Canada gets cluster-boxed: Why it can’t happen here

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Canada Post announced this week that over the next five years it would be converting five million urban residences from door delivery to cluster box units (CBUs), also known euphemistically as Community Mailboxes (CMBs).  Along with other cost-cutting initiatives, like consolidating processing plants, closing post offices, and reducing employee benefits, the Canada plan will supposedly save $700 to $900 million a year and involve eliminating 6,000 to 8,000 jobs. 

The news that Canada would get cluster-boxed was greeted with applause by Congressman Darrell Issa, whose Postal Reform Act (H.R. 2748) mandates a similar conversion for the U.S., with some thirty million residences and businesses being required to shift to cluster boxes over the next ten years.  There’s a similar provision in the Senate bill (S. 1486), but it’s more moderate — it requires a conversion program but shifts customers only on a voluntary basis, with no target numbers.

The Postmaster General has also expressed interest in switching to more cluster boxes.  In January 2013, he said, “We’ll be looking at some centralized delivery, rolling that out across the country – no major push, but starting to move on that.”  

Over the past year, there have been many instances of customers getting converted to cluster boxes, often on a less-than-voluntary basis.  The Postal Service has been using a variety of explanations for making the conversions, like protecting letter carriers from unchained dogs, and it’s been sending out misleading letters to customers telling them they need to change modes of delivery when in fact they don’t.

A couple of weeks ago, the National Association of Letter Carriers put out a news release noting that it had “become aware of an effort by the Postal Service in different parts of the country to convince customers to agree to change their mode of delivery to cluster box or centralized delivery.”  In order to make sure carriers and customers know their rights, the announcement reviews all the regulations, which include a requirement that customers must agree voluntarily to a change in the mode of delivery.

Despite all the signs that the U.S. is trending toward more cluster boxes, we are a long way from mass conversions.  Many politicians and commentators will point to Canada as a model to be imitated and a harbinger of things to come, but the United States will see a mass conversion to cluster boxes at about the same time we get a Canadian-style healthcare system.  

 

Learning from Canada

Time Magazine has already come out with an editorial arguing that "we can learn something from Canada."  Time says that switching to cluster boxes is "an essential step for the post office to remain self-sustaining in a digital age.  For Americans there should be only one reaction: envy."  

Time puts the blame for the fact that we're not following the Canadian lead on Congress, which keeps the Postal Service tethered "like a dog on a leash."  

But Time has it wrong.  Current law permits the Postal Service to change a customer’s mode of delivery on its own.  Mass conversions don't require Congressional approval.  The reason our postal system hasn't resorted to this particular austerity move is that it's a terrible idea.  

The Postal Service has long recognized that there are many problems with changing over to cluster boxes, not the least of which is angering customers, especially if you do it without their permission.  As one person commented about the Canada Post announcement, "Nothing gets people more riled up than having something they are accustomed to taken from them by the government."

So while Canada may be ready to make the switch to cluster boxes, and while Congressman Issa and Time Magazine may be applauding the move, there’s not much chance that it will happen in this country anytime soon.  It’s one thing to introduce cluster boxes for new residences and businesses, but converting the mode of delivery for millions of existing customers is another story.  

 

Leaving money on the table

Some of the problems with mass conversions are discussed in the USPS report, Ensuring a Viable Postal Service for America.  The issues are examined in more detail in the Postal Service’s reply to an OIG report on “Modes of Delivery,” which has an extensive analysis about how the Postal Service might save billions of dollars by converting to less expensive ways of delivering the mail. 

The cluster box idea also came up again just last week in connection with the Postal Service’s request for an exigent rate increase.  In comments opposing the rate increase, the big ad mailer Valpak accused the Postal Service “of leaving money on the table” by not doing more to convert people to cheaper modes of delivery.  Valpak’s argument is that the Postal Service hasn’t been doing enough to cut costs, so it’s not entitled to a rate increase. 

In its reply comments, the Postal Service took umbrage at that remark, and explained it had to be responsive not just to big mailers but also to what Valpak described as “non-paying customers,” i.e., the average person who receives Valpak’s Blue Envelopes. 

