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Winnipeg Free Press - PRINT EDITION
Canada Post reads red letters
TORONTO -- Canadians mailed fewer packages through Canada Post in the second quarter, eroding results across most of the Crown corporation's operations, while its courier business Purolator got a boost, partly from more orders sent by e-commerce retailers.
Noting that the "decline of mail is not something that's going to rebound," the Canada Post Group of Companies said that reality would weigh on any new labour agreement with its workers.
The company reported a loss of $10 million, or $4 million after taxes, on Monday, which marks an improvement from a loss of $18 million, or $17 million after taxes, a year earlier.
But the Crown corporation says the latest quarter compares favourably largely due to a lockout last summer, which pulled down results in the comparable period last year, making the decline in the latest quarter seem less severe.
Mail volumes were down 4.4 per cent or 31 million pieces, it said.
Cost of operations rose 6.1 per cent, or $85 million, to $1.47 billion in the quarter ended June 30.
The company's Purolator courier business showed strength, with higher volumes pushing revenue to $302 million from $245 million a year earlier, particularly due to more shipments from e-commerce retailers.
Canada Post has a roughly $4.7-billion solvency deficit in its pension plan.
The company noted 71 per cent of its overall costs are tied to labour, which is why it believes it's important to reach a collective agreement with the union representing its employees.
"It's time for us to have some realistic discussions based on the current realities we now face," said Jon Hamilton, Canada Post's director of communications, in a phone interview.
"The decline of mail is not something that's going to rebound. Canadians are using Canada Post in different ways. Their expectations of what Canada Post can offer are different and we need to adjust for that."
-- The Canadian Press
Republished from the Winnipeg Free Press print edition August 28, 2012 B4
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