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Sunday, May 29, 2011

Canada Post faces big challenges in digital world - Some experts say the Crown corporation needs to expand services to survive:

Canada Post is struggling to reach a deal with its employees. The threat of a strike again hangs over the nation's postal service.
                Does anyone care? In an age of email and Internet banking, just how relevant is snail mail delivery to Canadians anyway?
                Canada Post -- once the only affordable means of long-distance communication in Canada -- faces several challenges as it tries to remain a household name.
                Some experts say the Crown corporation needs to widely expand the services it offers in order to survive, while others contend it's time to at least partially privatize mail delivery, following the example of several other countries around the world.
                There's no doubt the volume of mail being delivered to Canadians is decreasing. According to Canada Post's 2009 annual report, Canadian households received an average of 334 addressed letters in 2009 compared to 377 pieces of mail in 2005. Canada Post predicts the physical mail delivery market will continue to decline.
But that change is something relatively recent, said Robert Pike, a professor emeritus in sociology at Queen's University in Kingston, Ont., who has written on postal history.
                Mail delivery was a fundamental -- and cheap -- means of long-distance communication up until the 1960s, he said. "It was very important for national development," Pike said. Postal service allowed settlers in remote communities to receive newspapers from outside and keep in contact with family in other parts of the country. "People petitioned to have post offices in their areas."
                Canadians still use the postal service for mail, such as bills, but its use as a personal means of communication is limited now to special occasions such as Christmas, when people send cards. Internet and cheaper telephone costs have largely replaced the mail, he said.
                Kathleen Rowe, president of the National Association of Major Mail Users, said that, despite the perceptions of some, snail mail is about much more than personal communication. It's still widely used by the banking and insurance industries. They still rely heavily on paper-and-ink mail, she said, because surveys have shown their clients prefer to receive information on paper. Bills (known as "transaction mail") made up more than half of Canada Post's revenue in 2009.
                And who doesn't like getting a card or hand-written letter in the mail? Bianca Gendreau, a curator at the Canadian Museum of Civilization in Ottawa, conducted research with Canadians, all of whom said that the "personal touch" that comes with a piece of personal mail can never be matched by an e-card or text message. Canadians tend to send important messages such as wedding invitations or birthday cards in the mail precisely because of the effect it has. The volume of snail mail in our mail slots might be smaller, she said, "but what you get is more special."
                There are still endless possibilities for using the mail for marketing purposes, Rowe added. Parcels and admail each made up 22% of Canada Post's revenue in 2009.
                "Postal service, not only in Canada but elsewhere in the world, is changing," Denis Lemelin, national president of the Canadian Union of Postal Workers, told Postmedia News.
                Lemelin said Canada Post needs to adapt as Canadians buy more goods online or send more email.
                He said Canada Post should expand to offer banking services, for example, and take advantage of its countrywide network of postal counters while still remaining a public service.
                Some go even further.
                Vincent Geloso, an economist at the Montreal Economic Institute who recently authored a paper on Canada's mail delivery system, suggested Canada Post should follow the example of postal operators in Europe and open up competition in letter mail delivery.
                As the dynamics of the postal industry change, Geloso said, postal operators need to provide better quality services and new ways of delivering mail, and they must do so at a lower cost to consumers.
                Geloso pointed to examples in Europe where Germany, Austria and Sweden have allowed private firms to compete in delivering letter mail. Prices have declined, Geloso said, while efficiency has increased.
                "There's no reason it can't be done for snail mail," Geloso said. "We continue to develop and explore a number of projects that would leverage our competitive edge. No one else in the country has the reach we do," a spokesperson for Canada Post told Postmedia News. The corporation is attempting to innovate through new online tools such as the Comparison Shopper, iPhone apps and its "epost" service, which allows its seven million registered users to pay their bills via the Canada Post website.
Source:, May 28, 2011

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