Holiday sales at risk as small businesses struggle with rising shipping costs and delayed orders
A Canada Post strike has disrupted mail delivery nationwide, leaving small businesses scrambling to adjust during their busiest selling season, according to BNN Bloomberg.
The strike began on Friday, with 55,000 workers walking off the job over demands for fair wages and safer working conditions.
Small businesses across the country are now searching for affordable and timely alternatives to deliver orders, fearing the impact on their operations as the strike continues.
Jessica Duffield, who owns Wishes & Whatchamacallits, a small business in Saint John, N.B., selling pop-culture-inspired products, described the situation as “a scramble and a little devastating.”
Reflecting on the challenges, she said, “Do you pause your shop and lose all of your momentum, or do you try and make it work?” When the strike began, her business had about 40 orders waiting to be processed.
Typically, most of her items, such as prints and stickers, are shipped through Canada Post because it is the most affordable option.
However, sending larger items, like crewneck sweaters or customized commissions, through other couriers would cost her over $20 each compared to the $8 rate offered by Canada Post.
“This week I had to really scramble to figure out ... am I going to be absorbing all these extra costs?” Duffield said.
She acknowledged that canceling orders would be devastating during the holiday season.
With many alternatives being either more expensive or offering limited tracking until shipments reach Halifax, she is considering driving 45 minutes across the US border to Maine to mail some orders. “(For) the rest, I probably will have to eat some of that expense by using a courier,” she said.
Dan Kelly, president of the Canadian Federation of Independent Business, said many of the small businesses he has spoken with have reported that alternatives to Canada Post are two to three times more expensive.
He also noted that private courier companies are struggling with capacity issues.
“It’s not like these private sector delivery companies had just massive amounts of surplus capacity, so that is very much a challenge,” he explained. Businesses also face additional challenges with cheques and invoices stuck in the halted mail system.
Kelly observed, “There’s still a huge number of businesses paying other businesses, suppliers, or their business customers with a paper invoice in the mail. It takes days, sometimes weeks, for that to be sorted out.”
For some businesses, this delay comes at a critical time. With Black Friday on November 29 and holiday shopping in full swing, many small businesses depend on this period, which accounts for up to 40 percent of their annual sales, according to Kelly.
OplusN, a Toronto-based company selling handmade leather goods, relies on this time of year for about 70 percent of its sales. Owner Omid Habibi said the strike has caused delays that have affected the company’s ability to fulfill orders and impacted customer satisfaction.
To address the issue, the business has introduced a local pickup option, offering a discount to customers who retrieve their orders directly. Habibi also noted that the company is using Amazon to fulfill some orders, even though the fees are high and leave minimal profit.
“While the fees are high and leave us with minimal profit, it ensures timely deliveries during this critical time,” Habibi said in an email.
If there was ever a time for the Government to take action, it's now. Canada Post going on strike 2 weeks before Black Friday devastates small businesses. As the leading Canadian carrier this has massive consequences—small businesses will unfairly bear the brunt. If small…
— Harley Finkelstein (@harleyf) November 15, 2024
Harley Finkelstein, president of Shopify Inc., expressed concern about the timing of the strike. He said on X, formerly Twitter, that the disruption “devastates” small businesses two weeks before Black Friday.
“As the leading Canadian carrier, this has massive consequences — small businesses will unfairly bear the brunt,” he wrote.
Small businesses are also grappling with compounded challenges after enduring labour shortages, inflation, and recent labour disputes at the Montreal and Vancouver ports, which increased their costs and strained their operations.
“It’s no surprise to anyone that small firms have been put through the ringer over the last couple of years,” Kelly said.
