Landmark moment
Not content to rest on 250 years of laurels, Canada Post plans for the future
This Canada Day marks a milestone anniversary for Canada Post: 250 years of connecting Canadians and making remote trade and commerce possible. It’s a particularly poignant time in the corporation’s evolution as it embarks on its latest transformation; one that will keep the institution that predates the Dominion of Canada relevant in the digital age.
For hi s part, Deepak Chopra, president and CEO of Canada Post, is looking forward to the possibilities the future holds and to continuing the corporation’s legacy as a market maker. The fact is, Canada is a $1.7-trillion economy and Canada Post enables $240-billion of economic activity each year. Put another way, 15% of Canada’s GDP is enabled by the postal service.
“No other single corporation enables trade and commerce to this extent,” says Chopra. “This anniversary and this time in the history of Canada Post is both exciting and humbling. In many ways, this institution is a 250-yearold startup because we have to reset and find a way to blend the traditional with the new to define a new role for ourselves. It’s a tremendous responsibility and opportunity.”
In order to make sure it sets the right course and in response to the recent Conference Board of Canada report that projects the postal service will lose $1-billion a year by 2020 because of the drastic and ongoing declines in letter mail volumes, Canada Post has reached out to Canadians for their input on what they’d like to see from the postal service of the future.
It has also convened dozens of meetings across the country with small business leaders and Chambers of Commerce to help ensure it is playing its part in helping these economic drivers grow. At the same time, Canada Post is looking back, taking stock of its experience and taking lessons learned to guide next steps. And those next steps are taking the corporation back to the future.
A little history: Formal postal service got its start in Canada with the Treaty of Paris in 1763. Great Britain had assumed control of Lower Canada and people were calling for an organized postal system in order to communicate over the country’s vast distances and to maintain relationships with their families in their homeland.
“As the country grew in terms of population and before the creation of the Dominion of Canada, the postal service was the only institution that was financially selfsufficient. It was connecting Canadians in a meaningful way. It was the enabler of essential communication,” says Chopra. In addition to letters, the postal service was also de- livering newspapers at no cost. And, thanks to the introduction of railway mail cabins in 1854 and long-term contracts, it made railways viable at a time when passenger service alone was insufficient to sustain them. Canada Post would go on to use the railways to deliver the mail for the next 130 years up until 1971. “Canada Post made small airlines viable as well thanks to the contracts we had with them to deliver the mail.”
In 1859, the postal service expanded its role beyond enabling communication when it introduced a parcel delivery service. It was the organization’s first significant reinvention.
“That was a game changer for us. Suddenly people had access to products they otherwise would not have access to,” says Chopra. “In 1884, when the T. Eaton Company introduced the first mail-order catalog, the postal service was able and ready to effectively enable ecommerce in Canada in its true sense. The only difference between ecommerce then and now is that today you place your order online versus via catalog. From its earliest days, the postal service has been a monumental enabler of trade and commerce and continues to be to this day.”
Fast-forward to the 1960s and the emergence of the Diner’s Club card quickly followed by now ubiquitous credit cards that gave rise to a new phenomenon in mail: monthly bills and statements. Prior to the onset of credit cards, there was no regularity of mail. Suddenly, from 1969 to 1975 mail grew by one billion pieces as credit card companies, banks, telephone companies, cable companies, utilities all began mailing bills and statements to their customers.
In response, in 1971 Canada Post introduced postal codes in order to build automation into its infrastructure to handle the ever growing volumes of mail.
“Unless you have coding you cannot automate sorting,” says Chopra. “The famous Langevin Block, the current seat of the Prime Minister, is the post office. First experiments of automation were conducted in the basement of this old postal building. And postal codes are now part of the fabric of the nation, defining geographies and creating the framework for marketing campaigns. It is a tangible reminder of just how deeply entrenched Canada Post’s history is in the building of the country.”
For 40 years Canada Post had a virtual monopoly on mail. Business thrived. And then, just as suddenly as the boom in mail delivery took hold, it spiraled downward. In the five-year period between 2007 and 2012 mail declined by one billion pieces. Almost 30% of that decline took place in 2012 alone. Not surprisingly, financial losses are expected for 2013.
“The last 40 years have seen the epic rise and fall of the mail. A lot of people ask me is it the end of the post office? We have reinvented this service at least 10 times in our 250 year history. We will reinvent it again to be a new postal service for the next generation of Canadians. If we were the inventors of the original ecom- merce why wouldn’t we create the new ecommerce? ”
Glimpses of that reinvention are already visible. Canada Post is the No. 1 businessto-consumer parcel delivery company in the country, delivering three out of every four online purchases. The reason for that is simple: infrastructure. Canada Post has the most comprehensive delivery mechanism in the country. It first began offering home delivery 150 years ago. It has 6,500 post offices (more outlets than Tim Hortons and McDonald’s combined) and since 1984 community post and parcel boxes.
“We are democratizing shopping for sellers and buyers. Our parcel business is up 300% in Yellowknife. In the last four years, parcels from China are up 400%. We are connecting Canadians with global retailers,” says Chopra. “At the same time, our services make it affordable for Canadian small businesses to sell to far off places.”
In addition to its focus on ecommerce, Canada Post has also created ePost, an online secure post office. Free to all those who sign up, it allows users to receive all their bills in one secure, authenticated location eliminating the need to log on to different accounts with mul- tiple passwords. “It is the only electronic identification-based mailbox linking your physical identity with your digital identity,” says Chopra.
“As well, ePost also has an electronic vault that allows you to safely keep scans of your essential documents, such as your passport, medical records, life insurance policy, and tax receipts. We’ve created one secure site to allow you to pay all your bills and store all your important documents.
Perhaps most important, Canada Post is not afraid of change.
“Whenever we do heavy lifting in terms of transformation, we then see a 15- to 20-year period of stability and growth,” says Chopra. That heavy lifting will include changing its plants, sorting equipment and delivery network to accommodate the changing needs of Canadians.
“While there is less paperbased mail the rest of mail is growing: government services and documents are now delivered in the mail. Prescriptions are delivered in the mail. This will only continue going forward. As we celebrate this anniversary, we are reshaping the postal service for the next 250 years.”