The Postal Service also pointed to some of the problems with converting millions of people to cluster boxes – public resistance, equipment costs, and so on.  Changing how people receive their mail is not very easy, for a number of reasons.

 

1. Customers don’t want it. 

In order to evaluate how Canadians feel about matters like rate increases and cluster boxes, representatives of Canada Post traveled across the country having “conversations” with customers.  The report on these interviews says that people like community mailboxes, so installing more of them “would bring indirect benefits, such as making people more active and social on their streets and in their immediate neighbourhoods.” 

To illustrate how great cluster boxes are, the report shows the photo at the right, with a happy mother and daughter picking up a package at the CMB.  The report also quotes several favorable comments.  One person says that community mailboxes “are the water cooler of the suburbs," and another says that walking to the CMB is an opportunity "to get some fresh air."  One senior who moved from a private residence to a retirement community said she loved going to the CMB because it was “an excuse to get out of the house — it keeps me active.” 

It’s pretty obvious that the report cherry-picks favorable responses in order to justify the plan.  The truth is elsewhere.  As a piece in Friday's Montreal Gazette notes, cluster boxes in Canada are widely disliked because “they’re not pretty and tend to generate junk-mail litter.” 

They’re also “a magnet for identity thieves.”  According to a CBC News investigation, between 2008 and 2013, there were 4,880 recorded incidents involving community mailboxes, ranging from vandalism and arson to mail theft.

When the U.S. Postal Service was asked to reply to the OIG’s report advocating more cluster boxes, postal management said that shifting millions of customers to centralized delivery “would constitute a fundamental change in the provision of service to the public and would likely trigger active stakeholder resistance.” 

The Postal Service explained that it “has long understood how protective customers are where home delivery is involved….  For instance, when surveyed, our customers indicated that they would rather lose a day of delivery service than have their mailbox moved from a door or curbside locations to a centralized delivery.”  

The Postal Service knows that people won’t like changing to cluster boxes, and they will let their elected officials know about it, just as they did in 2011 and 2012 when the Postal Service embarked on plans to close thousands of post offices.  A few hundred closed, and that was that.  How many neighborhoods would get cluster-boxed on an involuntary basis before the public outcry put a stop to it?

 

2. Installing cluster boxes in urban areas is a big problem. 

While cluster boxes may sound reasonable in theory, actually finding a place for them presents another problem.  It's one thing to use cluster boxes in apartment complexes or suburban developments, but Canada is going to put them in cities, and mass conversions in the U.S. would also mean using them widely in urban areas.  

In some neighborhoods, every square foot is private property.  What homeowner wants the neighborhood cluster box in his yard?  Back in 1988, when Canada Post started putting community mailboxes in suburban developments, the unlucky homeowner who ended up with the unit on his property had to be given a tax cut because the unit decreased property values.

In denser urban neighborhoods, where there are plenty of public sidewalks, siting a cluster box presents other issues, not the least of which is the matter of rights-of-way and easements.  Plus, the units aren’t small, and there has to be space in front for patrons and behind for the letter carrier.  The CBU can’t block the sidewalk or the entrance to someone’s apartment or business, and it would be useful if there were a reserved parking space nearby for a postal vehicle and for people to make a quick stop in their cars.  Finding a few such places might be doable, but imagine trying to find space for a CBU on every block.  

It's hard to understand how Canada Post didn't address this question from the get-go, but the issue is already getting media attention.  Friday's Toronto Start has an editorial pointing out "what Canada Post will quickly discover is that there’s nowhere to put their equipment. The sidewalks simply aren’t big enough."  Cluster boxes could conceivably be located in the nearest supermarket, library, or drugstore, but that won't be cheap or easy — what retail business will want to give up that much space?  Giving up scare urban green space isn't much of an option either.  And "for obvious reasons, no one would even think of allowing Canada Post to put its boxes on city streets. But sidewalks are as important to pedestrians as roads are to drivers, no matter how special the delivery."

No one is going to want a cluster box unit in front their house or apartment, and as the Star predicts, "this is a cause that will arouse the NIMBY hordes to unprecedented outrage.  And so it should."

 

3. Mass conversions could be discriminatory. 

Proponents of shifting to cluster boxes say it would be fairer than the current system, which gives some people home delivery while others need to go to a curbside mailbox or a post office or a CBU.  Canada Post says that many customers it interviewed objected to the “unfairness” of only a third of addresses getting home delivery, while everyone else gets something else.

