Canada Post, a Crown corporation that recorded losses exceeding $500 million in 2022, recently sold its IT and logistics divisions.

Ian Lee, a business professor at Carleton University in Ottawa, said that Canada Post started restructuring because they finally realized the necessity of addressing this issue.

Last week, Canada Post announced that it would sell its internal IT business, Innovapost, to Deloitte Canada. The sale of Innovapost comes shortly after Canada Post announced it would sell its logistics company, which employs 3,000 people.

For his part, Canada Post spokesperson Janick Cormier said in a statement that Canada Post has undergone a transformation over the past two years, and the transformation plan laid the foundation for the company's development in the Canadian e-commerce market while achieving the company's core mission, which is to provide Canada with reliable postal and parcel services and deliver parcels to every address.

However, Lee believes that selling parts of the company or outsourcing will not be enough to save Canada Post. In the third quarter of 2023, Canada Post's losses amounted to $290 million.

Ian Lee, a business professor at Carleton University in Ottawa, said that Canada Post could follow the U.S. Postal Service's example and partner with major logistics companies to cover the "last mile."

Lee said that the number of letters decreases by 6% to 8% every year, and even if Canada Post works hard to deliver letters in the future, that will not help.

He also pointed out that Canada Post must strongly expand in e-commerce. The future of Canada Post lies in reinventing itself as a partner for e-commerce companies in an attempt to regain the business it has lost.

Lee said that Canada Post could follow the U.S. Postal Service's example and cooperate with major logistics companies to cover the last mile.

He explained that the U.S. Postal Service works with some major logistics companies that primarily transport millions of parcels to the U.S. Postal Service by postal code. The U.S. Postal Service is responsible for delivering the package to the customer.

But Lee added that Canada Post needs to cut costs for the plan to succeed, and they have to work with [unions] because its cost structure cannot even compare to independent postal couriers.

Also, Nita Chinzer, an HR expert and professor at the University of Guelph, said that companies that need to provide fair treatment for employees, cover a wide range of businesses, and serve the public at the same time are unlikely to form a group to sell at the lowest price.

E-commerce comes too late

Chinzer doubted whether Canada Post can successfully enter the highly competitive e-commerce field, saying, "It can be said that Canada Post is the last company to enter the parcel delivery market, and competitors have long strengthened their positions."

While the e-commerce sector grew by 3.5 percent last year, Canada Post did not grow in this field.

She said that exploring logistics and IT services will not lift operations from the bottom. Although it can increase revenue, it also increases costs, and therefore profitability does not improve.

She believes that Canada Post is trying to do too many things, and they need to focus on their core services.