Dec 11, 2013
Canada Post today released an action plan to form the foundation of a new postal system. Read the Canada Post news release or the plan itself, or watch a short video overview at canadapost.ca. A brief summary of the major components of the plan can be found below.
Magazines Canada has responded to CPC's announcement by saying that we are prepared at all times to work with CPC on achieving mutual goals.
Magazines Canada will review the new information and will respond to the action plan soon.
Earlier in the year, we had indicated an interest in advising on the way new community boxes are designed, so that Canada Post customers will receive their preferred mail—unarguably magazines—in top condition. (Please see "Magazines Canada Comments on the Future of Postal Service in Canada," and our full July 2013 response to Canada Post.) In those comments, we also acknowledged the increased effort by CPC staff to resolve the challenges involving UPMs, challenges that are very costly for magazines and for Canada Post.
The action plan reflects feedback from over five months of consultations by Canada Post in 46 communities across Canada and online. As outlined in an email received from Canada Post, "Canadians told us that they live busy lives and want more convenience, especially as online shoppers looking to Canada Post to deliver their parcels. They also told us they are communicating and managing bills online and need us less for Lettermail. Finally, they were adamant that they do not want to support Canada Post with taxpayer funding. The implementation of this plan means Canada Post can return to financial sustainability by 2019."
The integrated plan's five main initiatives are:
1. Community mailboxes: The one third of Canadian households that still receive their mail at their door will be converted to community mailbox delivery over the next five years. (The other two thirds already receive their mail and parcels through community mailboxes, grouped or lobby mailboxes or curbside rural mailboxes.) Community mailboxes offer individually locked mail and small packet compartments as well as larger locked compartments for securely receiving parcels. Delivering to a community mailbox is much less expensive than delivering to the door.
2. A new approach to pricing: Canada Post will introduce a new tiered pricing structure for Lettermail, which will better reflect the cost of serving various customer segments. Stamp prices will increase, but there are discounts for customers that use the mail most.
Prices for parcels and for addressed and unaddressed advertising mail are not affected by the Lettermail increase. They will undergo a normal rate action in January.
Customers that buy stamps in booklets and coils will pay $0.85 per stamp, up from $0.63 today for letters 0-30 g mailed within Canada.
Only 2% of stamps are purchased individually. For this small segment of single-stamp purchasers, the price of a stamp will be $1, up from $0.63 today. The vast majority of stamp purchases will qualify for the rate of $0.85.
3. Expanding convenience through postal franchises: Canada Post will open more franchise postal outlets in retail businesses. This will offer busy Canadians greater convenience, with better locations, evening and weekend hours and parking, and allow them to do more of their shopping in one place.
4. Streamlining operations: Changes to internal operations will make for a more efficient flow of parcels and mail through the network.
5. Addressing the cost of labour: The company will continue to bring its labour costs in line with its competitors through attrition and collective bargaining over time.
Once fully implemented, four of the five initiatives are expected to generate financial benefits with an estimated combined worth of $700 million to $900 million per year.
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