But the report is misleading.  In fact, about 70 percent of Canadians get home delivery — 34 percent to the home, 25 percent to a lobby mailbox in an apartment, and 12 percent to a rural mailbox by the driveway.  Another 12 percent have a post office box, and the rest have cluster boxes.  (In the U.S., about 25 percent get home delivery, 44 percent get curbside, and 30 percent get centralized delivery to a cluster box or post office.)

While there are certainly problems with the current system in both countries — like the recent case of tenants of SROs in San Francisco being denied delivery to individual mailboxes — the mode of delivery is usually a function of geography.  Rural and suburban areas have curbside boxes that would be impossible in a city, and you don't expect rural carriers to get out of their trucks and walk the mail to your door.

The real issues of fairness and discrimination would arise with mass conversions to cluster boxes.  In the late 1990s, when community mailboxes (they called them "super mailboxes" back then) were first introduced in Canadian suburbs, residents complained of being treated as second-class citizens.  (This 1998 video may give some indication of what's ahead.)

Seniors and the disabled will be the obvious victims of mass conversions, since they will have the toughest time getting their mail on icy sidewalks.  In the U.S., you can apply for hardship delivery and, if approved, have your mail delivered to your door or curb, even as your neighbors have to use a cluster box.   But it’s not clear if they have this service in Canada.  A Canada Post spokesperson says, “For seniors and disabled people, Canada Post will provide an extra mailbox key that can be given to a caregiver or a trusted, able-bodied person.”  That’s helpful.

There’s also the danger that affluent neighborhoods will continue to get door or curbside delivery while middle-class and working-class neighborhoods get the shift.  In some cases, the rich might simply have more clout with local postal officials.  In others, it might be a matter of what the Postal Service describes as “geographic inconsistencies with respect to community conditions and suitability.” 

For example, if an affluent neighborhood doesn’t have public property on which to put a cluster box and no owner of private property wants the boxes, that neighborhood might end up keeping home delivery.  Upscale urban neighborhoods might object to having ugly cluster boxes blighting the aesthetics of the streetscape, and historic districts might have preservation laws that prohibit cluster boxes.  

The Postal Service already discriminates by providing expanded-service Premier Post Offices to some communities, while rural towns get reduced hours and inner cities get long lines at post offices that haven't seen paint for years.  There's more discrimination going on all the time, with affluent places like Manhattan getting Sunday delivery and the Postmaster General saying he'll expand the program to ZIP codes "that can support it."  Converting to cluster boxes would provide yet another occasion for more discriminatory behavior.

 

4. People will pick up their mail less frequently. 

In Canada, they’re talking about a hundred thousand CBUs for five million urban residences, which comes to about 50 boxes per unit.  That’s enough to serve a typical urban block (not counting big apartment buildings) .  

There will be CBUs everywhere.  Still, your own CBU might not seem all that close.  Canada Post says that it has no strict rules how far you will have to go to get your mail.  “We know every neighbourhood is different so we approach it that way and put forward a plan that makes sense for each community,” said a Canada Post spokesman.

So imagine that it’s winter and pretty cold outside, and you're heading home after a long day of work and it's dark and you’ve been shopping for dinner and you have heavy bags in both hands.  Your CBU isn’t all that far from home, but it’s not on your route.  Are you going to walk a block out of your way and another block back to get your mail, or are you going blow it off and just get the mail another time?  

There's no way around it.  People will pick up their mail less frequently if it's delivered to a cluster box instead of their home.  Your mail may have been delivered promptly, but for all intents and purposes, the mail has slowed down, and that has all sorts of repurcusions for time-sensitive mail, like bills, periodicals, and flyers advertising sales.

 

5. It ruins the “mail moment.”

As this USPS document describes it, “The Mail Moment is the highly interactive daily ritual that consumers devote to bringing in their Mail and discovering what it offers.”  It’s a moment when the recipient is “eager to invite you (the marketer) in to see what your message can bring to her life.  She’s even willing to set aside time to focus solely on what you have to say.” 

