Canada Post Door to Door Delivery Analysis

Author Note: The charts and graphs, and additionally part 4 are unavailable. Unfortunately, the copy and paste from my word document that I submitted for my class assignment did not copy and paste properly into this post. Hopefully it still make sense for anyone who takes the time to read. Thank you.

Part One: Executive Summary:

The Canadian Government announced prior to the 42nd election, that their crown corporation Canada Post would end door to door mail delivery. The Conservative government planned to replace door to door delivery service with community mailboxes. Newly elected Liberal Prime Minister Justin Trudeau announced he would stop the plan to end door to door service.

My research will investigate the financial records of Canada Post, and determine if it makes financial sense for Canada Post to continue with door to door service. Or if Canada Post needs to end door to door service and go ahead with the prior government’s plan to end the service and replace it with community mailboxes. I will also offer a third option that attempts to balance the concerns of the government, public and union in an attempt to provide the best alternative for each stakeholder. I will review the publically released financial statements for the past several years, reviewing changes in revenue and net income. By looking at those numbers, I will be able to make a determination at what the best course of action is for the Canadian Government.

The story will continue to be newsworthy until a final decision is made by the Canadian Government. As traditional mail becomes a less popular method of communicating, Canada Post will have to find alternative ways to remain profitable.

Part Two: Contextual Research:

Large portions of this section is from the contextual research assignment submitted earlier. However changes have been made to include more context and the information I was missing as I did not see the second sheet on my learning space for the assignment.

Section One: Issue within the News:

  1. Geographical Context:

Article from The Times Colonist discusses how some communities were put on hold following the statements of Trudeau. However, it also talks about how Sidney, British Colombia had community mailboxes fully installed in the city and will not be getting door to door service anymore, regardless of the liberal’s decision.

http://www.timescolonist.com/business/canada-post-s-halt-on-community-mailboxes-too-late-for-sidney-1.2096373

  1. Contextual Relationships:

Local postal workers union pleased with the decision to continue door to door delivery. This provides context by showing what large stakeholders the union are in any decision made by the Canadian Government.

http://www.ngnews.ca/News/Local/2015-11-01/article-4329345/One-battle-down,-more-to-go%3A-Canada-Post-union-representative%26nbsp%3B%26nbsp%3B/1

  1. Political Context:

The follow article looks at the idea that tax payers are the only reason Canada Post exists. The article states that eliminating door to door service would eliminate 8,000 jobs. The context added is the stances taken by both Harper and Trudeau and also brings to light the amount of people who would be out of a job.

http://www.torontosun.com/2015/11/01/taxpayers-on-hook-to-save-canada-post

Section Two:

  1. Canada Post 2014 Financial Statement. This adds context to show that Canada Post is turning a rather sizable profit in its most recent year ending statement.

https://www.canadapost.ca/assets/pdf/aboutus/financialreports/2014_ar_complete_en.pdf

  1. Business Context:

Quarter 1 and 2 reports from Canada Post. The quarterly reports add context by being the most update financial information. By using this reports I can see if past years financial trends are continuing. Or if they differ largely from the past few years. This is one of the main areas of research.

https://www.canadapost.ca/assets/pdf/aboutus/financialreports/2015_Q1_report_en.pdf

https://www.canadapost.ca/assets/pdf/aboutus/financialreports/2015_Q2_report_en.pdf

  1. A series of blogs from the Canada Post Union that follows their coast to coast campaign that protests cuts to Canada Post. This provides context, as it shows the Union fighting for the potential job loss should the government move to the community mailbox delivery system. Further areas of research are looking into the number of employees that Canada Post employees. Second, would be to attempt to find out how many jobs would be loss if the Canada Post moved to Community mailboxes which would eliminate many delivery jobs.

http://www.savecanadapost.ca/en/node/5287

Canada Post 5 Point Action Plan:

The pdf provides a lot of context to how many Canadians are effected. Only 32% of the 15.7 million addresses are effected by the proposed change to community mailboxes. Plan to spend $25M yearly to ensure these mailboxes are safe during the winter months. Saving more than 2 million work hours per year.

https://www.canadapost.ca/cpo/mc/assets/pdf/aboutus/5_en.pdf

Part Three: Data Analysis:

The following 6 graphs will be used to illustrated revenue, net income and volume over several years and quarters. From the graphs, people will be able to gain a better understanding of the operational success of Canada Post. This graph illustrates how Canada Post revenues have increased nearly every year.

The second graph looks at the net income of Canada Post over the past decade. Unlike revenue which was rather consistent on a year by year basis, net income was highly variable. Canada Post turned a profit in eight of ten years, but are trending negatively. Interestingly the first year and tenth year are the two closest years in net income, separated by only one million dollars.

The third graph illustrates the decline in the total volume of mail over the past decade. As people may have suspected, total volume of mail has seen a large decline over the past decade.

The third chart combines all three of the graphs previously used to see if there are any relationships. Unfortunately, due to the wide range of between pieces of mail in total volume and net income, the line graph is rather poor. Although the early years between 2005 and 2008 there appears to be a relationship between revenue and volume that trend does not continue as revenues grew despite the decline in mail volume. 2011 saw a sharp drop in mail volume and that is reflected in the net income.

The following charts are from quarterly reports. Quarters generally follow this dates, however exact date changes on a yearly basis. Quarter one runs from January to April 4th. Quarter two runs from April to July 4th. Quarter three runs from July to October 4th. Quarter four runs from the beginning of October until the following January 4th.

The first graph compares revenue and net profit. There is a much greater correlation on a quarterly comparison than a year by year comparison. The second and third graphs look at the lineal relationship of consolidated revenue and net income respectively. Both quarterly numbers have a large amount of variance. Especially net income which goes from peak to valley only a quarterly frequence.

Part Four: Freedom of Information (Access to Information):

Please see attached printed copy for my submission of the Freedom of Information request. For the online submission, please see attached file.

Part Five: Story Ideas:

Since the government has made a decision to continue door to door service, story ideas are mostly opinion pieces. In the coming years, further articles will need to be written reviewing how financially stable Canada Post is and if they should again reconsider the decision, as mail continues to decline.

Personally I would write an article that argues that Canada Post should continue with the plan to switch to community mailboxes, however they should also offer citizens the option to continue with door to door service for any citizens willing to pay a yearly fee to have their mail delivered directly to their home. I believe this is the best option, as Canadians would have the option to pay for the level of service they want. For many they want to have mail delivered to their door, so why shouldn’t they pay more for that service. This would save jobs, but would still cost thousands of people their job. It’s a proactive approach that accounts for a continual decline in the use of mail services.

Another alternative option would be to eliminate mail delivery on an every weekday basis. Switching to a twice a week or weekly basis would be financially more viable and would save the government money. Questions to answer, would be how many hours would mail delivery people lose on a yearly basis. Would they be able to find other part-time jobs to make up for the loss in hours? The real question this brings up is if we need daily mail delivery. Is there any piece of mail that we need daily? With improved shipping with Crown Company Purolator, next day shipping is a reality and we do not need to use the postal service.

A fact based story would be monitoring the decline of mail volume. If this continues, what is the future of Canada Post? At what point does the company need to undergo a major restructuring to deal with the lower volume.

 

 

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