Canada Post recorded a loss before tax of $378 million in the second quarter of 2020. This increased loss was largely due to the significant impact COVID-19 had on revenue and costs, combined with added costs from the June 2020 arbitrator’s ruling that gave us new collective agreements with the Canadian Union of Postal Workers (CUPW).
In this CEO Update and video message, Doug Ettinger provides his thoughts on the second-quarter results and what it means for employees and the company.
With people at home and businesses closed, we saw a dramatic shift in what we were asked to deliver. Online shopping drove unprecedented growth in Parcels volume and revenue, but Transaction Mail and Direct Marketing volume and revenue declines exceeded the growth in Parcels. The estimated total revenue shortfall due to COVID-19 was $46 million. In addition, Canada Post’s costs related to COVID-19 increased by an estimated $118 million. The total negative financial impact due to COVID-19 was an estimated $164 million.
Although COVID-19 and the new collective agreements with CUPW contributed to the loss, the Canada Post segment would have still incurred a loss without these factors.
Key results for the Canada Post segment in Q2 2020 compared to Q2 2019:
- Early in the second quarter, Parcels volumes were as high as in past peak Christmas seasons. With physical stores closed due to COVID-19, Canadians shopped significantly more online.
- Volumes grew by 26 million pieces or 35.5 per cent
- Revenue grew by $226 million or 35.4 per cent
Transaction Mail results:
- Ongoing revenue and volume declines accelerated as businesses and Canadians used digital alternatives even more during COVID-19.
- Volumes fell by 102 million pieces or 14.7 per cent
- Revenue decreased by $104 million or 15.4 per cent
Direct Marketing results:
- Customers were already delaying or cancelling marketing campaigns due to COVID-19 as the quarter began, adding to the impact of ongoing digital substitution.
- Volumes fell by 652 million pieces or 53.4 per cent
- Revenue declined by $126 million or 46.4 per cent