Canada Post Strike May Hurt Canadian Workers as Businesses Shift Services

Source: Canada Post
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“It’s a consumer’s world right now. … They want their packages yesterday. When delays happen, there’s a risk the customer will bash them online or complain and ask for a refund, which could be a revenue loss.”

Mo Datoo, director of strategy and planning at eShipper (Source: The Globe and Mail)

It appears many small business online retailers in Canada are shifting their shipping requirements to alternative shippers away from Canada Post to continue to service their customers.

While the rotating strikes by Canadian Postal workers are now in their second week, the impact of this strike may do long-term damage to the country’s postal system and its workers.

The Canadian government doesn’t seem too interested to find a quick resolution as the postal service has lost a lot of its letter business while trying to shift to parcel deliveries.

Yet, despite rising parcel delivery numbers, Canada Post has only eked out marginal profits, probably adding to the government’s lack of interest for a quick resolution.

Maybe the government is not really that optimistic that parcel volume can continue to increase at recent levels with more delivery companies investing in Canada.

eCommerce is a huge booming market in Canada and the private sector is trying to take advantage of the opportunity to service the country.

Within the last year, both UPS and UK’s Royal Mail have invested in Canada through their Canadian divisions to expand more parcel delivery capacity.

Prime Minister Justin Trudeau said when UPS announced their expansion in Canada, “UPS is the kind of company we want to see flourish in Canada” and he welcomed the addition of “1,000 new middle-class jobs.”

In other words, the PM endorsed the competition over Canada Post’s parcel business! Not very encouraging for Canada Post workers and their future.

Impact on U.S. and Foreign Sellers

About the only real impact of this strike to date may be on foreign sellers that usually use the postal service to ship orders to Canadian customers.

Many Canadians prefer out-of-country shippers to use the postal system for orders as Canada Post’s importation fees are typically lower.

In comparison, UPS, FedEx, DHL, and others charge a brokerage fee that on lower-priced items could be a substantial additional cost to Canadian consumers versus Canada Post.

But even here, the couriers have made changes to reduce costs and be more competitive. Canada Post may eventually have to charge higher importation fees to make up for lost revenues in letter mail, leveling the playing field.

For now, cross-border shipments continue to be delivered, but likely with a few days of delays. Canadian consumers buying from outside Canada are least likely to be time-sensitive, so this is not a pressing issue until there is a full work stoppage.

But sellers need to continue to monitor the situation to avoid having their orders get caught up in a potential full work stoppage should both sides not find a resolution soon.

Almost daily, Canada Post updates the situation on their website.

READ MORE: Canada Post Rotating Worker Strike

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