Canada Post has many problems with its employees. One of the greatest tensions is not with the President, nor with its directors, or even with its supervisors. It has to do with a piece of software.
Specifically, a piece of software that calculates the routes for every delivery agent across Canada Post’s national delivery system. Historically, this is called the Letter Carrier Route Measurement System. Since approximately 2010, it has been ported to a third-party piece of software.
The route system is seriously flawed and has cost the corporation almost a billion dollars in lost productivity and revenue. The calculations have caused serious erosion of trust between employees and management, unjust firings and dismissals, and the creation of routes with some that exceed over 20 km a day in walking. As covered in a Canadian Broadcasting Corporation report, the length of such routes is causing fatigue and injuries.
The current Letter Carrier Route Measurement System (LCRMS) must be improved or shelved
Delivery agents average of an 8 hour work day is calculated by the software. The software has variables such as time, distance, and volumes to use for its results. The calculations for a delivery route are usually made once every two to four years, a few even longer. The variables Canada Post uses to decide when or if a designated area requires a recalculation is not known. Once a series of routes for a particular area is finalized, they are unchangeable until the next recalculation. When Canada Post designates a recalculation, it goes through a costly and time-consuming process called a restructure.
The restructure requires people specializing in route measurement to count for two weeks all the volumes in a given area and enter it into the system. The general area is limited and usually impacts approximately 25 or less delivery agents. The labour itself to monitor, capture data, enter, and modify the routes, which takes about three months and another three months to implement, is estimated at about $100,000. It is a costly and long process for Canada Post to make a change to their delivery system.[1]
When the results finally do come, they are inconsistent. Some routes can be finished in a five hour day, while others will finish in nine.
It is estimated that out of every ten delivery agents, 2 complete their day in less than five hours, 2 finish in 6 hours, 3 finish in 7.5 hours, 1 in 8 hours, and 1.5 in 8.5 hours or more. These times do not factor in those who take designated breaks or do not take any.
The results are found through discussions and observations with over 100 delivery agents over an eight-year period in Winnipeg. However, the reader must be aware that studies of this nature require access to internal statistics and management disclosures, but these two facets are not available, so the above approach has to suffice.
If the observations are close to being correct, the current system over an 8 year period has likely cost Canada Post $800 million in overtime and lost productivity costs.
Canada Post does not require any early finishers to do extra work until the 8 hours are met. On the other hand, those who finish late and cause overtime because of LCRMS flaws are routinely questioned, interrogated, or in rare cases, discharged. In most cases, supervisors are not allowed to question LCRMS calculations about route structures—even if they know a route is poorly made. Regardless, they are required to conduct an audit of the employee’s performance if a pattern of overtime is found. Many employees complain about being bullied or harassed in this situation and a host of supervisors are frustrated at being forced to apply pressure on employees by upper management where it is unmerited.
GeoRoute is the software used as the modern basis for the Letter Carrier Route Measurement System. This program is a proprietary piece of third-party software developed and sold by a Montreal based company called Giro. Canada Post uses GeoRoute for calculating delivery routes.
The past president of Giro, Paul Hamelin, stated that the algorithm is created by them but the data and constraints are provided by the host company, in this case, Canada Post.[2] One must be cautious about who is to blame, there is no public data that could determine the origins of this problem. This document will use the older acronym <em>LCRMS</em> instead of GeoRoute because it is a generic term that does not directly accuse either party as the source of the problem.
Another problem is access to the software to measure for accuracy or recommend changes. Since it is developed by a private company, the union representing Canada Post delivery agents, CUPW, does not have access to the proprietary elements of the software or the ongoing formula changes. They cannot verify the software or the data and constraints provided by Canada Post as accurate.[3]
One must also take into account that many delivery agents (previously known as letter carriers) avoid taking lunch breaks, or any breaks whatsoever, in order to finish their route sooner. For some, perhaps, 2 delivery agents out of every 10, saves them from doing overtime and enduring any repercussions from it. This is a hard statistic to gather as delivery agents do not informally give out this information and therefore this is sheer conjecture. This may also inflate the time of lost productivity for those that finish their routes early.
How the $800 million dollar price tag was arrived at:
If you are interested in how the figures were compiled, here is the formula.
The following calculations assume that there are about 16,000 delivery agents across Canada, which is a low estimate, but this keeps the calculations on the conservative side. It is better to under than overestimate. [Officially 17,500 not including RSMCs which would bump it up to 26,000. These stats do not give a percentage of full-time vs part-time which could impact the numbers.]
It is based on an average hourly rate of $35 per hour, which includes benefits and other payments borne by Canada Post on top of regular wages.
There are 260 business days, and in some calculations, 60 of those days would be overtime-free because of low volume situations.
