CP to post $billion loss

[tobyshitzu]

Canada Post operating loss to hit $1 billion by 2020

http://www.thestar.com/business/2013/04/23/canada_post_faces_1b_annual_operating_loss_by_2020.html

[pierrelebel]

Maybe Tom has a solution to avoid such huge loss.

[toff3]

Yep, I have the perfect solution:

PRIVATIZE CANADA POST

All kidding aside, leaving CP to muddle on is definitely NOT the answer. All CP will do is continue to raise the cost of mailing and the losses will still pile up because a major cause of CP's problems is high labour costs. One way to reduce them is to privatize.

Of course, because of inexorably declining mail volumes, privatization is only half the answer but at least CP's losses will be smaller.

Tom 

[pierrelebel]

"I have the perfect solution:

PRIVATIZE CANADA POST"

????

To privatize Canada Post requires the private sector (investors) to purchase and pay for its assets, its business.  Who in their right mind would invest billions of dollars to lose money, year in, year out?

Mel Lastman in Toronto has the answer: NOBODY.

The last privatization of a large Crown Corporation: Air Canada -

"25 years ago this week former Deputy Prime Minister Don Mazankowski stood up in the House of Commons to announce the Conservative government’s intention to privatize Air Canada. Canada’s national airline was facing financial difficulties associated with an aging fleet of Boeing 727 jets, and soaring competition from deregulation south of the border.

In the summer of 1988, after the passing of Air Canada Public Participation Act, the federal government sold 45 per cent of its interest in the Crown corporation. The Conservatives released the rest of the shares one year later. But going public did not go as smoothly as planned. The company has been plagued by a boom-and-bust cycle of productivity. According to the Canadian Auto Workers union, Air Canada has lost more than $6 billion since 1989."

As we all know, Air Canada filed of bankruptcy in 2003 and the investors who put billions in shares of Air Canada lost everything.

The company was re-organized, found new investors, and these folks have seen their shares go from $20 to less than $3 six years later. 😞

Talk of privatization for Canada Post is easy.  Too easy.  It forgets someone will have to put billions to acquire the corporation, take control of its assets (over $7 billions) and assume its liabilities (including almost $6 billion is pension plan deficit).  By law, current union contracts are protected in case of change of ownership.

Overview: http://www.canadapost.ca/cpo/mc/assets/pdf/aboutus/annualreport/2012_AR_Overview_en.pdf 

Financial report:

http://www.canadapost.ca/cpo/mc/assets/pdf/aboutus/annualreport/2012_AR_financial_en.pdf 

Any taker out there? .

[treasure.hunter.d]

My letter carrier has a route that is total about 10 blocks. There used to be boxes on the route where he would pick up the mail and then deliver it and by the time he got to the next box he was pretty much empty and would fill his wheelie cart again and carry on. Then my old letter carrier retired and I got a new one. Remember now, I said the route is about 10 blocks in total. The new guy no longer has a wheelie cart and the pick-up boxes are gone. The new guy now has a minivan/mini-truck to do 10 blocks. My mail used to be delivered by 2 or 2:30 at the latest. Now, with the new guy and his truck there are many days my mail doesn't show until after 5pm. Some days he doesn't even show up at all, I kid you not. I have complained so many times and even to my local MPP and nothing gets done. I have had more mail just up and disappear in the last year than I have had in the last 20 years.

Canada Post loses money because their employees are a bunch of lazy, thieving union slobs, plain and simple. Privatize it or nothing will change except for the worst.

[pierrelebel]

"to my local MPP..."

Try your local MP (federal) next time.

Canada Post is a federal crown corporation and the MPP (provincial) has nothing to do with it.

[dipmicro]

Liabilities are way too high, labour costs are are set in stone and going up, privatization may not be as lucrative with all this heavy baggage. Perhaps government will just let it die and then parliament reforms the postal service by appointing different organization into national mail delivery agent.

[postit4me]

Perhaps someone wishes to explain how Canada Post on October 7, 2012 could afford to hand out bonuses to 7700 PSAC and APOC employees plus 23 directors and CEO to the tune of millions while reporting huge losses?

When MP Brian Masse Windsor West asked for Canada Post to open its books for an independent audit, Canada Post replied no can do competition act? What are you kidding? The Federal Government is NOT in competition with Canada Post, they should have to open their books. Each Canadian citizen should ask for this and why haven't you if you are concerned?   SILENCE IS ACCEPTANCE.

