Canada Post incurred a pre-tax loss of $107 million in the first quarter of 2023. This loss was primarily attributed to stagnant parcels revenue and a decline in Transaction Mail and Direct Marketing revenue.
Compared to the same period in 2022, Canada Post’s pre-tax loss in the first quarter improved by $22 million, as it recorded a loss of $129 million previously.
However, revenue decreased by $32 million, equivalent to a 1.7% decline compared to the first quarter of the previous year.
Parcels revenue remained relatively unchanged, with slight decreases in volume compared to the prior year. Direct Marketing revenue and volumes experienced a decline as businesses reduced their marketing efforts, while Transaction Mail revenue and volumes continued to diminish.
During the first quarter of 2023, operational expenses decreased by $34 million, or 1.7%, in comparison to the same period in 2022. This reduction was mainly driven by lower employee benefits, although it was partially offset by higher non-capital investment costs.
Canada Post Parcel Volume
Given that parcels contribute approximately half of Canada Post’s revenue, the organization is actively investing to enhance its competitive position in the market and ensure it remains a trusted delivery partner.
Strategic investments are being made to improve service and tracking capabilities, optimize the postal network, expand capacity, and enhance the overall customer experience.
While revenue of parcels experienced a slight growth of 0.2%, or $1 million compared to the corresponding period last year, parcel volume actually declined by 7.6%, equivalent to about five million parcels.
The parcels business remained affected by a competitive environment, with the package delivery sector being disrupted by emerging cost-effective competitors and rate-shopping platforms.
Additionally, Canada Post said parcel volumes were influenced by a relatively weaker ecommerce market, attributed to reduced consumer spending.
See the full press release about Canada Post First Quarter results here.
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