In other words, the Mail Moment is a good time for marketers to get their message across.  It’s also a time that people may have some appreciation for the Postal Service — they’re reading the news, hearing from friends and relatives, maybe getting a check. 

Most of the people in Canada who will be shifted to cluster boxes currently enjoy having the mail inserted through a slot in their door or a box at the side of the front door.  When they open the mail, they’re sitting in the comfort of their home.  It will be hard to have a meaningful Mail Moment when they’re standing out on the street in frigid weather.  Rather than feeling receptive to the marketing message in the mail, they’re likely to give the flyer a toss. 

As a matter of fact, one of the concerns expressed in the Canada Post customer report is that “steps will have to be taken to deter or eliminate litter.”

 

6. It will hurt mail volumes. 

The big mailers are not of one opinion on the issue of cluster boxes.  The Greeting Card Association, for example, while adamantly opposed to ending Saturday delivery, is a major proponent of implementing cluster boxes on a national scale — it’s the first recommendation in a 2013 GCA report evaluating a hundred proposals to strengthen the Postal Service. 

It’s apparently due to the influence of some big mailers that Canada Post chose to cut costs by going to cluster boxes instead of eliminating a day of delivery.  According to a piece in the Montreal Gazette, the option of reducing the days of delivery “was rejected because big senders of junk mail objected.”

Other large mailers, however, are more concerned about the potential impact of cluster boxes.  Because people will get their mail less frequently and because the Mail Moment may not feel quite so intimate, they worry that cluster boxes could delay remittances and lower the value of advertising mail.

In response to a survey commissioned by the Postal Service, roughly 15 to 20 percent of small and mid-sized businesses said they would reduce their mail volume by more than 10 percent if the Post Office shifted customers to community mailboxes.  Of those using advertising mail, 9 percent indicated they might reduce their volume by 20 percent or more.  As the Postal Service told the OIG, that would mean a drop in operating revenue of $1.5 to nearly $1.9 billion a year, which would wipe out a huge portion of the cost savings.

Most big cost-cutting measures, like slowing down the mail when processing plants are consolidated or ending Saturday delivery, also end up reducing mail volumes, but converting to cluster boxes could have a particularly negative effect on volumes, and the Postal Service knows it.

 

7. They're expensive. 

Another reason the Postal Service prefers cutbacks like eliminating a day of delivery is that they don’t involve expensive changes to the infrastructure.  The cost of CBU equipment is high, and installing them isn’t cheap either.  The Postal Service estimates that converting 35 million addresses to cluster box units would cost $1.74 billion.  

There’s also the additional cost for hardship deliveries for seniors, the disabled, and anyone else who qualifies for an exemption from the cluster box.  The Postal Service told the OIG that a one percent increase in the requests for hardship deliveries could add $123 million in costs.  On blocks where carriers have to make a couple of hardship deliveries, they'll end up walking the whole route anyway, which will also mean less savings.

 

8. They take the carriers off the street. 

Canada Post’s report on the plan quotes one person saying, "Can we still afford to pay letter carriers to be a greeting service for older citizens?”  That's a put-down of the real service carriers provide by keeping an eye on the elderly, the sick, and the community in general.  In going door to door, they get to know the people on their routes, and they are often the first to spot a problem. 

The news is filled with articles about carriers saving lives.  A few weeks ago, a carrier in Coconut Grove, Florida, saved a woman who was suffering from a heart attack.  The next day, a carrier in Greensboro, North Carolina, found a woman bleeding on her driveway and saved her life.  Just Google "letter carrier saves" and you'll find many more stories like that.  See what you get if you Google "cluster box saves."  

 

9. The PRC would have to weigh in. 

Mass conversions to cluster box units in the U.S. would represent a change in service on a nationwide scale and therefore require an advisory opinion from the Postal Regulatory Commission.  A PRC opinion is just an opinion, and the Postal Service can choose to ignore it, but the process could prove a significant hurdle.  Stakeholders would submit comments opposing the plan, the details would be given serious scrutiny, the cost savings analysis would be challenged, issues like "discriminating against some users of the mail" would be of serious concern, and so on.  In the end, a negative opinion might not stop the implementation of the plan, but it would serve as ammunition for opponents.

