International Postal Update — October 2011


The Canadian Union of Postal Workers is challenging the federal law that forced workers back on the job at Canada Post. Canada’s conservative government ended June’s labor dispute between the Post and the union with the imposition of back-to-work orders. The June order, coming on the heels of rotating work stoppages and finally a lockout of workers by Canada Post, actually imposed a wage settlement lower than that offered by management. The law ratchets up workers’ salaries by 1.75 percent in 2011, by 1.5 percent in 2012, by 2 percent in 2013, and by 2 percent in 2014.

The union was displeased with the outcome. A government arbitrator has yet to finalize the dispute. He will choose from two offers: one from the union and one from Canada Post. However, the arbitrator may not touch the wage settlement. Unions maintain that any order restricting their right to strike is a violation of the right to freedom of association protected by the Canadian Charter of Rights and Freedoms.

Both sides dispute the actual costs of the strike. The Post estimates that the work action cost it CAN$167 million. Second quarter results indicate that Canada Post delivered 80 million fewer pieces of mail, 6 million fewer parcels, and 180 million fewer pieces of direct mail compared to the same period last year. That resulted in CAN$35 million in losses for the Post for the quarter. When added to the financial results of the other portions of Canada Post Group — which includes a logistics division and a majority share of courier company Purolator — total losses reached CAN$17 million in the second quarter.


Postcomm, the United Kingdom’s postal regulator, received several applications for postal licenses in August. The regulator claims that it is interested in approving new postal operators if they’ll promote competition and avoid having adverse effects on universal postal service. As of September, some 59 entities were currently licensed, including Royal Mail.

In August, the regulator removed bulk mail products from the universal service obligation. Bulk mail will no longer be exempt from VAT and could be delivered five days a week, as opposed to six. The move may be among the regulator’s last official duties, as postal regulatory responsibilities shift to Ofcom — the country’s communications regulator — on October 1.


India Post is investing Rs. 19,000 crores ($3.88 billion) integrating banking, insurance and other services within its postal network. With over 155,000 post offices and close to 600,000 employees, India Post operates its financial services as an agency function of the finance ministry. It has begun actuarial work to lay the groundwork for shifting its regulatory oversight and has called for greater autonomy to expand its financial services business. The integration push is tied to a wide-ranging initiative to computerize and bring online all postal facilities in India. Officials say the project will be completed in two years.

The Post’s Rural Postal Life Insurance is a significant player in the insurance market, selling 1.9 million “micro policies” (with values below $550) in fiscal 2010. It currently has the authority to distribute private insurance products through its network. Insurance represents 5 percent of India Post’s revenues. The Post also holds savings accounts for 200 million people.


Postal workers join other public-sector unions in shutdowns. Dissatisfied with low wages, continuing employment of corrupt Mubarak-era managers and their connected relatives, and what the unions say is the inability of the new Egyptian government to “break with the past,” postal workers shut down 50 percent of post offices across the country at the beginning of September. Workers are said to resent the relatively high compensation awarded to consultants throughout the postal system. According to one spokesman, “The Postal Authority is not only a solvent entity, it is actually quite profitable. Their savings accounts operation brings in LE62 billion annually, which the authority invests in banks.” Workers believe that whatever profits the postal system achieves should not be siphoned to fund national development projects but should be turned back to increase wages in the postal sector.

International Postal Update