Winnipeg Free Press - PRINT EDITION
Posted: 01/31/2014 1:00 AM | Comments: 0
AFTER dropping the bombshell in December on ending home delivery of mail in five years, Canada Post this week began the heavy lifting of selling the plan.
On Wednesday, Canada Post issued a news release on the guiding principles it will use to convert the remaining five million addresses that have delivery at their door to community mailbox delivery over the next five years.
It will start naming the neighbourhoods that will be affected first in a couple of weeks and start community consultations to figure out what will work best in each community before any changes start to materialize by the end of this year.
On Thursday, Canada Post CEO Deepak Chopra was in Winnipeg for meetings with customers and stakeholders and spoke to the Free Press about the business strategy behind the overhaul.
No one can deny the realities of a shrinking volume of business -- between 2007 and 2012 Canada Post delivered one billion fewer pieces of mail -- and the impact that would have on any corporation with $6 billion in fixed costs.
The Conference Board of Canada has forecasted that without the proposed transformation, Canada Post will be losing $1 billion per year by 2020.
The Boston Consulting Group has projected that by the same year, most of the western economies' postal systems will have transitioned to parcel delivery.
"There is one simple goal behind the business strategy driving our action," Chopra said. "And that is how to revitalize and protect Canada Post and make it relevant for the next generation of Canadians just as it has done for the last several generations."
Canada Post is now on the front end of the curve as far as other G7 countries are concerned, and Chopra says Canada Post is proposing a Canadian solution.
"There is no one-size-fits-all," he said. "When you are 60 million on an island called the United Kingdom, you have density and efficiencies to deliver product. You know our geography. The map of density does not work."
Canada Post hopes its strategy will achieve $900 million per year in savings. It also includes shedding between 6,000 and 8,000 workers but Chopra said that will all come from retirement and attrition.
The business case involves a very aggressive e-commerce strategy, a number of digital offerings and a direct-mail revitalization strategy.
"We think we are creating a very exciting business model for Canada Post to reinvent itself for the digital economy... and doing it without becoming a burden on Canadian taxpayers," he said.
Canada Post can't afford not to embrace the parcel-delivery opportunities e-commerce presents.
It has invested heavily in growing that capacity for three years and revenues are up six-to-seven per cent annually.
"That is higher than our competition in the space," he said. "We have an incredible network in many communities. Even our competition gives us their product for the last mile in northern communities and elsewhere where our competition does not deliver. We have a competitive advantage. We want to make sure we build on it and maximize it."
He said delivery of Christmas parcels in Winnipeg this year was up 18 per cent.
Its e-Post digital bill payment system is an offering Canada Post also makes in the face of plenty of competition, unlike the exclusive right it once had to deliver mail in Canada.
"Our digital offering does not have exclusive privilege," he said. "But it is a product that I believe more small and medium-sized businesses and municipalities will find very interesting. We wanted to make sure we had an offering in the digital space to compete."
Chopra also believes Canada Post can expand its direct-mail business servicing the growing number of loyalty programs and using expanded parcel locker facilities in the new community mailboxes to provide more sample deliveries.
Republished from the Winnipeg Free Press print edition January 31, 2014 B4
Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.
Having problems with the form?Contact Us Directly
Phones ring up record sales
Soft data, Syria strikes hit US, European markets
Kenney challenges provinces on TFWs
ACLU sues over Arizona 'revenge porn' bill
Province, hog industry square off over shortage
Funds through divisive visa system helped SD dairy
Grain lower, beef was higher and pork lower
US, California release roadmap for solar projects
More insurers to offer health law plans next year
Ban sought on children working on tobacco farms
Worker killed in explosion at Idaho dairy
Tim Hortons: Rule changes won't stop merger
Soda makers pledge to reduce calorie consumption
Dowdeswell new Ontario lieutenant-governor
Fracking in New Brunswick expected to pause
Wind power proposed to supply Los Angeles area
FDA warns doctors to beware fake drug distributors
Greek PM: no 3rd bailout, will set out reform plan
Man charged with threatening to take over ranch
Seattle to fine residents for not composting
Spotify's Top 10 most streamed tracks
Retail sales slower in July for province
US clampdown on tax manoeuvr leaves its mark
Soft data, Syria strikes hit US, European markets
South Africa makes nuclear deal with Russia
World trade body cuts forecasts
Pershing Capital threatens to sue Allergan
Russia proposes curbs for foreign media ownership
Grain mixed, livestock mixed
Cadillac to ditch Detroit for trendy NYC address
Government hackers try to crack HealthCare.gov
Enbridge boosts stake in Que. wind projects
Judge will make Detroit water decision Monday
US stocks open lower; CarMax sinks on earnings
Los Angeles port fire prompts school evacuation
Insurance plan for grain growers back in limbo
Canadian dollar falls amid overseas data
New York salt mine's rail project concerns Senecas
Retail sales down 0.1 per cent in July
Shoemaker Jimmy Choo to list shares in London