I had an interesting revelation while visiting the Estevan Chamber of Commerce the other day.
As a chamber member through my photography business, I pay my dues every year and get a sizeable manila envelope with my little window sign and all the membership benefits literature.
The woman who had been handling the distribution of these packages had an epiphany regarding their delivery. It was substantially cheaper for her to just go around and deliver them personally then to mail them.
That goes against every notion of good sense, but it's reality. They have roughly 400 packages to send out. The envelopes cost $3.50 each for postage. That's $1,400, and I imagine tax is on top of that.
Theoretically, if you wanted to hire a teenager to deliver it, at $10/hour minimum wage, you could give them $200 for gas and pay them for three weeks, working full time, to make these deliveries. Since nearly all of them are within the city limits, it's doubtful you would use that much gas. The kid would have to make about 26.7 deliveries per day, or 3.33 per hour, roughly one every 18 minutes. Sounds like a pretty tough gig for a kid, doesn't it?
Instead, the bookkeeper at the Chamber, whose time is much more valuable than minimum wage, was making these deliveries, and it was still a cost savings to the organization, even though she could probably have been doing something else.
I'm not sure if that $3.50 price factored in the recently announced increases or not. Regardless, here we have Canada Post, whose job it is to free us of the burden of doing deliveries of envelopes, seemingly way too expensive to actually use.
Oh yes, Mr. Zinchuk, but that postage price also factors in delivering to other towns anywhere in Canada.
Sure it does. But in this case, doing local delivery yourself makes more sense than paying a postie to do it.
Isn't it ironic that you used to be able to have milk and mail delivered to your door, but now it's couriers making the rounds, delivering more than ever?
Yes, Canada Post has to change if it is to survive. The new community mailboxes, with much larger individual boxes, looks like a good idea. It can take large envelopes without folding them, or small parcels. But will these only end up in new areas, and areas where letter carriers are withdrawn, or will they be replacing all of the "super mailboxes?" It looks like just the new locations, from what I can tell.
Having more retail outlets will be helpful, too. But the dramatic jump in mailing costs is going to counter both of those benefits.
Canada Post knows its business has been affected dramatically by the rise of the Internet. The huge increase in the cost of postage will simply drive more people and businesses to electronic transactions and interactions.
Will we see more businesses rise to compete, on a local level, as a delivery service? Canada Post has some sort of monopoly on first class mail, but packages from the Chamber of Commerce wouldn't fall under that. Maybe some entrepreneurs may see an opportunity here?
In the meantime, we will all be driven into the embrace of the Internet just a little bit more.
- Brian Zinchuk is editor of Pipeline News. He can be reached at [email protected].
