Taking action to be more competitive
When the pandemic arrived in 2020, demand for parcel shipping came fast and furious. The world – and the parcel delivery market – was changing at a rapid pace.
Canada Post had already shifted its business focus years earlier. In the 2010s, as letter mail continued to decline and parcel deliveries grew, we had started to develop our Parcels business to meet the changing needs of Canadians. Canada Post became the country’s ecommerce delivery leader, at one point delivering two out of every three packages bought online, which supported several years of annual profits.
By 2019, the Parcels business represented the largest share of the company’s revenue. It was during that same year that we initiated a comprehensive transformation plan, designed for ecommerce growth. The pandemic-driven ecommerce boom arrived, and the Corporation pivoted. We responded by delivering everything we could for Canadians, knowing this was the moment to invest and reposition to seize the ecommerce growth opportunity.
Acting on our transformation
The Corporation has continued to take action to be more competitive. We’ve been executing our transformation plan and have launched major projects to increase capacity and improve service across the country.
While our transformation is far from complete, we’ve made important advancements. As part of our strategic plan, A Stronger Canada – Delivered, we built a new leading-edge parcel sorting facility that can handle a million parcels a day. In 2023, the new facility helped Canada Post achieve some of the best on-time service results in the company’s history. We’ve expanded and upgraded other facilities across the country.
We’ve also invested in technology in our network, improved and launched other new services, reduced our environmental footprint, and prioritized the health and safety of our people. The plan is designed to return the company to growth and put us on the path toward financial self-sustainability.
In 2023, the new Albert Jackson Processing Centre helped Canada Post achieve some of the best on-time service results in the company’s history.
Transformation highlights
Some of our key transformation initiatives:
- The new Albert Jackson Processing Centre, which opened in 2023. Located in northeast Toronto, it is our largest, fastest and greenest parcel sorting plant and a critical hub for our entire national network. Able to handle one million packages a day – and process an incoming parcel for dispatch in less than four minutes – the facility has doubled our capacity in the Greater Toronto Area, where most of Canada’s packages originate. It is already improving service for Canadians and businesses across the country.
- Modernizing services and expanding capacity across our network. We’ve expanded and opened new post offices, invested in automated parcel sorting equipment, upgraded facilities, improved tracking of deliveries, and modernized many of our digital platforms. These critical steps position the company to better compete for parcel deliveries and enable it to process higher volumes faster, enhancing the customer experience.
- We are committed to 2030 and 2050 science-based climate targets as we reduce emissions on the road to net-zero. To provide more sustainable shipping options for Canadians, in 2023 we launched carbon-neutral shipping for all domestic ground services. Recognizing the changing expectations of Canadians, this service provides sustainable delivery options that offset the emissions from deliveries. For every tonne of greenhouse gas emissions generated, we remove one tonne from the atmosphere by purchasing high-quality carbon offsets. Carbon-neutral shipping has been an important competitive differentiator for Canada Post.
- Canadians clearly want fast, reliable and flexible service when it comes to their ecommerce deliveries. Given the current market dynamics, we’ve been working with our bargaining agents to test new parcel delivery services, including weekend delivery and late induction for next-day local delivery.
Strategic moves focused on our core mandate
In early 2024, Canada Post took major steps to focus its business and effectively double-down on its core mandate of providing a modern postal service.
The company is transforming its information technology (IT) model to better serve the changing needs of Canadians and businesses, and to continue to lead in the dynamic parcel delivery market.
As part of the changes, Canada Post announced plans to divest Innovapost – its IT shared-service provider – to Deloitte Canada. The Corporation brought strategic IT capabilities in-house to deliver digital innovations to customers faster. The Innovapost divestiture is set to close in the second quarter of 2024.
The Corporation also divested SCI Group Inc., a leading Canadian third-party logistics provider, to Montréal-based Metro Supply Chain Inc. The move allows Canada Post to focus its resources on its transformation to better serve Canadians and to position for growth in the ecommerce market. The SCI transaction closed March 1, 2024.
Increasing our competitiveness
While the Corporation has slowed some transformational investments due to its current financial situation, Canada Post remains committed to increasing its competitiveness, now and into the future. The company must continue to evolve and adapt to meet the realities of a dynamic and increasingly competitive ecommerce delivery market – and should have greater flexibility to do so.