Wednesday, July 14, 2010

Cutting Delivery One Day a Week

The Globe and Mail has reported that the Montreal Gazette is eliminating its Sunday paper.  This decision leaves the Montreal metropolitan area without a Sunday paper.  The Saturday paper, which already has the week-in-review and other features that are commonly found in Sunday papers in the United States will pick up those features that are now published on Sunday.

The decision to end the Sunday paper also reflects a far different competitive market in Canada for the delivery of saturation advertising than is found in the United States.  In Canada, newspapers do not distribute nearly the number of inserts they do here.  Newspapers in Canada have not effectively competed with Canada Post's unadress admail product as well as newspapers in the United States have competed with the Postal Service.  That is why nearly every newspaper in the United States has a thick polybag of inserts for delivery on Sunday and additional inserts delivered on other weekdays.  

So what is considered unadressed admail?

Unaddressed Admail consists of printed matter and non-printed matter such as product samples for delivery that are not addressed to a specific address in Canada. In order to provide maximum flexibility and choice, the Customer’s advertising piece can take on a variety of forms and content, including, but not limited to:
  • flyers
  • newspapers
  • community newspapers
  • cards
  • coupons
  • single sheets
  • envelopes
  • catalogs
  • magazines
  • brochures
  • co-op mailings
  • inserts and enclosures
  • samples
  • CDs and DVDs
How is unaddressed admail priced?

Canada Post has a published tariff for unaddressed admail.  However nearly all users of unaddressed admail only use the published tariff as a basis for defining the rates that are included in the contract that they sign with Canada Post.  The contract rates are private documents and are signed and implemented without regulatory review.   The same is true with contract rates for addressed advertising and First Class bulk mail. Therefore it is impossible to use public documents to compare the rates that a distributor of coupons would pay in Canada with what they pay in the US. 

What is the service quality?

Canada Post offers 3 day delivery windows for unaddressed advertising starting from the day it is dropped at the delivery unit.  In addition it offers a premium service, for a slightly higher rate that allows a customer to specify the particular day that the delivery window will begin.  Canada Post has developed specific tools for mailers to use to identify the carrier routes that they want use for advertising distribution.

What about small businesses?

Canada Post has a small business program called VentureOne that allows businesses to get free assistance in developing their unaddressed advertising program in addition to 5 to 8% discounts on all of the parcel services that Canada Post offers.  The program includes assistance in all phases of creating and tendering advertising mail.  

Can the United States Postal Service do what Canada Post does?

No, it can not.   Regulatory restrictions prevent it from offering contract rates that are not open to scrutiny by a regulator and in some instances other customers.   Regulatory restrictions prevent it from offering discounts for business mailers that are not available to consumers unless they can be "cost justified."  (Canada Post has an internal review process that sets parameters for profitable discounts.)  Finally, the Postal Service would have significant difficulty offering a program like VentureOne without regulatory approval and many of the features could run affoul of restrictions on providing "non-postal services" as they competes with services that firms in the private sector charge for.


Anonymous said...

You forgot to mention that Canada doesn't have Saturday mail delivery.

Anonymous said...

You left out a key portion of unaddressed ad mail in Canadian Postal System. Canadians can buy a sticker that they attach to their mailbox which tells their mailman NOT to put any of that junk mail in the box.