The week that was: 3 June 2011

Strike begins in Canada, USPS to release ideas on digitalisation, and DHL announces “significant investment programme”… Good afternoon to you! Since Post&Parcel was launched, there is seldom a week that passes by where striking action is not on the agenda somewhere across the world. This week is no different, so let’s catch up with the latest goings on.

Postal workers went on strike in Canada on Thursday night, as the Canadian Union of Postal Workers took its bargaining with Canada Post to the picket line. Despite a last-minute offer from Canada Post, with what it described as “significant concessions” responding to union demands, postal workers officially laid down their tools in the City of Winnipeg, Manitoba, at 10.59pm local time. CUPW national president Denis Lemelin said today (Friday) that his negotiating team was prepared to keep trying for a contract with the Crown Corporation. He said: “We have done our very best to get an agreement without a strike. Unfortunately, Canada Post has left us with no other choice. We cannot accept unsafe and unfair conditions.” Workers are set to picket the main Canada Post processing plant at 1870 Wellington Avenue in Winnipeg for 24 hours. Other rolling 24-hour strikes are set to follow elsewhere in Canada, potentially later today (Friday), as the union continues to apply pressure in talks for a new four-year contract. Winnipeg was selected for the first union protest because it was where Canada Post’s $2bn network upgrade effort, Postal Transformation, began. The union has made various claims that Canada Post’s modernisation effort has brought unacceptable conditions for workers, including health and safety concerns. “We’re starting in Winnipeg because it is the first place where Canada Post brought in the new machines and work methods that are causing so many problems for the public and postal workers,” said Lemelin. At a broader level, the union is continuing to hold out for higher wage increases than Canada Post has been offering, as well as a better deal for new workers as the Corporation seeks ways to cut its labour costs to respond to declining mail volumes.

Across the border, USPS said it is set to release its initial ideas on how it could develop digital or hybrid mail services this summer. Paul Vogel, the USPS chief marketing officer, told the Mailers’ Technical Advisory Committee (MTAC) last week that his team had been wading through “thousands” of ideas that have been put to the Postal Service regarding possible strategies to move into new forms of electronic communications. “There’s been no shortage of ideas of what the Postal Service should be doing,” he said. “We can’t implement them all – we’re trying to narrow down the field in terms of what we can implement without Congressional approval.” But Vogel then added: “We will have at least a proposal within the next month or two.” Electronic communications are something of a double-edged sword for postal operators around the world – cutting into physical mail volumes, but also offering potential income opportunities. With hybrid mail – the printing of electronic-sourced materials for physical mailing – there are also opportunities for electronic communications to help mail volumes. USPS executives believe e-substitution of physical mail could be to blame for as much as a 4% decline in mail volumes, but with private sector players developing digital postal mail platforms, the USPS has been pressured to get involved. This year, reports from federal agencies including the Office of the Inspector General and Government Accountability Office have recommended the USPS build on the trust in its brand to offer secure electronic communications services.

This week, DHL Express launched a “significant investment programme” in a bid to expand its global capabilities – including additional flights, a new hub, staff training and brand management. On Tuesday, the operator introduced an additional daily intercontinental route from Hong Kong to Cincinnati, as “a direct response to increasing demands for services from South China and Hong Kong to North America”. Customers in the region will now enjoy a later pick up time out of Hong Kong and Pearl River Delta, and overnight service to North America. Furthermore, a new direct route connecting Cincinnati and Bahrain will “facilitate the increased trade between North America and the Middle East”. DHL also noted that its new $175m North Asia Hub, situated at Shanghai Pudong International Airport, will open early next year. The 57,000 square metre facility will be built on a total land area of 88,000 square metres. It will be equipped with “leading edge automated sorting systems,” the operator confirmed. Leading operations in the area will be Jerry Hsu, who has been promoted to CEO Express Asia Pacific. He is currently president of Greater China Area. With his promotion, Hsu will oversee operations in China, Japan, Korea, Hong Kong, Taiwan, South East Asia, India and South Asia, Oceania and other markets and territories in the region. Ken Allen, CEO of DHL Express, said: “In upgrading our global infrastructure we are delivering on our promise to be the world’s leading international cross-border express brand. We are thereby helping our customers get their goods significantly faster to their markets and making it easier for companies to access key industrial production centres.”

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