Canada Post makes parcels a priority service

Focusing on turning a profit

Published on December 18, 2013
Canada Post CEO Deepak Chopra is seen before appearing as a witness at an emergency session of the House of Commons Standing Committee on Transport, Infrastructure and Communities in Ottawa Wednesday. — Photo by The Canadian Press

At the Canada Post facility on the outskirts of Toronto, employees are hurriedly processing thousands of parcels to keep pace with shipments that arrive every few minutes.

t’s the Christmas season, easily the busiest time of year at the post office, but activity at the Gateway parcels hub in Mississauga, Ont. is especially lively this year.

With a week to go before Christmas Day, Canada Post said it has already broken volume records more times in 2013 than ever before, surpassing the delivery of one million parcels per day a total of five times since mid-November.

On Monday, the company touched an all-time high of 1.25 million parcels shipped in a day.

Whether it’s a care package mailed by mom or an order from an online retailer, most of those parcels come through this facility, or smaller ones, across the country.

The postal service says these boxes and bubble envelopes are its future and will continue to be a priority as the company tries to rescue its struggling operations over the next five years.

Last week, Canada Post announced dramatic changes to how it operates, with plans that include phasing out the age-old tradition of door-to-door delivery. Without postal carriers travelling by foot, the company says it will save a significant amount of money.

Canada Post will also raise stamp prices by more than 35 per cent to 85 cents when purchased in a booklet. The price hike is even higher if you’re buying a single stamp, which will cost $1 beginning in March.

The announcements were met with plenty of criticism from those concerned that service cuts will hit seniors and the disabled especially hard. Others questioned whether raising prices while lowering perceived quality will wind up in a consumer backlash.

Canada Post chief executive Deepak Chopra addressed some of those concerns on Wednesday at a meeting of the House of Commons transport committee in Ottawa focused on the future of crown corporation’s business.

“If the mail is changing its shape and size, don’t we think the mailbox should change its shape and size too?” Chopra asked.

“So what we’re trying to do is adapt (to) the changing needs of Canadians.”

Chopra struck a positive tone during his nearly one-hour appearance at the committee, but said difficult choices had to be made.

“We believe Canada Post will remain a relevant, meaningful participant in the lives of Canadians,” he said.

This is where the parcel business comes in, from Canada Post’s perspective.

Leaders at the company have said parcels will help drive revenues because the price of shipping usually has a better profit margin. And while fewer people send letters, more of them are ordering products online.

“Computers have taken the place of a lot of the physical product that has gone through,” said Randy Carroll, plant director at Canada Post’s Toronto hub.

“We recognize the fact that (to) stay ahead, we need to start growing the parcel business.”

Each day Carroll walks the floor of the Gateway facility, a 1.1-million square foot building that operates around the clock and processes  an average of 43,000 parcels per hour.

He watches as a steady flow of trucks loaded with parcels back into loading docks where, like clockwork, forklifts raise pallets off the vehicles. Some of the packages are loaded directly onto conveyor belts for sorting, while others are set aside. It’s a strategic process that, to an outsider, looks like organized pandemonium.

A key part of his job is troubleshooting — preventing backlogs from slowing the sorting process.

Black Friday, for instance, is a wildly popular day for online retailers who slash their prices and ship quantities that pale only in comparison to Boxing Day. If a truckload of laptops arrive unannounced because of a massive web sale, then Canada Post must be ready to react.

To prevent those surprises, Carroll said often makes a quick call to his contacts at Best Buy or Amazon, in case he needs to call in staff reinforcements.