It is estimated that 1.5 out of 10 delivery agents are under scrutiny for having a pattern of overtime. The costs for surveillance, monitoring and officially meeting with employees for what is considered excessive overtime is conservatively estimated at around $18 million dollars annually. This does not include awards from grievances or staffing routes while a person is in an interview.
The lost man hours due to LCRMS improperly calculating a route, making it easy to finish in 5 hours instead of 8, which roughly happens for 2 out of every 10 routes created is massive. This is about 1,248,000 hours lost. Canada Post can recover approximately $44 million in costs every year correcting this instance alone.
4 out of 10 delivery agents who ignore aspects of the LCRMS designated line of travel saves the company about 1 hour a day. This saves the company about $36 million dollars a year.
The remaining 3 out of 10 delivery agents finish their routes in the allocated 8 hours. LCRMS calculated these ones correctly.
In summary, the flaws in the LCRMS software costs the Corporation in excess of $62 million every year, and if delivery agents didn’t ignore aspects of the program such as not taking lunch breaks, and not following the routes as designed and improvising, it could well be over $100 million. Over an eight-year period, the total is $800 million. This is a conservative estimate and if a proper audit was done with source data, it is believed the results would be much higher.
This estimation does not include the cost of injuries due to the increased length of delivery routes.
On the other hand, Canada Post has been looking into a program called <em>Descartes</em>[4]–whether this applies to replace GeoRoute or is being considered for other portions of Canada Post operations is not known.
This situation needs to be rectified immediately. The modification or replacement of this program would make it more equitable for both the Corporation and employees and save a significant amount of money along the way.
Flexible delivery routes
Now with the advent of digital technology and more accurate measurement systems, Canada Post is in the place to make routes more flexible. In previous iterations of the LCRMS system, this was not possible. This is the best solution that is a win-win for both employees and management.
Presently, the system runs like this: in the summer, the volumes are normally very low and the majority of employees can finish their eight hour day in 6 hours. In the winter, the same route can take up to 10 hours.
Neither does the calculation take in snowstorms, unplowed sidewalks or streets, rainstorms, major street repairs, or darkness (especially in winter), unanticipated high volumes of mail, admail or parcels. These variables can easily add over an hour a day from what the LCRMS calculates.
Canada Post and the Canadian Union of Postal Workers need to arrive at a flex solution where in the summer the points of call increase to make for an 8 hour day, and in the winter when volumes are high and the weather is challenging, the points of call decrease in order to meet the 8 hour day.
They need a more accurate and open source solution than what the present LCRMS presently provides.
This also would allow Canada Post more flexibility to adapt and remain competitive. Amazon, one of Canada Post’s largest customers, is looking to set up their own alternative delivery network which would greatly impact Canada Post. In such a loss, Canada Post would need to restructure its delivery system at great cost while having to face a steep decline in revenue. At the moment, it cannot easily do this. The flex structure would address this important concern with only a minor interruption.
End to target based incentives for management
Management officials, typically those above supervisors and other clerical functions, are not unionized. Their compensation system is performance based. If they meet certain targets, they are financially compensated. If they do meet certain targets, they can be demoted or fired.
Jon Hamilton, spokesman Canada Post, admits to this form of compensation in an article published by the Toronto Star:
““We are not the highest, we’re not the lowest,” he said, but by having a portion of compensation at risk, people who perform above and beyond will receive the incentive, and those who don’t won’t.
“It’s not a slam dunk,” he added, noting it is tied to individual performance against their individual objectives that are tied to the overall goals of the corporation.”[5]
Canada Post has not disclosed how much these forms of compensation constitute managers wages for a variety of reasons.
One of the targets for management officials in the delivery service end is based on the flawed LCRMS. If certain targets are not met, even if they are not realistic or rational, forces managers to play hard-ball on supervisors, and in turn on employees. The present system does not allow for exceptions or empower supervisors to determine whether the problem is employee or software related. This creates a very toxic environment.
The performance for pay system should be reevaluated, modified, or even dropped. The toxic environment it creates is doing more harm than good.
*An older article published in 2011 shows problems with the LCRMS in other areas as well. Read The Math Behind a Letter Carrier Route for more information.*
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Footnotes:
[1] This is a general calculation based on three Route Measurement workers working for three months, plus extra help for information gathering for two weeks, clerical help, and upper management costs.
[2] https://www.youtube.com/watch?v=LrrDDjbMZ5o see around the 10 minute mark
[3] https://www.cupw.ca/en/letter-carriers-and-mail-service-couriers and http://www.cupw.ca/en/we-are-pushing-hard-meeting-resistance.
[4] http://www.cupw.ca/en/meetings-canada-post
See also https://www.facebook.com/notes/roland-schmidt/20190625-edmonton-postal-workers-demand-restructure-justice/