International Postal Update

October 2013

Canada Post proposes lawsuit settlement while suffering substantial losses in Q2 2013.Canada Post offered $5.05 million (US$4.9 million) to settle a class-action lawsuit filed in 2006 by Lee Valley Tools on behalf of businesses that argue that the national post overcharged for parcel shipping. The suit alleges that Canada Post failed to correct over-calculations of weight and violated Canada’s Weight and Measures Act.

The national post had charged customers the greater of actual weight or “volumetric weight,” a calculation based on both volume and weight designed to ensure that bulky but lightweight items were charged appropriately. Lee Valley Tools argued that Canada Post’s method of measuring overstated the volume of irregularly shaped parcels. As part of the proposed settlement, Canada Post has agreed to stop charging customers based on volumetric weight within two years of the judgment.

Canada Post recorded a $76-million (US$73.8 million) loss for the second quarter of 2013. Transactional mail volume, which generates approximately half of Canada Post’s revenue, has declined by 6.5 percent year-on-year. Canada Post expects a major cash shortfall throughout 2014 because of a $1.1-billion (US$1.07-billion) special payment obligation due to its pension fund.

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Postal workers union challenges sell-off of Royal Mail in the United Kingdom. The Communication Workers Union (CWU) plans to vote on whether to strike if it cannot reach an agreement with Royal Mail on future pay and pensions under the proposed sell-off. The CWU has rejected Royal Mail’s proposal for an 8.6-percent increase in basic pay over three years. Royal Mail said it was “very disappointed” with CWU’s decision to plan a strike ballot. The CWU will announce the results of the vote on October 16.

The Universal Postal Union (UPU) calls upon Asia-Pacific postal operators to improve service quality. At the quadrennial congress of the Asian Pacific Postal Union held from September 3-7 in New Delhi, India, UPU Director General Bishar A. Hussein addressed delegates from more than 40 nations, urging postal operators in the Asia-Pacific region to “move with the times.” Hussein pointed out that postal operators can adopt new technologies and take advantage of the parcel boom. President of India Pranab Mukherjee noted the rising public expectation that postal operators offer the “same standards of quality, accountability, and transparency that are being provided by other market players.”

The UPU also accepted a US$100,000 payment from the China State Post Bureau to help fund the Union’s efforts to modernize postal networks in the Asia-Pacific region. 

PostNL fails to meet its delivery targets in 2012. The Dutch postal regulator, Authority for Consumers and Markets (ACM), said that PostNL delivered only 93.6 percent of its mail next day in 2012, missing its 95-percent next-day delivery target. PostNL said its failure to meet the target was the result of network reorganization. Though ACM cannot penalize PostNL for its 2012 performance, the regulator will gain statutory powers next year that could fine PostNL 450,000 euros (US$598,500), or 10 percent of turnover, for future target failures.