POSTAL STRIKES: Don’t blame the unions?

Nigel Bruce, head of marketing at Triangle Management Services, investigates the recent and ongoing postal strikes across the world for Post&Parcel. I don’t believe in coincidence. So when I read that there are postal strikes in the UK, Brazil, France and very nearly in Australia, I look for a thread of commonality between these scenarios – to paraphrase “problem global, strike local”.

Or am I simply seeking a neat, intellectually satisfying common theme that enables me to put postal strikes into one thought box and then move on?

We all know that the postal industry is under huge pressure. Declining letter volumes and e-substitution combined with the lead weight of the USO mean that national posts (and that is the sector we are talking about – private postal workers, at least by comparison, seem remarkably content) are struggling – in many cases to survive. It is reckoned that if they were private companies over 25% of the world’s national posts would have gone into liquidation! But here’s the rub – the postal industry, in major part constituting the national posts, is one of the world’s biggest employers, with a massive global head count. So declining revenues + overstaffed workforce = redundancies = typical militant union inspired strikes – surely it’s as simple as that?

Maybe, but possibly not. In the UK, the imminent strike action is about modernisation. In Brazil it’s about money. The French strike was founded on privatisation fears, whilst in Australia, although the strike ballot was not allowed to take place by the regulator, the issue came to the fore over contracting out roles within the national post. So clearly, there is a commonality. As the postal industry changes the unions are rightly protective of their membership, and are seeking the best deal for them – whether it be job security or wages.

Everywhere in the world, trade union membership, and their influence, has declined dramatically over the last 50 years – the curve represents a steady falling off in numbers to a point where in many countries and in most industries, their reach is only significant at a local or branch level.

But in the postal industry, as has been evidenced above, their influence is still significant. They can call national strikes that do have an effect and are very damaging to national economies. And of course, as a result, postal customers seek alternatives, further impacting on national postal revenues, exacerbating the need for change, which the unions fight against. More vicious circle than virtuous circle!

So how do we break this depressing Catch 22 situation?  How do we smash this seemingly ever decreasing whirlpool? The answer lies in management.  The senior executives of national posts are not, in the main, entrepreneurs. They are custodians, who are seeking to pass the (state owned) business on to the next person in line in at least as good, hopefully better, shape than they found it.  That generally calls for maintenance and enhancement strategies – evolution rather than revolution.

However the technological developments of the last decade, and the changing customer behaviours driven by it, have led to the most significant postal paradigm shift since the stamp was invented. New rules, new dynamics, new standards, new requirements. Whose job is it to plan, design and implement? You guessed it, management.

The human race has historically been less than capable of dealing effectively with revolution, and in this particular scenario the inflexibility of the unions has been a significant impediment to change, so management are due some sympathy. But the next time your mailbox is empty because postal workers are striking, don’t, as a knee jerk reaction, simply and solely blame the unions. Albeit over the years they haven’t helped, in their own way they are simply looking after their own and trying to secure a future, whilst management are scratching their heads, wondering where the future is.

Do you agree with Nigel? Please comment below.

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2 Comments

  1. Francisco Machado

    I work in a private company in Brazil and I agree with your issue.

    In Brazil every year there is a Correios’s (Brazilian post office) workers strike, but the unions and government are blame.

    Well, the Correios are a public company, with postal monopoly, have a excellent reputation in Brazil, and citizens trust in its services. Unfortunately, after a strike end, the Brazilian’s Government often don’t keep its promise.

    On the other hand, the unions always inspire a new strike, because the results aren´t satisfactory.

    Yes, in Brazil it’s more vicious circle than virtuous circle!

  2. Derek Rocholl

    It is easy to see why there is so much strife in Royal Mail. At a time when volumes are in decline, there is a massive problem with pensions, the regulator is forcing loss of upstream business through the access headroom price control mechanism (basically enforcing a transfer of undertaking without the transfer of cost) and restricting scope for diversification by the approach taken to costing assets used for the provision of the USO.

    In this situation the management has nowhere to go other than on a drive for massive cost reduction (i.e. slashing head count and pursuing a drive towards part time jobs) which will make the pension position worse. The Union has to try to defend its members interests on pay, conditions, job security and pensions as well as having to deal with some large power blocks within its ranks (particularly in London) who have additional agenda items.

    In this situation it is difficult, if not impossible to see where the gap between the parties can be bridged without one side of compromising in a way they can’t afford to compromise under current conditions. Neither side is a position to paint a positive vision of the future for the company’s employees. Without light at the end of the tunnel, even if this current dispute is settled by compromise, it will flare up again unless the entire dynamic alters.

    The challenge that must be taken on by the leaders of the business (Management and Union), and the government as shareholder is one of finding a vision that makes the short term pain of having to change and modernise worth it for the long term gain. In a declining tradtional market, with ever increasing competition they must be allowed to diverse and find a route to long term growth using the massive but eroding assets they have at their disposal.

    The opportunities for growth are manifest for a company with thousands of buildings, a massive fleet and huge body of employees with a diverse range of skills. They need to be freed from the constraints that prevent them from exploiting these opportunities. In particular they need to be able to use the high level of redudancy in the assets required for the maintenance of the USO to create new propositions and compete for other types of business based on marginal cost pricing.

    Postcomm has been incredibly quiet throughout the current dispute but with Government sanction could ultimately hold the key to its long term resolution. If Postcomm doesn’t find a way to ease the straightjacket that prevents Royal Mail from competing to retain upstream business and to diversify into growth areas the result will be the death of the USO which the Regulator is by statute required to maintain as its number one objective. Not to mention a massive pension problem that the British tax paying public will have to resolve.

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