Parcels*
ACROSS THE COUNTRY OR AROUND THE WORLD, CANADA POST HAS THE SHIPPING SOLUTIONS THAT MEET OUR CUSTOMERS’ NEEDS. THE OPPORTUNITY FOR LONG-TERM GROWTH IS PROMISING – BUT A WORSENING GLOBAL ECONOMY HIT HARD IN 2008.
Customers have several options when they entrust Canada Post with their parcels, ranging from Priority™ Next A.M., which provides overnight delivery by noon within Canada, and Xpresspost™, a “deferred delivery” service providing next-day service regionally and two-day service nationally, to ground parcel delivery services and a full suite of international delivery services. The Parcels line of business also offers several other services, including Borderfree™, which allows Canadian consumers who purchase goods online from selected U.S. retailers to obtain landed cost pricing (in Canadian dollars).
Revenue from the Parcels line of business amounted to $1.3 billion in 2008, or 21% of the Canada Post segment. Volumes fell 8.3% from 2007, to 159 million pieces shipped. This reduction was driven primarily by a change in mix in the international inbound business which saw a steep 26.7% decline in volume as the global economy worsened. However, the decline was more than offset by an increase in revenue per piece for international inbound. Overall, revenue increased 5.4% over 2007, driven by several factors, including rate action and strong growth in the Expedited Parcel line. A strong Canadian dollar in the first half of the year also mitigated the decline in inbound business from the United States.
The Parcels line of business operates in a highly competitive, low-margin, unprotected market. Canada Post leads in the home delivery segment, which benefits from the growth of e-commerce retailing.
During 2008, Canada Post forged a partnership with Purolator for air transport. This agreement gives us greater flexibility and control over our flights, helping to meet shifting service demands more effectively while ending our reliance on commercial passenger airlines. Canada Post and FedEx™ also combined forces to launch a new international service called Priority™ Worldwide, giving Canadian consumers a premium service offering to more than 220 countries and territories. Canada Post introduced other new products to meet specific customer needs. To strengthen its offering to the online community, Canada Post created a new product called eBay™ Flat Rate Box. And when financial institutions needed assistance to comply with new anti-money laundering legislation, they turned to Canada Post to co-develop an in-person identity authentication service.
To help customers track their parcels, we expanded our parcel scanning capability in 2008. We completed network-wide coverage for our motorized delivery personnel and added capabilities to support near real-time data transmission. We are also working to improve our service performance by strengthening process capabilities and transportation links.
In light of economic conditions, expectations for growth in 2009 are low. Meanwhile, global competitors are quickly adopting new technologies, accelerating the need for Canada Post to continue to make the necessary investments to remain relevant, deliver better service, and maintain profitable growth.
*Canada Post segment only. Does not include Purolator Courier.
Proof of Identity helps businesses save costs on new legal requirements
With fraud and identity theft on the rise, FINTRAC* now requires banks and some other organizations to provide in-person identity checks to ensure confidential or high-value items, such as credit cards, get into the right hands. As a company that already conducts more than 19 million ID verifications annually, Canada Post is in a prime position to help.
By signing up for Canada Post’s new Proof of Identity with Data Transfer, available for Xpresspost or Priority Next A.M. shipments, organizations can eliminate the hassle and expense of implementing and operating their own identity authentication system. Items are sent right to a post office, where the trained clerk verifies ID, then uses a secure digital channel to send the data, including signature, to a secure site for the bank or other institution to audit.
With close to 3,000 post offices now offering this service, Canadians will also never have to travel too far to pick up confidential items or credit cards.
* Financial Transactions and Reports Analysis Centre of Canada