Digital disruption

As it stands today, Canada Post’s operations are at odds with sweeping technological changes affecting traditional postal systems. This effect is known as digital disruption, which describes rapid changes that outpace established social and operational business models. Even the most basic assessment of the corporation’s main features and issues reveals a critical turning point, requiring careful restructuring acknowledging the network’s history and national significance.

Opposing the need for change are those who point to Canada Post’s recent earnings. Since its 2013 introduction of the five-point action plan targeting strategies such as labour attrition and expanded retail franchising, it has managed to turn a profit. Its 2014 annual report revealed net revenues totaling $148 million, far surpassing $75 million in losses from the year before.

Misleading financial gains

Financial gains only tell part of the story. While operations revenue from the Canada Post group of companies rose to $8 billion in 2014 from $7.6 billion in 2013, letter volumes continued to drop, seen in a downward slope from 10.6 billion pieces in 2010 to 9.1 billion pieces in 2014.

“There are some instances where we still rely on letter mail, but it’s generally seen as quite an archaic way to communicate with customers…the question is, does it legitimately make sense to have a postal service in the way we conceived it?” -Amanda Clarke

Shrinking use of ‘snail mail’ in the advertising, publishing and business spheres aggravates this downward trend. Moreover, though online shopping is often identified as essential to Canada Post’s future, a close up look at e-commerce reveals an industry crowded with competitors and, so far, weak commercial uptake in Canada. Combined with a reduction in personal, face-to-face services, future financial gains may not be assured.

What’s more, as websites such as Facebook and Twitter continue to replace postal mail, the role served by Canada Post as a respected national institution becomes increasingly irrelevant.

Carleton University public administration professor Amanda Clarke suspects that it will be difficult to reconcile the tension between the Crown corporation’s dated business and the rapid-fire appeal of e-mail, websites and smartphone messaging.

“There are some instances where we still rely on lettermail, but it’s generally seen as quite an archaic way to communicate with customers…the question is, does it legitimately make sense to have a postal service in the way we conceived it?” says Clarke.

Union denial

The answer to that question depends on whom you ask. At CUPW, there appears to be little if any recognition of Canada Post’s precarious place in the digital realm. In fact, CUPW Ottawa president Ian Anderson denies the existence of imminent threats outright.

If the Crown corporation maintains its current state of affairs…it will have great difficulty weathering disruption in the digital age.

“I think Canada Post is doing just fine…it’s self-sufficient. This five-point plan is just a manufactured crisis,” says Anderson.

The proof will be in the pudding. Even with Canada Post expanding into the e-commerce market, the corporation admitted in its 2014 report that, “…there is still a long way to go to create a financially sustainable postal service.”

In the meantime, this uphill climb may put off taxpayers who are already becoming more and more removed from Canada Post’s reach.

Waning public support further complicates Canada Post’s ability to succeed in the coming years. If the Crown corporation maintains its current state of affairs in terms of e-commerce, letter mail, delivery services and overall ownership, it will have great difficulty weathering disruption in the digital age.