, says the current financial industry is suffering from a “market failure.” “There’s a need for expanded financial services for families of moderate means, and the traditional banking industry no longer works,” she said at the Pew event in the District of Columbia.

The American public also appears receptive to the idea of doing their banking at the post office. The vast majority of 1,626 respondents in a 2014 Pew Charitable Trusts survey expressed positive views toward the post office, and 7 in 10 said it didn’t matter to them that the Postal Service currently offers money orders. A similar portion said they were indifferent to the prospect of financial services being available at post offices. “There is a market here, but it’s limited. The majority say they’re not at all likely to use these services,” said Alex Horowitz, research officer at The Pew Charitable Trusts. The sliver of the population that is likely to use the services are those who already use alternative financial services like payday loans, the report found.​

Not everyone is on board with that proposal, though. Speaking at the Pew event, Rep. Darrell Issa​, R-Calif., said that often the type of low-income neighborhoods that lack bank branches also lack postal facilities, and that postal employees currently don't have​ the skills required to offer financial services. “You would be building from scratch,” he said. “If our goal is to have banking services for the underserved that is subsidized, then we can do better.” Instead, the needs of the underserved populations might be met by greater oversight of alternative financial services like payday lenders, he added.

While lawmakers continue to debate the merits of expanding the Postal Service’s purview, here are three things consumers should know about what it might mean for them if the post office became their bank:

1. Easier access to low-cost financial services, especially for those who currently conduct their financial business outside of traditional banks.

Williams noted in his remarks at the Pew event that financial products offered by post offices could be approved by regulators, meet Federal Deposit Insurance Corp. standards and avoid deceptive practices. Consumers wouldn’t have to worry that someone was trying to push them into an abusive product, and the postal service could be trusted and offer low and affordable prices, he added.

2. Greater competition when it comes to financial products, which could mean lower prices all around.

Adam Levitin,​ professor at Georgetown University Law Center, said at the event that if the Postal Service offered low-cost financial services, then it could potentially help to drive unfair products​ out of the market because people would opt for the fairer and safer product instead. Unfair products can include payday loans with extremely high interest rates or high fees for services like bill paying. 

Perhaps for that very reason – stiffer competition – the banking industry has voiced concerns over the concept of the Postal Service joining the financial industry. Jana Barresi,​ director of federal governmental relations for Wal-Mart, which currently offers an array of financial services to customers such as international money transfers and prepaid cards, said at the event that the company doesn’t have a position on the Postal Service proposal.

“More than 95 percent of the U.S. population lives within 15 miles of a Wal-Mart store, and many are open 24 hours a day,” she said, adding that Wal-Mart has money centers at about 1,000 stores, and other transactions can be done at the customer service desk. ​Bill pay services start at $1, and flat fees on money transfers help keep costs down. Money orders start at 70 cents at Wal-Mart, while the Postal Service money orders start at $1.25, she pointed out.

3. Longer lines.

The policy experts didn’t broach this topic at the Pew event, but it’s worth considering: With lines at some post offices already stretching out the door during holiday season and lasting a half hour or longer on typical weekdays, what will become of wait times if yet more services are added to employees’ plates? The experts at the event did not address that particular problem in detail.  ​

There’s also the convenience factor to consider. When you need to buy stamps, mail a package to a friend and also pay a bill, you could take care of all three tasks in one place under this proposal, which could end up saving you time even if you have to stand in a longer line to do it. 

A Bold Vision for the Future of the Postage Stamp

http://www.wired.com/2014/10/bold-vision-future-postage-stamp/

Canada Post ends home delivery today for thousands

http://www.cbc.ca/news/canada-post-ends-home-delivery-today-for-thousands-1.2805833

Canada Post stopped home delivery to 74,000 addresses in 10 communities across the country today, part of the Crown corporation's move to end all urban door-to-door mail service to five million Canadians in five years.

People in the affected areas will have to get mail from their local community mailbox.
Canada Post says it is phasing out home delivery, and cutting thousands of jobs, owing to financial losses stemming from falling mail volume and increasing use of digital communication. The corporation says Canadians mailed almost 1.2 billion fewer pieces of mail in 2013 than they did in 2006.

The addresses affected by today's changes include:

• 12,500 in Winnipeg.
• 10,450 in Calgary. 
• 7,900 in the Ottawa suburb of Kanata.
• 450 in Fort McMurray, Alta.

In Montreal's North Shore, people living in Repentigny, Rosmère, Lorraine, Charlemagne and Bois-de-Filion are included in today's change.

Canada Post hasn't been open with its employees about the decision-making surrounding the cuts, said Andrew Rosenfeld, a mail carrier in Lachine, Que.
  
"People don't really know what's going to happen, they don't know why it's happening," he said. "They're just not well-enough informed because Canada Post never asked anybody."

 

In Winnipeg, about 12,400 homes and 70 businesses in the areas covered by postal codes beginning in R2P and R2V are included in the changes.