If you follow the link provided you will see in the comments that the CEO of Canada Post is also on the Board of Directors of this report - HUM sounds bias! 😮

[rosscd57]

What link?

[postit4me]

The one at top of this tread

[art-in-the-making]

The future???

http://www.flickr.com/photos/chris999/8080316097/

In case you don't want to click the link, it shows an ambulance in England that has "DHL working in partnership with NHS". Apparently that's the National Health Service there.

I read elsewhere that DHL was also one of the main suppliers (or, as I read somewhere, the "only" supplier of  non-pharmaceuticals, if you can believe that) of general goods to the NHS. In other words, the multinational corporation that owns the German post office is also well on its way to taking over huge portions of health care in the U.K.

If there was ever a foolproof recipe for a "big brother" type nightmare scenario to evolve I would say this is it. Extreme no-holds-barred privatization and monopolization of everything for the profit a minute few.

---

Unfortunately, notwithstanding Pierre's vivid portrayal of the profit potential of privatized services in Canada, I am sure there would be ample opportunities for structuring a privatization deal for the post office that would guarantee a loads of profits by cutting services and salaries, outsourcing, etc.. 

The more I hear about Europe, the less I want anything to do with free trade with them.

[toff3]

I don't see what relevance the privatization of Air Canada has to the privatization of Canada Post. Anyway state-owned airlines now belong only to banana republics.

Certainly, privatization of CP would be a huge undertaking but is there a viable alternative? I don't see one...but something drastic has to be done.

The Conference Board, on whose report the news item that Toby posted is based, pussyfoots around the question of privatization by not even mentioning it, perhaps not surprisingly given that the report was commissioned by CP. In contrast, the C.D. Howe Institute is gung-ho for it.

Tom

[art-in-the-making]

Privatization would only be done as a piecemeal, half-baked solution, where the remnant of the PO would be a stacked deck sweetheart deal with the unique mandate to print money for shareholders.

So one option would be to work backwards from a range of what are probably foreseeable end results - but under a continuing crown corporation scenario. This would give management the power to consider more variables along the way, with a mandate that would actually include delivering mail and other related services.

Another option would be to look at some more outside the box solutions.

[bluldr306]

with such inflated shipping charges how is that even possible

[altimateoutlet]

Our mail man drives around in a new vehicle, shows up sometime during the day, has 7 weeks holiday, every statutory plus day off, sick days that he can bank and a pension funded by the tax payer that everyone not working for a goverment entity is paying for but not entitled to.

I would look at privatising one province at a time starting with NFLD.

BTW: since Toronto has gone private with garbage pickup west of Yonge, The service has never been so good.  Prompt ,on time, clean and the boys even leave our garbage can upright.  I have never told a group of people so often how I have appreciated their performance.

[art-in-the-making]

altimateoutlet, you're not looking at the big picture.

Even if there was something actually excessive or unusual in the compensation you mention, you, like many Canadians, are looking at the issue from a jealousy/envy perspective or from a vindictive/angry perspective. 

Something very close to the type of compensation you mention should be considered a minimum for any Canadian, regardless of hours worked, qualifications, or any other random factor.

If people could rely on a basic level of income and opportunity, they would be much less likely to turn to crime, drugs, etc., etc. And far less businesses would be reliant on scams, misleading the public and so forth, as many, if not most are.

Do you not agree that, given a reasonable opportunity and prospect success, 99.9% of Canadians would be able and willing to prove themselves as valuable and diligent and worthy of a decent wage as anyone else.

altimateoutlet if you and certain others would get your wish, and a large number of Canadian workers (including postal workers, government employees and many others) were reduced from a basic living wage to a minimum wage scenario - the result for the economy would be devastating.

Another fact readily acknowledged by the "privatization" champions is that there is no way that privatization would ever result in lower prices.

[altimateoutlet]

Art

In a perfect world!

Private may not be the way but I don't think 99.9% of Canadians want to pay for a grossly over employeed, over paid organization that cannot deliver or produce in a timely manner and holds the country hostage ever time someone barks!  

Thankfully the post offices are going private ie: shoppers etc. It was painful to go a post office and see all the posties sitting on their a...es!

