Canada Post has disclosed that it made a loss $153 million before tax in 2019 as severe e-commerce competition hampered its parcels business growth and the paradigm shift toward online communication triggered mail operation decline.
The corporation says packages processing and delivering requires more technology, real estate, vehicles and time relating with customers than conveying letters, a load that weighs on profits as tech giants like Amazon enlarge their reach.
According to Canada Post, the number of addresses getting daily mail and parcel service soared by 168,000 in 2019 but that increment does not reflect on Canada Post’s balance sheet as residents and businesses increasingly chat, advertise and transact business digitally.
Parcels revenue increased by $232 million in 2019, surpassing $2.7 billion to overtake revenue from statements, letters and bills for the first time.
Revenue from “transaction mail” decreased by $69 million or 2.5 per cent year over year while volumes drop by over 192 million pieces or 6.4 per cent.
The Canada Post Group of Companies, which owns the large majority of the Purolator Inc., reported a loss of $23 million before taxes for 2019, against a loss of $118 million in 2018.
Canada Post reveals COVID-19 pandemic did not impact on its business in 2019 but the pandemic has the potential to affect its operations this year and beyond.
