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Canada Post and the Fall of Lettermail: Jackman-Atkinson

January 11, 2020 8:14 AM | Columns

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By Kate Jackman-Atkinson, Neepawa Banner & Press

Canada Post Truck

A Canada Post truck is seen illegally parked in downtown Toronto on Friday, Sept. 27, 2019. (THE CANADIAN PRESS/Colin Perkel)

NEEPAWA, Man. — If your parcel of gifts arrived in time for Christmas, you’ll know that Canada Post has made parcel delivery its priority. It’s not surprising, the internet has forced almost every business to re-evaluate how and where it makes its money.

It’s clear that parcel shipping is where Canada Post’s growth will come from. Between 2017 and 2018, overall volumes were down almost 4 per cent, with only domestic parcels (10.9 percent) and overall parcels (21.7 percent) showing gains. This trend has continued into 2019 and in their Q3 report, Canada Post says, “There were no significant changes to our strategy during the third quarter of 2019. We remain focused on growing our Parcels line of business by supporting Canadians’ changing postal needs and ensuring we meet our service commitments.” While the corporation noted that their parcels line of business grew by $22 million in the third quarter of 2019, this growth was less than the declines in revenue from their core lettermail ($49 million) and direct marketing ($14 million) lines of business.

This year, Canada Post was expecting its peak season to run from November 11, 2019 to Jan. 12, 2020, to handle all the holiday shipping and returns. To meet this, the Crown corporation hires more than 4,000 seasonal workers, doubles their transportation capacity, expands delivery to weekends and extends customer service hours, something we saw locally with the post office open until 7 p.m. for the week before Christmas

Canada Post has been upfront about the importance it places on their parcel delivery line of business, in fact, their 2018 annual report noted their core strategy was to grow the business by being the country’s parcel delivery leader. It’s a good strategy — focus on what you can grow and don’t worry about the rest. Canada Post has a monopoly on the door-to-door delivery of lettermail across Canada, so they don’t have to work very hard to protect that side of their business. And if every piece of mail has to be handled and sorted, it makes sense to be paid $20 or more for a parcel, than about $1 for a letter.

The problem is that this philosophy is gutting the lettermail side of their business.

As the Christmas crush ramped up, and the post office was open later, first class mail was days behind. On Friday, December 20, we at the Neepawa Banner & Press finally got the mail that hadn’t arrived Wednesday or Thursday. And on Tuesday, December 24, mail from Friday, Monday and Tuesday finally made it into our box. We aren’t the only business that was waiting days on cheques and other documents to arrive. Certain types of parcels ship with a guaranteed delivery date, the same isn’t true for other products.

It isn’t just letter customers that are getting the short end of the stick. Other mailing customers, such as subscription newspapers, were slow to arrive. These are customers that week in, week out pay postage and in many rural communities, are among their local post office’s largest customers.

Canada Post should turn a profit and it’s clear that parcels are the only place they’re seeing growth. However, it’s a shortsighted plan that sees them focus on parcel delivery at the expense of everyone else. Customers have options and it’s easier to keep a customer than get a new one; lettermail customers can (and are) increasingly moving toward receiving their bills and making their payments online. These customers won’t come back. Direct mailing customers can move to other delivery methods. Parcel customers are spoiled for choice, not just from Purolator, which is 91 percent owned by Canada Post, but also the myriad of other national and regional services. Canada Post can decide its best plan for achieving profitability, but customers should know where they rank in priority.


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