Marilyn Loden, a resident of The Maples area of Winnipeg, said she is happy with the change.
"I'm away a lot so I have to get my daughter to come get my mail, where if I have it in a box, then it'll just be there when I get back," she told CBC News.

In Kanata, Ont., where about 500 community mailboxes have been installed, roughly 7,600 households and 300 businesses had their direct delivery service end today. The affected postal codes include K2K, K2L and K2M.  

Last week, the Canadian Union of Postal Workers teamed up with groups representing seniors and the disabled to launch a Federal Court challenge against Canada Post's decision to end home delivery.
The case will argue, in part, that the elimination of mail delivery violates Section 15 of the Charter of Rights and Freedoms, which guarantees equality rights for groups like disabled citizens.

The union placed a community mailbox in front of Parliament Hill on Monday to protest the changes. About a dozen union members attended the protest wearing hats that said Save Canada Post, CBC reporter Judy Trinh said. 

National president Denis Lemelin said the elimination of door-to-door delivery should be debated in Parliament.

Amazon is one of the only things keeping the US Postal service afloat

http://www.vox.com/2014/9/24/6829335/us-postal-service-post-office-charts-amazon-fedex-UPS

The US Postal Service does a staggering amount of work, when you sit down and really think about it: it delivers 158 billion pieces of mail per year, the vast majority of them on time. And it also has some staggering financial problems: the GAO reported earlier this year that the USPS has $100 billion in debt and unfunded liabilities related to retirees' pensions and health benefits.

All of those troubles have a lot to do with digital communications — it's quicker to send Grandma an email or even a text than a card — but there are plenty of other moving parts. Here are 9 charts that explain what's going on with the US Postal Service.

1) The westward spread of postal service

The US post office underwent some fantastic growth in its early years. In this video from data visualization pro Derek Watkins, you can watch the post office grow from 75 offices in 1789 to nearly 77,000 in 1900. The number of offices would peak in 1901, at 76,945, then start to decline after that with the advent of rural free delivery, which eliminated the need for many offices.



So while the USPS closes post offices today due to shrinking revenues and postal service usage, the decline in post offices has been going on for a century. As of 2013, the total number of post offices stood at 26,670. Since 2012, the postal service has closed 141 facilities as part of a cost-cutting strategy it calls a "network rationalization plan." While the USPS had planned on cutting more than 3,600 offices as of 2011, it eventually decided to instead slash hours at rural offices.

2) The fast death of your friendly neighborhood mailman

 

Of course, as the USPS grew, so did its ranks of employees. The number of workers skyrocketed as the population (and therefore number of customers) likewise grew, but in the last decade the postal service has aggressively cut back on workers. Today, there are just under 500,000 workers, down by around 300,000 from the nearly 800,000 there were in 1999.

The postal service has been cutting its workforce through attrition — simply not hiring people to replace its retiring workers, as Government Executive reports — and is also offering buyouts to some postmasters, hoping they'll retire early. But the agency could cut some of those workers through layoffs, if they do not accept buyouts or get other postal jobs. Postmaster General Patrick Donahoe has said he wants ultimately to shrink the workforce down to 400,000 workers by 2017.

3) The check is not in the mail

Starting in 1886, the first year for which continuous data starts to be available (though data doesn't exist for most of 1914-1925), the amount of mail the USPS handled took off, growing exponentially until around 2000. But then email and online bill pay helped drag mail volume down sharply starting in the mid-2000s.

4) Lots of work for far fewer workers

The number of postal workers may be shrinking, but the efficiency of the USPS has grown relatively steadily since 1926. Today, the USPS is handling nearly 325,000 pieces of mail per worker, compared to around 104,000 in 1926. And the trend is still upward, so even as the postal service has shrunk in the last few years, it has grown more efficient by this measure.

5) The ever-rising (but really quite stable) cost of postage

(U.S. News & World Report)

The USPS (through Congress) keeps ramping up the cost of postage, and with each hike, there is some degree of backlash. But when you adjust it for inflation, the cost of postage has been relatively stable since the 1980s and is in fact cheap today compared to the mid-1970s. The above chart from 2013 shows how much today's 49-cent stamp (then the "proposed" rate) would cost in comparison to the past. While it continued the upswing in the cost to send a first-class letter, it really didn't raise prices out of the ordinary.

6) Revenues vs. expenses

Starting in 1971, the USPS stopped receiving taxpayer dollars and became an independent agency of the US government. And in the last decade or so, the USPS's finances have gone from the black to the red. In 2012, the postal service lost a record $16 billion.

