Canada Post published on Monday its annual report for last year, revealing a relatively small loss of $29 million (given that it had more than $7.5 billion in revenue).
But it continues to bleed money- 2013 was the third year in a row Canada Post has been in the red.
The problem of course is that letter volumes are falling—down 30 per cent from 2007—while its costs have generally remained fixed.
The loss would have been far worse were it not for the mail delivery service selling off real estate such as a processing centre in downtown Vancouver.
Here’s a breakdown of what Canada Post, which remains obligated under law to deliver to every address, says are the costs to deliver the mail by each method:
And here’s how much it says those letter volumes have declined each year over the last seven:
The Crown corporation’s “costly obligation” has clearly “fallen out of balance” with its ability to remain viable, Deepak Chopra, chief executive said in Canada Post’s annual report.
To restore its financial footing, Chopra launched in December a sweeping five-point plan to be implemented over the next half decade.
READ MORE: 7 things to know about Canada Post’s plan to axe home delivery
It calls for among other things a halt of home delivery, which will be replaced by delivery to group or community boxes — a savings of $185 for every home it stops delivery to.
Perhaps the most important plank in the strategy though is for the continued ramp up of parcel deliveries.
The parcels business, which includes Purolator, accounted for 24 per cent of Canada Post’s revenues last year, the service said Monday. Up from 21 per cent in 2011.
“Therefore, continuing to succeed in the parcel business will be crucial to the success of the Canada Post Group of Companies.”
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