Canada Cost Post-Saving Math

(On the photo, a post(wo)man delivering mail to the residents of Freising, Munich area)

Door-to-door mail delivery to urban customers has been phased out in Canada in the last five years.

This was a major cost-saving initiative of Canada Post. As a performance improvement specialist, I doubt its value for Canadians.  Without a doubt, there is a better way to improve efficiency, instead of going into this cost cutting death spiral, as Tom Peters put it in his book “The Excellence Dividend.”

Since 2013, the only rationale offered by the Crown Corporation was that two-thirds of Canadians don’t have mail delivered right to their doors already, so the other five million should not complain. And a local public servant obligingly added at the time that this is even better for the elderly citizens – to have a daily walk to the communal “super-mailbox”…

But I digress. Let’s just do the math.

When the cost-saving campaign was launched by Canada Post in 2013, the average cost of door-to-door delivery was $269, while the average cost per group mailbox was $117. I.e. the savings per address was $152, or about $165 today (adjusted for inflation).

Canada Post saves about $165 for NOT delivering mail to your door.

Let’s assume that one person from each household has to walk to the mailbox once per delivery day. Without getting into emotional (dying to get the letter a.s.a.p.) or environmental (slippery and cold at times) considerations, let’s assume that the round trip takes 5 minutes.

With a median income of 38,700$/yr, this trip will cost almost $2. Thus, the cost of self-delivery amounts to $403 per household per year.

The cost of self-delivery is $403 per household per year.

In December 2015, then public services minister Judy Foote told the House of Commons that addresses converted to the community boxes would have door-to-door delivery service restored.

Earlier this year, the Trudeau government announced it would be scrapping the previous government’s program to replace door-to-door mail delivery with community mailboxes as part of a broader plan to renew Canada Post. However, Canadians who have already been moved to community mailboxes wouldn’t be getting their home delivery service back. And that’s pretty much everybody, except for some distinctive residential areas. Sussex Drive, anyone? I don’t think so…

But looking at this cost-saving initiative from a Sussex Drive resident’s perspective, one must realize that with just the last 2 Mil households switched to the new system, the Nation has lost another $800 Mil per year(!) in free time. You may not like Karl Marx, but now more than ever, free time is the true measure of wealth.

With the last 5,000,000 people moved to group mailboxes, Canada is losing $2 MIllion per year.

In addition, up to 8000 post service employees have lost their jobs.

I will be happy to hear that my estimate is wrong.

Read this May 2024 article in National Post, as Canada Post has resumed its effort to get paid more for less work. 
From the same source – official updated CP costs are not far from my 2018 estimates:
– Door-to-door delivery costs $284 per address per year on average.
– Community mailboxes cost $162 and apartment lobby delivery cost $130 per household.