Canada Post Strike: a Lose - Lose Proposition for CUPW

For over a week, the Canadian Union of Postal Workers (CUPW)have struck Canada Post in a series of rotating strikes that affects Canadian cities on nearly a random basis.    The impact of the strike is clear and it is not good for either CUPW members or Canada Post customers. 

According to Canada Post, daily mail volume is down 50%.   In response Canada Post has cut delivery to three days per week in urban areas. CUPW employees not on strike find their work hours curtailed to match the lower mail volume and reduced delivery schedule.

In authorizing a strike, CUPW members clearly believed that Canada Post's offer was a losing proposition for them.   Like postal workers in many countries, they saw that long standing benefits and regular pay increases were threatened with new approaches to benefits and less certain pay increases.  They also saw major changes in their work environment and Canada Post introduces sortation to carrier route sequence as well as other changes designed to reduce costs, with cost reductions not going to wages and benefits but going to earnings and lower or stable rates for customers.  

Unfortunately for CUPW employees, the result of authorizing the strike is also a lose proposition.   Following the strike, CUPW members will likely work for a greatly weakened Canada Post.  Mail volume that switched to electronic alternatives will not likely return to a printed form that CUPW members sort and deliver.    Parcels shipments that were handled by CUPW members that switched to Canpar, DHL/Loomis, FedEx, Purolator, or UPS will be tough to get back as shippers in the important B-2-C market find that other carriers can do the job as well as Canada Post.  

Without a return to pre-strike volume levels, Canada Post will likely accelerate its modernization efforts, and combined with its regular efforts to optimize staffing levels and delivery routes, will likely employ fewer employees than it planned if a strike had not occurred.

Right now it is unclear, how the current impasse can end.   The longer it goes on, the weaker Canada Post becomes, but it is unclear whether a weaker Canada Post will be more willing to agree to union demands.   In fact, an argument could be made that a weaker Canada Post could become even more reluctant to change its position and may even request even greater changes in wages, benefits, and working conditions than was in its original offer.

One idea that is not on the table that could help resolve the impasse, would be some form or employee ownership of Canada Post in return for the changes that Canada Post management wants.   This ownership, whether in the form of voting or non-voting shares would give employees a share of the benefits of the contract changes as owners that Canada would be highly reluctant to grant them as employees.   This would be a major change in Canada Post's governance but one that the CUPW and Canada Post should think about if they want to ensure a vibrant Canada Post in 2020 and beyond.

Historical Analogy:   In 1997, the Teamsters went on strike against UPS for 15 days.   At the end of the strike, UPS acceded to many of the Teamsters demands as the long-term impact of business was clear.   (A PBS interviews with representatives from the Teamsters and UPS provides a perspective on each side's position following the strike's end.)

The strike showed UPS customers, which at that time represented nearly 90% of all parcel shippers, that a quality alternative existed, RPS (now FedEx Ground).   Customers who during the strike were able to switch, stayed with RPS.  Nearly every quarter since the strike,  RPS/FedEx Ground has taken market share away.  

In subsequent agreements, the Teamsters did agree with most of the changes UPS wanted including withdrawal from the Central States multiemployer pension plan, and lower wages for new part-time workers. 

The Teamsters now face the challenge of negotiating with UPS that is no longer a near monopolist in the parcel market.  These negotiations require that contract terms recognize implicitly the impact of competition from a non-union FedEx, the Postal Service, and numerous non-union smaller regional parcel carriers.

Note for American Readers:  One wonders how the agreements between the Postal Service and APWU and other unions would differ under labor law similar to what Canada Post operates under.   (This is law somewhat similar to the Railway Labor Act.)   Also given that single-piece mail is declining at around 10% year-to-year, how would a strike increase that decline especially since a large percentage of single-piece mail is bill payments?