Canada Post reports first yearly loss in 16 years as USPS faces crisis

Canada Post has posted its first annual loss in 16 years, which raises the question whether it's on the same path as the embattled U.S. Postal Service, which is waging a losing battle against the Internet.

The Canada Post Group of companies, which includes the Purolator courier service and SCI computer systems, reported it lost $327 million in 2011, despite a slight increase in revenue, The Canadian Press reported.

Its revenues last year were $7.48 billion, up 0.8 per cent, but it had an operating loss of $226 million, compared with a $142-million operating profit in 2010.

Canada Post blamed the loss on a 25-day work stoppage last June, which it said cost $100 million in lost business, as well as a 4.6 per cent drop in mail volume. The total decline over the last five years totals 20 per cent, The Canadian Press noted.

"Deep and enduring shifts in technology and demand for postal services point to the urgent need to transform the business," the Crown corporation said in a statement.

"Achieving a competitive labour cost structure will be crucial given that home delivery of parcels—a highly competitive business—is becoming a critical part of our future activity."

Canada Post, which had 69,000 employees last year, was also hit by costs to fulfill pension-solvency obligations and to deal with a court decision related to pay equity.

In the past, Canada Post has adapted to the growth of private couriers that have poached business. It's revamping mail delivery services through what it calls Postal Transformation, which includes saddling mail carriers with parcel delivery.

People concerned about the future of Canada Post need only look across the border at the crisis facing the U.S. Postal Service.

The Washington Post reports some U.S. senators are trying to get the postal service to delay the closing of thousands of post offices and distribution centres as part of a three-year plan to cut $22 billion in costs.

The first wave of hundreds of closures, with accompanying job cuts, are scheduled to start in June unless the Senate and House of Representatives reach a deal to forestall it within the next two weeks.

The postal service's efforts to cope with business lost to private couriers and electronic mail have been criticized as a chaotic shambles.

The Washington Times reports that U.S. lawmakers are at odds over how to tackle the problem, while the Government Accounting Office warned that failing to follow a strategic plan in shutting down post offices may be jeopardizing Americans' access to postal services.

(CBC image)