Temporary Thaw in Canada Post Labor Dispute

Picture1The Toronto Globe and Mail reported this weekend that talks between Canada Post and the Canadian Union of Postal Workers have resumed. Canada Post has withdrawn its lockout notice and cleared the way for “serious negotiations.” In return they asked the union to make on its promised to not issue a strike notice.

The situation is obviously in flux but it was certainly good news that today’s deadline for a lockout has come and gone, and the two sides are heading back to the bargaining table. As this has dragged on for seven months at this point, let’s hope some significant progress can be made soon.


Economy and Technology Not Main Villains in $16 Billion Postal Service Loss

Throwing Money AwayLast week, the Postal Regulatory Commission released their Annual Compliance Determination Report (ACDR) from the 2012 fiscal year.  This report highlights legal issues, the financial condition, and overall performance.

In an opening letter from Chairman Ruth Goldway, a breakdown is provided that sheds a dim light on the Postal Service’s financial woes.  With a loss of $16 billion in 2012, many may be curious as to how this is possible.

$11.1 billion of the loss was from required pre-paid expenses to the Retiree Health Benefits Fund (RHBF).  For the first time since funding the RHBF was legally mandated in 2006, the Post Office has defaulted on this payment.  The RHBF directly relates to the Postal Accountability and Enhancement Act (PAEA), which requires an additional $33.9 billion be paid to the RHBF by 2017.  This includes the $11.1 billion that the USPS has already defaulted on.

In a feature titled “How Healthcare Expenses Cost Us Saturday Postal Delivery” in Time Magazine, Reporter Josh Sanburn stated that paying the RHBF was possible in 2006 when the post office was healthy.  Sanburn also points out that the Post Office was hit hard by a shift in digital communication and the financial recession since 2006.

If the Post Office was not forced to contribute to this fund, the deficit would only be around $5 billion.  The ACDR reported that $2.4 billion of the remaining deficit was due to a workers’ compensation liability adjustment and the other $2.4 billion was from operating losses.

In the ACDR report, Goldway also stated that the Postal Service cannot adequately support needed innovations and will now need to focus on cutting costs.  On page 27 of the report, the Commission said that while the RHBF expenses don’t impact day to day operations, the Post Office could “successfully operate without paying toward the RHBF.”

Echoing what Sanburn reported in February, the ACDR also took notice of the permanent change in mailer behavior rather than defaulting that fiscal woes could be caused by the economy.  The Commission continued by stating that the increase in internet access, structural changes in advertising markets and the use of social media should also be taken into account when assessing the 5.8% decline in Standard Mail or other operating losses.

Enhanced by Zemanta

US Postmaster Proposes 5-Day Mail Delivery

Mail Trucks, Pittsfield MA

Image by Bennett V via Flickr

In a recent interview with Lisa Murphy on Bloomberg Television’s “Fast Forward,”US Postmaster General Patrick Donahoe explained the looming financial problems facing the United States Postal Service, and discussed a proposal to reduce mail delivery to 5 days, withdraw from federal health-benefit and retirement programs, close 3,700 post offices, and eliminate 220,000 jobs by 2015.

Watch the interview: http://wapo.st/qkT10U

USPS Decides Not to Request Exigent Rate Increases for January 2012

As was discussed recently in a post on August 8 (USPS Seeking Rate Increases for January 2012), the USPS asked the Postal Regulatory Commission in July for permission to impose exigent rate increases in January 2012. This increase would have amounted to 4% over most classes of mail.

Old Post Office detail

Image via Wikipedia

Currently, annual rate increases capped by the Consumer Price Index are permitted but exigent increases higher than the rate of inflation require permission from the PRC. US Postmaster Patrick Donahoe now states that USPS will only pursue the case to get a ruling on whether or not exigent increases are actually allowed. The USPS still plans to proceed with rate increases capped by the CPI in January, to the tune of around 2%.

Read more at Dead Tree Edition http://bit.ly/oeE2ge

Enhanced by Zemanta

USPS Seeking Rate Increases for January 2012

USPS Truck

Image via Wikipedia

The USPS has filed with the Postal Regulatory Commission requesting permission to impose exigent rate increases in January 2012. The increase would amount to 4% over most classes of mail. A similar attempt to increase rates by up to 5.6% was rejected by the PRC in the summer of 2010.

Read the full story at  http://bit.ly/pPCMKe.

Enhanced by Zemanta