Canada Put up is promoting off its IT and logistics departments, a transfer enterprise specialists say is a vital first step in saving a Crown company that misplaced greater than half a billion {dollars} in 2022.
“Canada Put up is disappearing earlier than our eyes,” mentioned Ian Lee, a enterprise professor at Carleton College in Ottawa who has researched the decline of Canada Put up.
“They’re beginning to restructure as a result of they’re beginning to lastly face that actuality.”
Final week, Canada Put up introduced it should promote its in-house IT enterprise, Innovapost, to Deloitte Canada. As a part of the outsourcing deal, Canada Put up will preserve an IT management staff whereas most of Innovapost’s 750 particular person workforce is absorbed by Deloitte.
“It was decided the present shared-service mannequin was not offering the velocity and agility wanted to compete right now and sooner or later,” mentioned a press release from Canada Put up.
That announcement got here every week after Canada Put up mentioned it could be promoting its 3,000 particular person logistics firm.
Canada Put up declined CBC’s a number of requests for an interview and as an alternative offered a written assertion.
“For the final two years, Canada Put up has been executing a complete transformation plan centered on serving the altering wants of Canadians and Canadian companies,” Canada Put up spokesperson Janick Cormier wrote.
“The plan positions the corporate for progress in Canada’s e-commerce market whereas delivering on its core mandate of offering dependable supply of mail, packages and parcels to each Canadian tackle.”
The profitable ‘final mile’
Lee mentioned promoting off or outsourcing components of Canada Put up’s operations will not be sufficient to reserve it. Within the third quarter of 2023, the firm misplaced a whopping $290 million.
“The way forward for Canada Put up just isn’t in pretending that they’ll ship letter mail when it is collapsing by 6 to eight per cent per 12 months by variety of items,” Lee mentioned.
Canada Put up should transfer aggressively and shortly into e-commerce, Lee mentioned. Gross sales of merchandise bought on-line and delivered to individuals’s properties are hovering.
“This future is in reinventing themselves as a associate of e-commerce firms and attempting to get again that enterprise that they gave up, and misplaced competitively, to the Amazons of the world,” he mentioned.
Lee mentioned Canada Put up may observe the U.S. Postal Service’s instance and work with main logistics firms to cowl “the final mile” — the ultimate a part of a package deal’s journey, which accounts for greater than half of supply prices.
The publish workplace is a group hub for a lot of small cities, however monetary losses at Canada Put up have pressured many rural retailers to shut.
“The U.S. Postal Service is partnering with a few of these large logistics firms who herald tens of millions of parcels. They principally kind them right down to the native postal code of the native publish workplace,” he mentioned.
“The one space the place Canada Put up has a aggressive benefit is the final mile. It goes to 16 million addresses. That’s the final mile.”
However Canada Put up would must carry its prices right down to make a plan like that work, Lee added.
“They are going to should work with [the union] as a result of their value construction just isn’t even carefully aggressive with the unbiased gig supply and even … FedEx,” he mentioned.
Develop providers to outlive, union says
The Canadian Union of Postal Employees (CUPW), which represents 60,000 Canada Put up employees, wouldn’t present CBC Information with an interview. (CUPW doesn’t signify any of the workers working on the companies being bought off.)
In a earlier assertion, CUPW mentioned it desires to see Canada Put up supply extra providers.
“CUPW has been advocating for a complete plan which might work to make sure the longer term monetary sustainability of Canada Put up by increasing providers,” spokesperson Siân Griffiths wrote in an e mail.
The union suggests Canada Put up may present extra postal banking, or begin performing check-in providers for seniors.
“This could not solely generate new streams of income however preserve and create jobs whereas assembly the rising wants of individuals throughout this nation,” Griffiths wrote.
E-commerce ambitions would possibly come too late
However Nita Chhinzer, a human assets knowledgeable in downsizing and a professor on the College of Guelph, mentioned Canada Put up must concentrate on its core providers.
Makes an attempt to discover logistics and IT did not increase the company’s backside line, she mentioned.
“Whereas it elevated income, it additionally elevated value in ways in which did not improve profitability,” she mentioned.
Canada Put up has been attempting to be too many issues directly, she mentioned.
“You may’t be the unionized firm that treats its staff properly, that is obtained a big geographic scope, that has a social duty as a Crown company to make sure accessibility to everyone, plus the corporate that’s going to supply the bottom value,” she mentioned.
Chhinzer mentioned she additionally questions Canada Put up’s possibilities of efficiently breaking into the crowded discipline of e-commerce. In September, the company opened a brand new processing facility within the Larger Toronto Space that it says will be capable of course of a million packages per day.
“Canada Put up … was the final to really enter the parcel market. They launched their initiatives properly after their opponents had cemented themselves,” Chhinzer mentioned.
Whereas the e-commerce sector noticed 3.5 per cent progress final 12 months, Canada Put up noticed no progress in that space.
“There are important essential flaws proper now with how Canada Put up is working,” Chhinzer mentioned.