[art-in-the-making]

However much anyone bad-mouths the post office, I have yet to see anyone on this message board admit they honestly believe postal rates would be any lower with privatization. There'll be cut services, cut jobs, cut wages and prices will go up in general and probably double for a lot of stuff. They'll be like our phone and cable companies. Most expensive in the world with poor service and tech support in Asia.

what is grossly over-employed?

The postal workers are making a fraction of what a lot of people make who never even have to lift a finger, let alone load boxes in -20 weather and drive around cities in snowstorms, etc.

I will say that whenever I have been forced to use the couriers I have had poor experiences just about every time. It should be added that whenever this topic comes up and there are one or two people who say they get a good deal with couriers, etc. I think, yeah, maybe give them a try again.. But alas, no. I find the couriers' systems are set up for their own convenience, not the customers and there is a litany of problems I run into every time I have to ship with them.

[rose-dee]

When a living wage was $2.50/hr. and your friendly neighbourhood postie delivered mail to your door (including on Saturdays!), it was probably easier for Canada Post to stay in the black and still keep up all the services we came to expect.  However, they have armies of workers who were able to retire at 55 on fairly generous pensions over the last 20 years or so (and continuing to retire on pensions), and are locked into paying current workers a decent modern wage, with all the usual union protections.  It seems to me the only area Canada Post can make cuts is in service, and the only area it can increase revenue is in raising prices.

I would rather see CP remain in the hands of the federal government, than have it run by a private company, assuming anyone would want it.  I can't personally say I've had complaints about CP's service overall.  I would rather pay a little more and have confidence that my letter or parcel will be delivered, reasonably within the times specified.

Canada Post has in my own experience always been reliable and trustworthy; I can't recall more than a couple of complaints I've had about service in many years.  And trustworthiness is a big issue, IMHO, where delivery of important, personal, and/or confidential mail is concerned.

When CP first began to install the "community boxes", everyone griped loudly but soon got used tomaking it part of the day's routine to stop at the box on the way home.  I expect elimination of rural service will be next, and higher prices will continue to be inevitable, but I for one will give up delivery to the end of my driveway in exchange for keeping CP alive.

Yes, posties do earn a good wage and have a lot of protections.  However, we should remember that those wages go back into the community by way of taxes, consumer spending, etc., and I would expect this effect is spread out over the entire country, in every little corner, not just concentrated in a major centre.

Some people feel that postal employees don't work hard enough, but my own experience has been that they get the job done in a timely fashion, are generally efficient at what they do, and some of them even do it with a smile.  Many work under conditions a lot of people wouldn't (or couldn't) put up with, either in noisy, busy sorting stations doing repetitive tasks, or delivering your mail to you.  Our own postal delivery lady is out there on her rural route in some of the foulest weather, when absolutely no one else is on the road.  It may not be dedication, but it's professionalism: she knows people are relying on her, and she gets her job done.  

The fact is that it's becoming a "self-serve world" in so many ways and in so many spheres.  Companies can no longer afford to pay real people to cater to us individually.  Maybe the answer is that both Canada Post and its customers will have to be a little more flexible in their approach to service.

[recped]

BTW: since Toronto has gone private with garbage pickup west of Yonge, The service has never been so good.  Prompt ,on time, clean and the boys even leave our garbage can upright.  I have never told a group of people so often how I have appreciated their performance.

I'm also West of Yonge and agree with your comments 100%.

On the other hand I don't know if the city got a good deal on this privatizing, if they didn't I'll probably never know because the extra costs will get buried in my property taxes. With Canada Post, should it be privatized you will know the first time you mail something and see the rates increase even more dramatically than they have in recent years.

For those who think a fully private postal service is the answer look no further than FedEx/UPS/Canpar, their service is no better on average than Canada Post and worse if you don't happen to live in the large populated areas. The rates are certainly not low unless you have huge volume and the rates on International services for small packages are very high.

I don't understand how anyone in the mail order business could think that a fully privatized post office would be a good thing. If they did then they should already be using private carriers and not concerned at all what happens to Canada Post.

What Canada Post should be doing is leveraging their retail network for use in complimentary businesses, they have far an away the largest B&M presence and the only one that is truly national. They also need to become much more active outside of Canada like other national postal services are.