The fact that a PRC advisory opinion presents yet another obstacle to mass conversions is also noted by the Postal Service in its reply to Valpak regarding the exigent rate increase.  When the Commission published a negative advisory opinion about the plan to close thousands of post offices, the Postal Service had to come up with an alternative (POStPlan).  “Careful deliberation is particularly important,” writes the Postal Service, “when the decision concerns reductions in the level of service provided to the American people.”   

 

10. The unions and politicians would oppose it.

The only way that mass conversions can save millions of dollars is by eliminating jobs, and lots of them.  Every billion dollars in savings for the Postal Service means eliminating about 10,000 jobs.  (Eighty percent of expenses are labor, and the average worker earns about $50,000, plus $30,000 in benefit costs.)  

It's pretty much the same north of the border, where Canada Post says its plan will save $700 to $900 million a year and eliminate 6,000 to 8,000 jobs.  If the Postal Service were to convert thirty million residences to cluster boxes, as Issa's bill mandates, it might save $4 or $5 billion, but it would require cutting 40,000 or 50,000 jobs.

The announcement that thousands of jobs would be cut, even if it were just through attrition, was met with instant criticism in Canada.  The Canadian Union of Postal Workers said it was “alarmed” by the “short-sighted and foolish” plan.  “If this happens, it would be the end of an era for Canada Post,” union president Denis Lemelin said. “We recognize that Canada Post needs to change, but this is not the way.”

Olivia Chow, NDP’s Transport Critic (the minority party’s leader on postal matters), immediately called on the chair of Parliament’s committee on community infrastructure to convene a special meeting. “Conservatives are destroying Canadians’ long-treasured postal services,” said Chow.  “These job-killing and service-cutting measures will isolate seniors, the poor and the disabled living in urban areas.  You don’t save a business by cutting services, driving away customers and raising costs. ”

Talk about cluster boxes gets the same response from many politicians and union leaders in the U.S.  Senator Bernie Sanders, for example, has expressed serious reservations about S. 1486, largely because it pushes customers to cluster boxes and eliminates thousands of jobs.  Fredric Rolando, president of the letter carriers union, opposed the cluster box provision in last year's Senate bill, and NALC has been lobbying even harder against Issa's bill.

 

Not here, not now anyway

While Canada Post has announced its new business plan as if it were a done deal, it’s not at all clear that the plan will be implemented as described.  A change in the party in power could unravel the plan, or it just might unravel on its own.

The government is currently in the hands of the Conservative Party, and Canada Post's plan reflects the party's ideological commitment to privatization, smaller government, and cutting public services.  The plan not only ends home delivery.  It also shifts postal retail services to private businesses and looks for other ways to close post offices.  It consolidates mail processing plants, which leads to more outsourcing to private consolidators through worksharing (Canada calls it Incentive Lettermail).   And it raises the price average consumers must pay — a book of stamps will go up 35 percent — at a rate much higher than the corporate mailers will pay.  (Canada Post hasn't said what their increase will be, simply that they "will continue to benefit from prices that are lower than the proposed meter rate.")

Canada Post announced its plan just days after the House of Commons adjourned for winter break, but that tactic will simply postpone the battle.  The opposition is just beginning to mobilize itself.  There will be more op-ed pieces and news articles about the problems, lobbying by the unions, complaints from citizen groups and small businesses.  Canadians have yet to visualize what 100,000 cluster boxes on their sidewalks will look like.

In the U.S., Issa's Postal Reform Act would do many of the same things as the Canadian plan — more postal retail in private businesses, fewer post offices, more outsourcing and privatization, more downsizing of the workforce, and more lower-paid postal jobs.  That's where things have been going for years now, and if conservatives were to gain more power in the government, the pace of privatization would accelerate.  

But converting thirty million residences to cluster boxes and installing something like 600,000 cluster boxes? You may want to think twice before you run out and buy up stock in one of the companies that builds cluster boxes.  

The postal reform legislation that eventually comes out of Congress is not going to contain Issa's provision mandating mass conversions to cluster boxes without the customer’s permission.  It can't happen here.  One wonders if it can even happen in Canada.

(Photo credits: CMB litter; CMB in the Toronto snowmother and child at CMB in Canada Post promo materials)

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