Supply Chain Scanner - Week of December 2, 2024

Weekly blog by Emily Atkins

Postal shutdown harming small businesses and opening the door for couriers

The increasingly acrimonious dispute between Canada Post and the Canadian Union of Postal Workers (CUPW) that has resulted in a more than two-week-long work stoppage may be leaving an enduring imprint on Canada’s home delivery landscape.

The labour action, which began on November 15, completely shut down Canada Post operations, just as the busy holiday season got underway. About 55,000 unionized workers are off the job. Parcels, letter mail, flyers and admail are all languishing, undelivered as the strike continues, now into its third week.

Although Canadians are less and less reliant on the postal service for deliveries. Small businesses in this country do count on Canada Post to deliver parcels, particularly for e-commerce orders. According to the Canadian Federation of Independent Business (CFIB), which represents 97,000 SMEs, a strong majority (79%) of small businesses rely on Canada Post services to do business.

In a poll taken in early November, 75% of members of the organization told CFIB they would be negatively affected by a work stoppage, particularly with challenges to cash flow due to delayed invoices and cheques and higher cost delivery alternatives.

For businesses that rely on the postal service, finding alternatives on short notice has been a challenge and in many cases, it’s more costly. Across the country, small businesses are hurting as a result of losing Canada Post services.

In some cases, there are no alternatives as small-town and rural businesses may not be served by courier companies. For other businesses courier services are available but more expensive. One business owner in northern Saskatchewan told CBC that normally he would drive 80 kilometres to mail his parcels to customers. Now the only option is a $70 courier bill, for the same package that would ship for $3 by Canada Post. And he’d have to drive even further to drop it off.
And with the increase in volumes, some businesses have reported crashing websites when they try to book a pickup with a courier.

Notwithstanding these anecdotes, Canada Post courier company Purolator says it is ready to step in where the mail service can’t. Purolator plans to process more than 43 million packages during its peak shipping season, including more than 25 million pieces for the month leading up to Christmas - some of which is anticipated to be volume from those impacted by the Canada Post strike.

All this is set against a backdrop of failure at Canada Post. The crown company is not doing well, posting a $315 million loss in the third quarter this year, with a significant portion of that due to a decline in its parcel business. Analysts cite the company’s unwillingness to compete in the parcel market with weekend deliveries and the flexibility to compete against more nimble private organizations which rely on gig labourers to make their deliveries.

“Canada Post operates in an increasingly competitive industry where reliability is key—businesses and consumers alike may permanently shift to alternative providers, eroding Canada Post’s market share and financial viability. The ripple effects of this strike threaten to strain businesses, harm profitability, and weaken confidence in a vital service provider,” said the Edmonton Chamber of Commerce in a statement.

“Small firms depend on a reliable postal service, and they need mail and parcel delivery service provided by Canada Post to remain fully operational. We’re asking both parties to negotiate in good faith and reach a quick resolution for the sake of Canadian small businesses and consumers,” said Corinne Pohlmann, executive vice president, advocacy, at CFIB.

“And as the federal government has ignored almost every attempt by Canada Post to deal with its unwieldy cost structures, CFIB will call on the government to use all its powers (including binding arbitration or back-to-work legislation) to keep the postal system working if negotiations are unsuccessful.”

Meanwhile, talks were suspended on November 27th as a mediator said the two sides were too far apart. At the same time, Canada Post has begun laying off workers as the strike continues, a move CUPW calls an unfair labour practice. The union filed an Unfair Labour Practice complaint with the Canadian Industrial Relations Board (CIRB), saying it is “a clear intimidation tactic in violation of the Canada Labour Code” and an attack on the right to strike that is enshrined in the Canadian Charter of Rights and Freedoms.

It's not looking too positive for a return to work before the Christmas season.

Join the conversation on Canada’s Logistics Community forum!

Emily Atkins
President
Emily Atkins Group

 

Emily Atkins is president of Emily Atkins Group and was editor of Inside Logistics from 2002 to 2024. She has lived and worked around the world as a journalist and writer for hire, with experience in several sectors besides supply chain, including automotive, insurance and waste management. Based in Southern Ontario, when she’s not researching or writing a story she can be found on her bike, in a kayak, singing in the band or at the wheel of her race car. LinkedIn: https://www.linkedin.com/in/emilyatkinsgroup/