AGAR: Days of the Post Office have come to an end

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It is past time to shut down the Post Office.

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Ever since the Internet and email came into our lives, coupled with the rise of FedEx and UPS it was obvious this day was coming.

I would think the last people to know this are the people running the Post Office.

It is hemorrhaging money.

I hasten to point out that I have nothing against the Post Office.

My father was the Post Master in Gilbert Plains, Manitoba for many years.

The service was essential in its day.

This is not its day.

We used to have a guy deliver coal to the house. And a milkman.

Every town had a stable for horses. Larger towns had a lot of them.

Things change.

A CTV report tells us, “The chair of Canada Post’s board says the organization’s financial situation is unsustainable.

“The board and senior management recognize that Canada Post is at a critical juncture.

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“Significant change is urgently needed to preserve Canada Post’s delivery network, which is vital because it’s the only delivery network built to serve all Canadians.”

OK, more on that in a minute.

But how bad is the situation?

For over almost two decades, the organization has gone from delivering 5.5 billion letters a year to about two billion.

That sounds like a lot.

But it will continue to drop.

Who is sending letters, other than at Christmas?

Once June and Opal pass on, nobody.

Young people don’t send Christmas cards. Many of them think it is bad for the environment.

They have concentrated on parcel delivery.

But still, email and delivery services have carved out so much of the business that in August, Canada Post reported a second-quarter profit of $46 million before tax.

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How did they do that?

A one-time sale of subsidiaries helped offset an operational loss of $269 million.

You an only sell off assets for so long.

That’s compared with a loss of $76 million before tax in the first quarter of the year.

Canada Post reported a $748-million annual loss before taxes for 2023.

In a recent interview on Newstalk 1010 with  Marvin Ryder – professor of marketing and entrepreneurship at McMaster University’s DeGroote School of Business – he discussed the decline.

We went from the average household receiving seven letters a week to two.

The Post Office’s share of parcel delivery is also declining.

They can’t keep increasing the price of a stamp and expect us not to use email.

So in the end who is on the hook when the Post Office runs out of money?

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Marvin Ryder says there is precedent to show the obvious. The taxpayer.

Ryder says Canada Post will run out of money in 2025. And he is right. I for one do not want to see another tax.

People will talk about the Post Office cutting back to three day a week delivery or ending the practice of having the routes set up such that a delivery person can get it done by noon while being paid for a full day.

None of that is hard core enough, I think.

Who needs the Post Office?

No one in a city or reasonably populous, close to a big city community.

What does the Post Office offer you that is not available by email and delivery service?

Nothing.

When it come to overnight delivery, the Post Office, in my experience, won’t guarantee it like FedEx does.

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Small towns in the hinterland either need the Post Office or a similar service.

Small towns are sometimes in the position of not getting FedEx or UPS service.

But it would cost far less to have a service for smaller towns or find a way to incentivize the big delivery services to look after those towns.

And let me say this, as a kid from a town of 800 people.

You will have to get used to paying more for delivery.

As a small town boy I can tell you that one thig people in those towns like to do is condescend to the city mice that in their town they don’t have the crime, and the mentally ill all over the sidewalk, and the traffic and the millions of dollars for a home.

An easier, affordable life.

Right.

But there is a cost to you as well.

You might have to pay more for deliveries and Taylor Swift isn’t playing your curling rink.

I admit that I would not be the person to set that system up, but I feel comfortable saying that it is time to stop nibbling around the edges of a dying business model and shut it down.

We can figure out how to serve smaller communities for the packages they need.

Private contractors are likely the option.

Does anyone want to buy the Post Office, turn it private and guarantee delivery across the nation?

Let’s ask Elon Musk.

The current model is over. It is dead. Planning should not be saving the Post Office, it should be on something completely different.

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