Canada Post’s CEO Deepak Chopra’s battle for relevance

 

President and CEO of Canada Post Deepak Chopra sees a digital future and is determined to transform the Crown corporation to meet it.

President and CEO of Canada Post Deepak Chopra sees a digital future and is determined to transform the Crown corporation to meet it.

TARA WALTON/TORONTO STAR

Vanessa Lu Business Reporter

Obituaries for the post office have long been written, and somehow it survived. But Canada Post’s chief executive officer believes the biggest threat now looms in the form of tablets.

“The last 40 years we’ve enjoyed the greatest bull run in our industry. But now paper has a real competitor,” said Deepak Chopra, who just marked his first year at the helm of the Crown corporation. “I feel it’s a race against time to reposition our business.”

Previously, every new technology came with new bills to mail out, from credit cards to cable service to cellphones. Banks replaced passbooks with statements. Flyers emerged as an advertising tool. Direct marketing grew.

Even email hasn’t replaced traditional mail service altogether.

“How many emails do you get a day? Hundreds? Did you ever receive hundreds of letters a day?” Chopra asked. “The consumer to consumer mail has always been less than 7 per cent of our business.”

But unlike the laptop or smartphone, the tablet has more paper like qualities.

Chopra, 48, an accountant and former head of Pitney Bowes, starts listing them.

It’s portable, slipping easily into a purse or briefcase. It’s getting thinner and smaller. Its contrast is better, with a longer battery life. Wi-Fi is everywhere. And it can store millions of pages.

“It’s more like paper. Can you hang out with a laptop on a hammock or on the beach?” he said. “But a Kindle or a tablet? Yes, you can.”

For the longest time, there was resistance at Canada Post to pursuing digital business over fears it would cannibalize the postal service.

But e-commerce is only going to grow, Chopra said, and the post office wants a piece of the action. That means offering services from logistics to packing boxes to actual delivery of online purchases.

Chopra believes the company must focus on both physical and digital delivery, and that’s why he has split the business in two — putting new management on both sides.

He acknowledges it has been a challenging first year. He arrived as Canada Post was installing new technology in its processing plants, a move sure to mean fewer jobs at some point.

Management was already deep into negotiations with the Canadian Union of Postal Workers about cost cutting, and the union launched weeks of rotating strikes across the country last summer.

With uncertainty over delivery, letter volumes fell, and Chopra eventually ordered the shutdown of the whole system, locking out its 48,000 unionized employees.

“I really had to look at the context of the financial health of the company,” he said, noting Canada Post’s pension liabilities continue to grow. “What would ensure our long-term viability? We do not want to be a burden on taxpayers.”

The federal government quickly ordered the carriers back to work, imposing lower wages than the company’s final offer.

An arbitrator was appointed to settle outstanding issues, but Coulter Osborne eventually quit after the union challenged the choice on the basis he was a unilingual Anglophone with no postal experience. A Federal Court backed the union, arguing a bilingual arbitrator is needed. None has been appointed yet.

The Supreme Court also ruled against Canada Post in the fall, over a near three decade pay equity dispute with its female employees, costing the company $150 million, which it took as a loss in the third quarter.

Canada Post is now in negotiations with its rural and suburban carriers, who deliver mail to community mailboxes.

CUPW president Denis Lemelin concedes Chopra took over at a difficult period, but says his union wants to make sure Canada Post sees itself as a public service first, not a big private corporation.

“Deepak Chopra has four years left in his mandate,” Lemelin said. “He has to remember it’s a public service. It’s there to serve the 34 million people of Canada.”

Chopra says he’s committed to protect the core business, but he’s also looking to the future.

“To us, digital means making services of the post office available to Canadians 24-7,” he said, referring to online access to hold mail or make a change of address.

He pulls out his BlackBerry to show Canada Post’s free app, available since last April. It started with finding postal codes, and is now expanding to tracking packages or taking a picture on a smartphone and sending it as postcard, that Canada Post will print out and mail for a fee.

“We can’t accept defeat just because digital has arrived,” Chopra said, predicting we are entering a decade of duality, where people might get a magazine in print as well as on their iPad.

While people speak of transformation to survive, he sees it more as transforming to grow.

“We want to make sure that we’re relevant to the next generation of Canadians as much as we were to the last one,” he said.

What’s in the mail?

Canada Post CEO Deepak Chopra argues there are different components of mail they are:

• Bill and statements — and they are going electronic. That’s why Canada Post needs to offer alternatives like the ePost service, which it calls the mailbox inside your house, compiling bills into one. “I don’t believe Canadians will remember 30 passwords to collect their 30 bills, vs. one login, one password.”

• Evidence mail — That’s everything from credit and debit cards, health cards, drivers’ licences and loyalty cards.

• Emotional mail — It represents 7 per cent of the business that is unlikely to disappear, from Mother’s Day and Christmas cards to wedding invitations to Grandma’s letter to a grandchild.

• E-government — As governments move toward delivery services online instead of in person, more items could be sent through the mail, from a vehicle registration sticker to passports.

• Marketing mail — It includes flyers as well as addressed mail from charities to business.

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