Posties take licking
Competition from Amazon a factor in $66M quarterly loss
Over 1 million parcels a day … That’s what we normally deliver during the period from Cyber Monday to Christmas.”
Canada Post vice-president Manon Fortin
Canada Post lost $66 million in the first quarter despite record spring shipments of parcels, according to Blacklock’s Reporter.
Earlier, the Crown corporation cited “fierce’’ competition from e-commerce juggernaut Amazon Canada.
“The financial impact of COVID-19 is unknown given all related uncertainties,” management wrote in a first quarter financial report.
The $66-million loss compared with a $23-million profit in the same quarter last year.
At a June 12 testimony at the Commons government operations committee, Canada Post gloated of a “huge increase” in parcels as stores shuttered due to the pandemic, pushing more consumers to shop online.
“We are now regularly delivering over one million parcels a day across the country,” vice-president Manon Fortin said.
“That’s what we normally deliver during the period from Cyber Monday to Christmas.
“We’re also delivering on weekends across the country.”
Parcel revenues grew by $53 million to $666 million in the first quarter, documents obtained by Blacklock’s Reporter show.
However, labour costs grew by seven per cent, while Canada Post noted a decline in letters and flyers.
Fortin said increased demand for parcel deliveries led the corporation to hire temporary workers “to bring greater stability and to cover all shifts”.
The post office lost $153 million last year and $276 million in 2018. That followed combined pre-tax profits of $388 million in the period from 2014 to 2017.
“The postal industry is reliant on parcel business growth,” the 2019 annual report said. “Double digit e-commerce growth, globally and in Canada, is expected to continue. While posts are well suited to service this market, competition is fierce and dynamic.
“Amazon’s large scale in-house last-mile delivery in the U.S. demonstrates the growth in e-commerce will propel our biggest Canadian customers to expand their own delivery solutions in direct competition with us.”