The internet certainly helped kill postal revenues, but the question of whether the USPS should have to undertake the costly step of prefunding retirement benefits is very controversial (see chart 8 for more). Congress in 2006 passed a law mandating that the USPS prefund pensions and health benefits for its retirees. The postal service and many of its supporters argue that it's silly to require the USPS to do this — no other government agency is required to do so, nor is any business. But proponents say it's necessary to keep taxpayers from eventually having to bail out the postal service.
What all of this really highlights is the odd no-man's-land that the USPS occupies, somewhere between being a business and a government entity. Congress has made it "independent" but still maintains heavy control over it. For example, Congress has nixed USPS plans to cut costs by cutting Saturday delivery. But then as the USPS cuts costs other ways and shrinks, it reduces service to many Americans, like those in rural areas. That raises the question of what sort of a postal service Americans have a right to.

7) Packages are helping the USPS stay afloat

The postal service isn't hurting on all fronts; in fact, its package business has been one bright spot for the agency. According to data from the USPS's 2013 annual report, package revenue grew by around 8 percent from 2012 to 2013. Partnerships with Amazon, FedEx, and UPS all are helping the USPS keep its parcel business thriving.

But it will take a lot of Amazon and eBay purchases to solve the postal service's fiscal problems. As the Wall Street Journal's Laura Stevens reported earlier this year, the postal service was designed for letters, not packages. First-class mail is simply more profitable than packages; currently, it takes around $3 in package revenue to make up for $1 in lost first-class letter revenue.

8) Prefunding retirements

(Government Accountability Office)

The US Postal Service has long railed against the requirement that it prefund employees' pensions and health benefits. This chart shows exactly how big those liabilities are (i.e., huge). As of 2013, the postal service owed nearly 1.5 times its annual revenues in retiree benefit funding.

9) Postal banking

(USPS Inspector General)

One plan the USPS has to boost its income is postal banking. In a proposal released earlier this year, the USPS inspector general pointed out that around one-quarter of all Americans are unbanked or underbanked — that is, they either have little or no access to financial tools like bank accounts or loans. That's a huge potential customer base, and the plan could benefit both the post office and poor Americans who rely on expensive payday loans. The above chart is an example from the proposal of what loans from a post office would look like — i.e., much less predatory than those from a payday lender.

U.S. Mail Delivers Amazon Groceries in San Francisco

 

http://online.wsj.com/articles/u-s-mail-to-deliver-amazon-groceries-in-san-francisco-1409854499

U.S. Mail Delivers Amazon Groceries in San Francisco

USPS Is Aggressively Chasing Bigger Piece of E-Commerce Pie

An Amazon Fresh delivery truck in downtown Los Angeles. Amazon also is using the U.S. Postal Service for a grocery-delivery experiment in San Francisco. REUTERS

Amazon.com Inc. and the U.S. Postal Service, already partners in Sunday deliveries, have launched a trial to shuttle insulated containers of meat, dairy, produce and other groceries to San Francisco customers' doorsteps. The test could presage a broader national rollout, giving Amazon's grocery drop-off service a much wider reach.

Through its AmazonFresh unit, the e-commerce giant today delivers groceries in its hometown Seattle, as well as Los Angeles and San Francisco. It is expected to introduce Fresh to additional markets in the coming months: Amazon lists job openings for produce-handlers in Avenel, N.J., about 25 miles outside Manhattan.

If successful, the two-month test could provide a boost to the Postal Service, which has aggressively chased a bigger piece of the e-commerce pie as the Internet chips away at other parts of its business. Its package business is up 20% over the past five years to 3.7 billion packages.

The Postal Service said it is testing AmazonFresh deliveries "to determine if delivering groceries to residential and business addresses would be feasible from an operations standpoint and could be financially beneficial for the organization."

A spokeswoman said the USPS is making the drop-offs between 3 a.m. and 7 a.m.; few of its trucks are in use at those hours. Because Amazon uses insulated tote bags for perishable groceries, the agency can make deliveries without the benefit of refrigerated trucks.

An Amazon spokeswoman said, "We are always looking for new and innovative ways to deliver packages to customers."

AmazonFresh offers more than 500,000 items, from groceries to books, videogames and paper towels, to be delivered at scheduled times or during three-hour blocks. Deliveries usually cost between $7.99 and $9.99, but are free for orders of $100 or more. A $299-per-year membership lowers the free-delivery threshold to $35 and includes unlimited shipping of Amazon.com goods.

Amazon has been leaning on the Postal Service for more of its regular deliveries, dropping off packages at local post offices for letter carriers to deliver to the door. The USPS also has an exclusive contract with Amazon for Sunday shipping in about two dozen U.S. cities, a service expected to expand to new markets in the coming months.

The 60-day grocery-delivery test started in early August, according to the Postal Service, and is limited to the San Francisco area.

In an interview in April, Postmaster General Patrick R. Donahoe said the agency would like a piece of the grocery business.

"We work with Amazon. They're an excellent, excellent customer and an excellent partner. We'd like to deliver their groceries," Mr. Donahoe said. "As the Postal Service, we visit every house, every day. Why not?"