International Postal Update — July 2011



Labor unrest hits Canada Post. Following 12 days of rotating strikes in early June in several Canadian cities and a June 15 lockout by Canada Post, Canada’s Conservative-controlled parliament passed legislation June 26 ordering the nation’s 48,000 postal employees back to work. With unpredictable work stoppages making it difficult for major mailers to organize alternative delivery — much of Canada’s mail is cross-border to and from the United States — unions had hoped to force businesses dependent on mail to put pressure on Canada Post and the government to settle on union terms.

Talks between the Canadian Union of Postal Workers and Canada Post have been ongoing for several months, and the conflict swept into Canada’s House of Commons where the opposition labor-backed New Democratic Party filibustered for 56 hours prior to the vote against what they called “government interference in the collective bargaining process.”

On June 13, Canada Post began delivering letters just three days a week to save on labor costs. And on June 18, the U.S. Postal Service stopped accepting mail for delivery to Canada because of the strikes. The moratorium on U.S. letters bound for Canada ended ten days later; the backlog will be released in stages.

Canada Post has produced small operating profits, which the union claims justify contractual annual wage increases beyond what the Post is willing to offer. The Post is concerned with a looming C$3.2-billion pension deficit, rigid union work rules, rising costs of disability and chronic absenteeism, and staffing reductions in the face of inexorable declines in mail volumes. Officials claim that mail volumes have decreased 50 percent since the strikes began. Nevertheless, Canada Post has shelved plans to hire more part-time workers.


A bill to privatize Royal Mail advanced through the British parliament on June 9, and the government hopes that the privatization process will be completed by March 2012. Royal Mail’s Chief Executive reported in June that the service is in “significant financial difficulty,” having lost the government £258 million last year.

The European Commission will have to approve the British government’s plan to inject a subsidy of up to £10 billion of taxpayer money into the business to cover its £8.4 billion pension deficit and to pay off existing government loans of £1.7 billion. Postal services minister Ed Davey promised that at least 10 percent of the shares in Royal Mail will go to employees.

Opponents of privatization claim that management has driven profits down with massive investments in “modernization” that have not lived up to claims. They allege that Royal Mail will be a steal for a buyer, a huge loss for taxpayers, and a bonanza for connected inside investors. Steve Lawson, the editor of British postal news website Hellmail, said that to “sell off the profitable areas of Royal Mail Letters and dump the debt on the electorate could hardly be described as a triumph. With higher stamp prices, and a £10 billion debt, we’ll be paying through the nose for a service we no longer own.”

Meanwhile, with mail volumes in Britain continuing to decline roughly 5 percent each year and the letter and parcel business losing £2 million a week, Royal Mail is said to be considering cutting around 20,000 postal jobs.


The Universal Postal Union’s S42 initiative to standardize mailing addresses worldwide is moving forward. A Bangkok summit of eight Asian nations in June marked the beginning of a process which will move a majority of the world’s population under the initiative’s standards.

The software-based project will allow for keeping all addresses worldwide in a single, common database. The result will permit corporate mailers to compare files quickly and accurately and lower international mailing costs. A unified system of mapping physical paper-mail addresses remains a multibillion-dollar concern for letter and parcel delivery. Anywhere from 2 percent to 15 percent of mail is lost as a result of international undeliverables as addressed (UAA). The program will move towards a resolution on the agenda at the 2012 Doha Congress of UPU members.

International Postal Update