Canada Post's struggles with ongoing labor disruptions and protracted contract negotiations are prompting shippers to lean more on private carriers, despite added fees and coverage limitations.
The government-owned carrier reported Wednesday that delivered parcel volumes are down 65% from the same time last year as the Canadian Union of Postal Workers' overtime ban that started in May stokes concerns over reliability. But shipping demand in Canada isn't plummeting — it's just moving elsewhere.
Canada Post-reliant shippers are shifting order volume to alternatives like FedEx, UPS, Purolator and DHL when able. Using these private carriers can come at a cost, however. As delivery providers bring additional volume into their networks, some are imposing surcharges they say will help maintain service quality during the high-demand period.
For businesses shipping in Canada, executing a strategy that limits disruption is key. As eyecare products seller Eye Drop Shop said on its website, "We understand the importance of timely delivery ... and are doing everything possible to maintain a smooth experience."
Canada Post customers roll out mitigation plans
Shippers generally aren't going to one specific carrier as a Canada Post alternative, instead opting for a couple of delivery providers to pick up the slack.
DavidsTea has onboarded two new last-mile delivery providers to reduce its dependency on Canada Post since the previous strike hurt sales, CFO and COO Frank Zitella said on a May 28 earnings call. The tea seller said on its website that its carrier diversity means orders will have less exposure to Canada Post disruptions.
Menopod, which sells a cooling relief device by the same name, is prioritizing other couriers to avoid delays, per its website. The company is only using Canada Post when necessary, such as for PO box deliveries, and is asking customers to provide street addresses to limit those situations.
"While Canada Post is still operating, their ability to handle parcel volumes efficiently may be affected—and delays are likely," Menopod wrote in a shipping update.
Eye Drop Shop is using Purolator and FedEx, save for Canada Post-only coverage areas like PO boxes and some rural locations. Clionadh Cosmetics has opted for FedEx and DHL while removing all Canada Post shipping options from its website. Supplement provider Fullscript has been tapping UPS and Purolator while disabling PO box delivery options.
The shift to other carriers isn't a straightforward endeavor for every company. Blueseventy Canada, which sells triathlon and swimming gear, is offering customers the option to ship with Purolator at a higher rate. However, the company's website noted Canada Post remains its preferred provider due to its country-wide coverage and security-focused options like signature-required deliveries.
“Many customers have asked if we have a 'Plan B' for shipping during the strike,” Blueseventy Canada said. “While private carriers such as Purolator and FedEx are available, they do not fully meet our specific shipping needs.”
Private carriers adjust pricing
UPS, FedEx and other delivery providers are levying surcharges and tweaking their operations to keep their networks running smoothly during the Canada Post disruptions.
So far, these carriers have been able to handle the additional workload more effectively than last year's peak season strike, said Imtiaz Kermali, VP of sales and marketing at eShipper.
"They all prepped quite well for this one," Kermali said in an interview.
UPS warned customers on its website that in-transit delays may occur in some areas of Canada as it prepares for increased demand. In turn, the carrier has made a bevy of network adjustments in response to the Canada Post disruptions, including the pause of some pickup services and refunds:
- Suspension of same-day on-call pickup service requests for UPS Domestic Standard shipments.
- Suspension of service refunds on all eligible Canada domestic and import services.
- Adding 90 more minutes to delivery time commitments for Express, Express Early, Worldwide Express, Worldwide Express Plus and Worldwide Express Saver.
UPS made clear it is prioritizing serving "existing customers and their existing volume" but noted it is ready to support additional deliveries as well. Rival FedEx also underscored its commitment to existing shippers — rather than new clients looking for a stopgap Canada Post alternative — in a service alert on its website.
While FedEx hasn't disclosed specific service adjustments like UPS, the company has made pricing changes. It placed surcharges on U.S.-to-Canada shipments on Monday, with no end date listed. FedEx International Ground shipments now have a $0.49 charge per package, while parcel and freight services are subject to a $0.49 per-pound fee. The move follows UPS' similarly priced surcharge on U.S.-to-Canada deliveries, which took effect May 18.
Smaller parcel carriers are making their own tweaks in response to the Canada Post disruption. Canpar Express began applying a demand surcharge of up to $2.50 per shipment on May 18. The fee generally applies to packages from higher-volume residential shippers exceeding their typical delivery demand “in any week during the potential Canada Post service disruption,” Canpar wrote.
Shipping companies that rely on Canada Post to deliver their customers' packages are leaning on other carriers to continue fulfilling customer demand.
This includes Chit Chats. While the delivery provider is keeping its Canada Post-based services active, it's advising users to leverage its Select service, which is not reliant on the government-owned carrier. Select is geared toward metropolitan deliveries and doesn't cover deliveries to PO boxes or rural route addresses.
"Purchasing Canada Post based services at this time is done at your own risk as the situation between CUPW and Canada Post may change at any time," Chit Chats said on its website.
