Canada Post selling off logistics business as part of effort to 'transform' Crown corp

Canada Post Inc. is selling off its third-party logistics business to a Montreal company, according to a media release Tuesday from the Crown corporation.

The sale of SCI Group Inc. to Metro Supply Chain comes as the country's national postal service "focuses on transforming to serve the changing needs of Canadians and Canadian businesses," says the release.

Canada Post recorded a $290 million loss in the third quarter of 2023, while its cost of operations rose by $26 million.

According to Canada Post's most recent annual report, SCI represents less than three per cent of the Crown corporation's total revenue.

The Canada Post Group of Companies, which includes Canada Post, courier service Purolator, its IT company Innovapostand SCI, has been losing money for the last five years.

Canada Post would not provide CBC News with an interview andinstead answeredquestions via email.

SCI operates independently from Canada Post, with its own employees and management, saidLisa Liu, media relations for Canada Post.

"It's a great company but no longer fit[s] the corporation's long-term strategy and growth plans," Liu wrote.

SCI does "warehouse fulfilment, supply-chain solutions and transportation management," said the release. Retailers pay SCI to warehouse their items and then pick, pack and ship them, Liu said.

SCI Group manages more than $1 billion worth of inventory per day at 75 warehouses across the country and employs3,000 workers,353 of them members of the Unifor union.

Future of 3,000 employees in question

Liu said questions about the future of the 3,000 jobs should be directed to buyer Metro Supply Chain.

Metro would not answer CBC's questions about what might happen to SCI's employees when the sale goes through.

"Until completion of the transaction, Metro Supply Chain and SCI must continue to compete and operate independently in the marketplace, and it is business as usual for both companies," wrote Serge Vallires, a spokesperson for Metro.

CBC has also reached out to Unifor and the Canadian Union of Postal Workers for comment.

The deal is expected to close in the first quarter of 2024, after which Canada Post will disclose details of the sale in its financial statements, Liu said.

Canada Post customers should not notice an impact, Liu said.