#CanadaPost; #ecommerce; #OnlineCommunication; #SlowerParcelBusiness; #MailOperationsDecline
Ottawa, May 21 (Canadian-Media): Intense e-commerce competition causing slower growth in Canada Post's parcel business and its decline in mail operation due to an ongoing shift toward online communication resulted in a Canada Post's loss of $153 million before tax in 2019, media reports said.
Canada Post. Image credit: Twitter Handle
Although last year more than 7.7 billion pieces of mail and parcels were delivered, Canada Post said that packages require different resources than mail delivery.
This has caused a block in its profits as tech giants such as Amazon are expanding their reach.
"Parcels processing and delivery requires more technology, space in buildings and vehicles, and time interacting with customers, making it significantly more costly than sorting and delivering letters," Canada Post said in a release after markets closed Wednesday.
Although there was a surge in the number of addresses receiving daily mail and parcel service numbering to 168,000 in 2019, Canada Post said, residents and businesses increasingly chat, advertise and do business digitally.
Canada post said that immediate impact of the COVID-19 pandemic on Canada Post is not obvious in the numbers released Thursday, but it said its business could significantly be affected in 2020 and, possibly, going forward.
Amid border closures and travel controls, surging consumer demand has also seen a drop in corporate orders.
Residential deliveries have been at the same pace as the drop in business-to-business parcels due to online ordering items by house-bound Canadians, Purolator Inc. chief executive John Ferguson had said late March.
The Canada Post Group of Companies, which owns the vast majority of the profitable Purolator, reported a loss of $23 million before taxes for 2019, compared with a loss of $118 million 2018. The net loss in 2019 was $14 million compared with a net loss of $93 million in 2018.
Purolator itself showed a before-tax profit of $152 million, a roughly five percent decrease from $161 million of black ink in 2018.
Canada Post said its parcels revenue climbed by $232 million last year, topping $2.73 billion to exceed revenue from letters, bills and statements for the first time.
The revenue from transaction mail dropped by $69 million, or 2.5 percent, year over year to $2.71 billion.
There was a decrease in postal service's direct marketing revenue by $32 million or three percent to generate roughly $1.1 billion.