The organization’s financial situation at Canada Post was described as “unsustainable” by the chair of the board, who warned that it is struggling to compete with e-commerce platforms and facing a drop in demand. In the annual general meeting, André Hudon stated that significant changes are urgently needed to preserve Canada Post’s delivery network, which serves all Canadians. The board and senior management recognized the critical juncture that Canada Post is facing.
Experts have warned that if Canada Post doesn’t change its course soon, it could follow the fate of Blockbuster. The surge in online shopping during the COVID-19 pandemic has transformed the parcel delivery market, making Canada Post compete with rapidly evolving high-tech, low-cost operators.
Hudon highlighted that the impact on the company’s finances has been significant, with unsustainable financial conditions becoming clearer in every quarterly report. To address these challenges, the organization has taken steps such as pausing some investments to focus on core priorities and reducing costs at all levels.
The president and CEO, Doug Ettinger, mentioned that over the past two decades, Canada Post has transitioned from delivering 5.5 billion letters a year to about two billion. Facing a reduction in letter mail deliveries, Ettinger explained that the company has refocused on parcel delivery to cater to the growing demand in the market, which is projected to double in the next decade.
However, despite the efforts to stay competitive in the parcel delivery market, Canada Post’s market share has been halved since 2019. Ettinger emphasized the need for operational flexibility and regulatory support to improve Canada Post’s competitiveness.
In August, Canada Post reported a second-quarter profit of $46 million before tax, offsetting an operational loss of $269 million. The company announced divesting shares in subsidiaries earlier this year. Overall, Canada Post is awaiting approval on a new corporate plan that would emphasize financial self-sustainability, pending collaboration with the government shareholder.
The organization’s struggle to adapt to the changing parcel delivery market and the decline in letter mail deliveries have put its financial stability at risk. It is crucial for Canada Post to implement strategic changes to ensure its long-term viability and competitiveness.
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