Meeting the challenge

One of the mainstays of Canada as a nation is its postal system, binding the country together. Yet, for some time Canada Post’s performance was dismal, for instance, with deliveries subject to prolonged delays. More recently however, there has been a major turnaround and that agency has survived in the face of possibly mortal competition.

Canada Post’s earning record exemplifies that success. For 14 years, Canada Post has generated a profit, in sharp contrast to its U.S. counterpart. Last year, the latter registered a $2.8-billion loss and its postmaster-general predicted that the service could lose as much as $6-billion in 2010, with volume declining the most since the 1930s.

Canada Post generated a 5.4 per cent increase in revenues from parcel transactions.

There were huge gains in profitability last year, up just over 66 per cent from the previous year, while revenue from operations climbed by 3 per cent. The return on equity improved radically, from 3.8 per cent to 6.1 per cent, in part from better use of cash in its investing enterprises.

Canada Post has been very innovative.

To round out its service in 1993, it purchased a 75 per cent stake in Purolator, the courier, and added another 15.96 per cent in 1999. To compensate for Canadians’ continuing shift to email and other means of electronic communication, Canada Post has introduced SmartFlow Document Management Services, which help businesses communicate with each other. Also, now there is Innovapost, a segment of the Canada Post that offers information technology with specialization in web developments.

There currently, too, is a Direct Marketing Line. Part of its imaginative strategy, Canada Post now provides scented cards.

It should be noted also that Canada Post now has a 96 per cent on time delivery record, serving 14.7 million addresses from 6,600 post offices across the nation.

Nowadays some of the postal service’s biggest customers, the housing and financial sectors, have sharply reduced their direct-mail budgets because of the business recession. The postal service hopes to lure them back, perhaps with a campaign for businesses to send mail in bulk at discounted rates.

In Europe, postal services are experimenting with offering electronic mail facilities to customers, and some have expanded into banking as well. In Japan postal services provide savings accounts that have accumulated huge totals.

Despite the significant changes made by Canada Post, the public generally is unaware of all that, and few even know that Purolator is a subsidiary, not a competitor, of Canada Post.

In the future, Canada Post could present other financial services, such as insurance, and deal in stocks and bonds.

The added convenience of one-stop shopping for those activities would greatly encourage the use of postal services and assure that Canada Post continues its prominent role in our economy.


Bruce Whitestone