Parcel volumes drop and strike disruption grows, pushing Canada Post to its seventh straight annual loss
Canada Post reported a $315m loss before tax in the third quarter of 2024, exceeding its $290m loss from the same period last year.
According to BNN Bloomberg, the Crown corporation attributed the ongoing losses to its shrinking share of the parcels market and the financial impact of a continuing strike by its workers.
“An increasingly crowded and highly competitive e-commerce delivery market continued to impact parcels results in the third quarter of 2024,” Canada Post stated.
Parcel volumes dropped by six million packages, nearly 10 percent, compared to the previous year. Letter mail volumes also declined, though a stamp price increase nudged letter mail revenue higher.
The ongoing work stoppage, which began on November 15, has further strained Canada Post’s finances.
More than 55,000 employees have walked off the job, halting deliveries except for government benefit cheques. The strike centres on disputes over wages, contract work, job security, benefits, and working conditions.
Canada Post is on track for another significant annual loss in 2024, marking the seventh consecutive year in the red. Since 2018, the corporation has reported over $3bn in losses.
This financial decline reflects both ‘the Great Mail Decline’ and an erosion of its parcel market share, which dropped from 62 percent before the pandemic to 29 percent last year, according to its annual report.
Other shipping companies have experienced a surge in business due to the strike. Purolator, which is majority-owned by Canada Post, reported double-digit increases in volumes. E-commerce shipping platform Chit Chats also noted record demand.
“We have record numbers of shippers within the last week. Our volumes — we’re just trying to keep up,” said Kevin Ham, CEO of Chit Chats.
Meanwhile, FedEx implemented a ‘contingency plan’ to manage higher volumes, and some carriers introduced surge pricing.
Montreal-based Sheertex, a pantyhose manufacturer, reported significant increases in shipping costs, reflecting the strain on logistics networks.
Small businesses are particularly affected by the strike as they scramble to find affordable and reliable alternatives for order deliveries. Kevin Ham observed that consumers are also feeling the impact.
“It’s a hard time of year for both sellers — like e-commerce sellers — as well as consumers. The consumers are ordering, and if it was in the Canada Post network, their shipments are stuck,” he explained.
Large corporations are not immune to the disruption. Walmart Canada acknowledged that customers shipping to PO boxes and rural areas might face delays.
However, Walmart’s spokesperson Stephanie Fusco stated that most consumers purchasing directly from the company would experience “minimal impact.”
The last postal strikes in 2011 and 2018 ended with federal back-to-work legislation. While both the union and Canada Post agree on expanding parcel deliveries to drive revenue, they disagree on implementation.
The union advocates for full-time employees to deliver packages on weekends with overtime pay, whereas Canada Post proposes hiring contract workers to reduce costs.
Canada Post’s financial challenges are compounded by a long-term decline in letter mail volumes, which fell from an average of seven letters per week per household in 2006 to just two last year.
The corporation continues to navigate these structural and competitive pressures while seeking solutions to improve its financial position.
