Canada Post's pain is helping alternative delivery services gain
Some alternative delivery services say they are already receiving an increasing number of inquiries from businesses looking to reduce their reliance on Canada Post even though its workers have only launched a ban on doing overtime so far.
For example, Toronto-based Stallion Express Inc., which launched in 2015 and focuses on shipping goods for online sellers , said it has recorded a 22 per cent spike in “inbound inquiries and new-account requests” ever since talks of a strike by Canada Post’s workers surfaced earlier this month.
“For most online sellers … shipping isn’t just another expense, it’s a huge part,” chief executive Pramod Bhat said in an email. “Constantly jumping between carriers is disruptive and expensive, so when uncertainty hits Canada Post, merchants look for a steadier lane.”
On Thursday, the Canadian Union of Postal Workers (CUPW), which represents about 55,000 employees at Canada Post, directed employees not to work for more than eight hours a day. The decision comes about six months after the workers went on strike for about a month.
Back then, workers were ordered back on the job by the Canadian Industrial Relations Board (CIRB), an independent government tribunal, which had been asked by the federal minister of labour to review the dispute. The CIRB determined that the sides were unlikely to reach an agreement by Dec. 31, 2024, so it forced workers to resume their duties until May 22.
Since then, representatives of the union and Canada Post have had several meetings, but have failed to reach an agreement. As a result, there were fears of another strike — similar to the one in November that reportedly cost small businesses more than $1 billion in lost revenue and sales — starting on May 23. But CUPW decided instead to just restrict overtime work.
Canada Post said its share of the parcel delivery business declined to 29 per cent in 2023, from 62 per cent in 2019, due to the rise of low-cost private delivery services, so talk about another postal strike may force businesses elsewhere.
Alternative carriers such as GoBolt are already working with their clients to “derisk Canada Post” as much as possible.
“We’ve proactively worked with our parcel merchants to plan for moments like this,” GoBolt chief executive Mark Ang said. “The last time Canada Post went on strike, many carriers got inundated and stopped picking up new volume … so we have formulated not just a Plan B, but also a Plan C, D, etc.”
He said the company has had an increase in “interest and activity” from companies looking to become less reliant on single carriers.
“This latest strike activity has only reinforced what we’ve long advised: relying on one carrier is a risk that can directly impact customer experience and revenue,” he said.
But the increase in activity alternative carriers are reporting isn’t as high as it was in November, said Clement Sabourin, a spokesman for Montreal-based carrier Nationex.
The current demand is about 10 per cent to 15 per cent higher than normal, but it was about 25 per cent to 30 per cent in November, he said.
“We are trying to use the strike as an opportunity to demonstrate to new businesses how serious we are, how different we are,” Sabourin said. “Because right now, we have approximately 20 per cent of our fleet that is electric that allows us to deliver across Ontario and Quebec.”
The last time Canada Post’s business was disrupted, Burlington, Ont.-based Chit Chats Express Inc. reported a 300 per cent increase in new shippers, said Juhee Cha, a company spokesperson.
“We are seeing a similar increase this time around with new inquiries and shippers,” she said. “Since Canada Post has to deliver to every Canadian address, when they do strike, there are some addresses where there is no viable option, for example, PO boxes, as other carriers do not typically deliver to PO boxes.”
The latest strike threat just adds to Canada Post’s recent woes.
Since 2018, the Crown corporation has reported more than $3 billion in losses before tax and has said it will post another “significant loss” for 2024. The losses have compelled it to tap its cash reserves in recent years.
In early 2025, the federal government said it would give Canada Post about $1 billion in repayable funding to prevent it from going bankrupt. But Canada Post said it needs to make structural changes for it to survive in the long run.
A recent report filed by a commission tasked by the federal government to look into the key issues of disagreement between Canada Post and its workers said that the crown corporation was effectively “bankrupt” and that it needed to phase out its daily door-to-door letter-mail delivery service.
“The Government of Canada can decide to subsidize Canada Post’s growing deficits indefinitely,” the report said. “Or necessary changes can be made to modernize the way Canada Post goes about its business.”
The report said there are several reasons behind Canada Post’s downfall, including the rise of parcel delivery competitors and certain work rules that restrict efficiency, such as not being able to assign existing employees additional work once they have finished their assigned tasks.
• Email: nkarim@postmedia.com
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