Insights, statistics, effects and comments on the 2018 Canada Post Strike

I was watching 22 Minutes on CBC on New Year’s Eve. One of the sketches was a couple exchanging Christmas gifts with the punch line being: “Forgot to get your partner a gift? Blame it on the post office!” There’s no denying that direct mail is big business. With the implementation of Canada’s Anti-Spam Legislation (CASL) on July 1, 2014, and the increasing ambivalence towards digital media, the physicality and personalization offered by direct mail to consumers is a fantastic avenue for marketing and revenue generation. In 2017, the Data and Marketing Association’s direct-mail statistics stated that the direct-mail household response rate was 5.1% when compared to 0.6% for email, 0.6% for paid searches, 0.2% for online display, and 0.4% for social media. However, the recent rotating Canada Post strike by the Canadian Union of Postal Workers (CUPW) that started on October 22, 2018 and continued until back-to-work legislation was passed in Ottawa on November 27, had a very real impact on how a lot of businesses rang in the New Year.

From the beginning, the CUPW came out swinging. The strike began days after newly legal cannabis retailers opened for online business, and the rotating strikes saw two consecutive days of closures at Toronto’s Gateway postal facility – a key Canadian processing hub for mail and parcels. The union’s subsequent strikes to other major processing locations across the country saw mail and parcel delays mount in the succeeding weeks. By mid-November, with Black Friday and Cyber Monday looming and Canada Post no longer accepting international mail, eBay wrote to the federal government to put an end to the dispute so retailers and consumers would not miss out.

Nevertheless, perhaps the people who were most lost in 22 Minutes’ punch line were commercial printers, small business owners, and mailing houses caught in the middle between marketing objectives and mail delivery. As Steve Falk, president of Prime Data in Toronto, put it: “The fall postal disruptions caused many cancelled print orders, layoffs and delayed decisions to grow mail-delivered marketing. With sales and fundraising goals at risk, some budgets were directed to digital marketing and other predictable channels. Even phone marketing picked up some of this!” A natural consequence was the push from companies to encourage more people to switch to electronic billing and statement options. Business, however, did increase for expensive but reliable shipping services. Much worse was that charitable donations were down in the quarter, as mail was delayed and cancelled, and donors hesitated to send in donations through our fickle postal system.

In this situation, there are no winners. Canadians were hurt. Businesses were hurt. The CUPW and its workers were hurt. Canada Post was hurt. Last year, transactional mail pulled in $2.9 billion to make up 45% of Canada Post’s revenue. Direct marketing mail made $1.1 billion or 18%. That’s a lot of printing, sealing and mailing business at risk. Falk further emphasized: “The discourse focuses on the recipient of an envelope, but they don’t pay for the service. The real customer is the payer or ‘sender’ – and it’s the sender’s important role that’s often misunderstood. The sender will determine the future of the mail channel. Senders know that there’s huge value in posted and printed paper communications in many situations – that is, unless it’s delayed, unpredictable, or just stopped. Senders’ loss of confidence is very, very damaging.”

The end of 2018 brought a question to the minds of thousands of Canadians:  does Canada need Canada Post? Many countries around the world such the United Kingdom’s Royal Mail and Japan’s Japan Post are privatized. Recent initiatives like allow users to buy and print certified postage for the United States Postal Service, thus enjoying all the services of the post office without leaving their homes. Falk’s thoughts about the public perception of mail is one that points to a future systemic problem for enticing senders back while rebuilding their confidence in the service – as direct mail succeeds only when a number of interwoven organizations work together. “Those who plan ad campaigns, business communications and fundraising strategies, or send cheques in the mail, have many channels to choose from now. Dependable and timely delivery will always be a key part of their decision-making process.”