Canada Post adds weekend parcel delivery
Canada Post will launch weekend parcel delivery in Ottawa, Montreal, and Toronto later this year as part of a modernization push.
Canada Post announced on Friday it will introduce weekend parcel delivery in the Ottawa, Montreal, and Toronto metropolitan areas later this year. The move is part of a plan to modernize its business and capture more e-commerce volume as it tries to return to profitability.
The national postal carrier credited the resolution of a long-running labor dispute with restoring customer confidence in the second quarter. This sparked an early recovery in parcel business and helped reduce the pre-tax loss by a third to US$199.7 million, according to the company's announcement reported by FreightWaves.
Mail carriers represented by the Canadian Union of Postal Workers ratified a retroactive, five-year contract in early June. Negotiations had lasted more than two years and were interspersed with two general strikes, rotating strikes, and work slowdowns. The volatile labor situation caused huge uncertainty, leading many e-commerce shippers to switch to private sector delivery companies.
The new contract runs through Jan. 31, 2029. Management says the stability it provides is allowing Canada Post to implement new parcel services and operational efficiencies.
Financial Performance
For the first half of the year, Canada Post's loss was $347.5 million, compared to $323 million in the same period last year. Quarterly revenue grew 1.5% year-over-year to $1.1 billion.
The company's latest figures show a sharp divergence between its parcel and traditional mail businesses.
| Metric | Q2 Year-over-Year Change |
|---|---|
| Parcel Revenue | +20.7% |
| Parcel Volume | +15.6% |
| Letter Mail Volume | -9.2% |
| Letter Mail Revenue | -9.1% |
| Direct Marketing Mail Volume | -0.2% |
Canada Post said the decline in letter mail volume and revenue was partly due to the prior year benefiting from an election and related candidate mailings. The mail business has been trending down for years as more Canadians use digital channels. The company also reduced costs by 6.3% during the quarter as operational productivity improved.
Modernization and Service Changes
Beyond weekend delivery, Canada Post's transformation plan includes several other initiatives aimed at the parcel market. Management sees e-commerce as a key growth opportunity.
The postal carrier intends to expand its home parcel pickup service to 8.6 million households. It plans to offer box-free, label-free returns with select online retailers, improve local next-day delivery service, and offer strategic pricing discounts for businesses.
A separate operational shift is also underway. Canada Post is working with communities nationwide to convert 621,000 addresses from door delivery to secure community mailboxes by early 2027. In total, about four million addresses will be converted to community mailboxes over several years.
Centralizing residential delivery is part of a larger plan, which includes closing post offices and lowering delivery standards, to turn around the company's finances and improve service. Since 2018, Canada Post has lost $4.76 billion, forcing it to rely on government assistance.
In the second quarter, the company also launched a proof of concept for Canada Shops. This is a new online marketplace designed to connect Canadian small businesses with customers across the country through the postal organization's delivery network.
