As Canada Post strike drags on, frustration mounts over ‘prohibitive’ courier costs

With the Canada Post strike now in its fourth week, some Canadians say they’re frustrated with major courier companies like FedEx, UPS and Purolator that they’ve turned to as alternatives.

“Calling Federal Express express is a bit of a sick joke,” said Neil Roberts, a retired civil servant in Ottawa who tried to mail a 100-gram letter with FedEx.

He was charged $35.29, and it took over a week to arrive at its destination.

The Canadian Union of Postal Workers (CUPW) went on strike on Nov. 15.

A Canada Post spokesperson told CBC that the company wants to use part-time workers for affordable weekend deliveries, which the union has opposed.

The union has also asked for higher wages to meet the cost of living, among other things.

Vendors venting

As the Crown corporation and union remain far apart, Canadians who can’t wait for the two sides to strike a deal have been turning to private companies.

Some small businesses at the Ottawa Christmas Market at Lansdowne Park told CBC Ottawa they’ve been able to keep their heads above water during the strike, but using the couriers, who charge higher prices, has cut into their profits. 

Iain Carrillo works for El Tambache Crafts, and said they’re taking a hit because they don’t want to force customers to pay the higher shipping costs.

“We haven’t changed our costs online to reflect the higher charges, so possibly down the road it could affect the cost of our products,’ Carrillo said. “But we like to maintain that price and make it fair for everyone.”

Whereas Ingrid Bjornson from Thor’s Trinkets said the “prohibitive cost” of using couriers means she’s almost completely stopped delivering.

“People are paying more shipping than they would be for the item itself, a lot of the time,” she said.

For others, the frustration is about the waste of time, not the money.

Joshua Lanthier co-owns Yavar Luxury Mongolian Marketplace and said the cost to ship with Canada Post and UPS is almost identical because he gets discounts through his store’s platform, Shopify.

Yet he still plans to return to Canada Post when the strike ends, because the post office’s longer hours give him more flexibility.

“Last weekend we had some orders coming from Black Friday that I had to deliver,” he said. “By the time I managed to get out there, UPS [was] already closed at like 4 p.m. on a Saturday.”

John Shaw, the owner of Soldar Metals, said there hasn’t been a significant impact on his books, but it’s “frustrating” to spend so much time learning new systems, managing deliveries, and working things out.

Others have been taken aback by the cost private couriers charge to deliver even small and light mail. 

Denise Dunac lives in the rural Ottawa community of Vars and tried to mail a Christmas card to her son in Vancouver. UPS told her it would cost $57, and FedEx quoted her $62.

“I couldn’t believe it,” she said. “I was just so upset.”

Depending on the card’s weight, a postage stamp from Canada Post would cost between 99 cents and $1.40.

Why couriers cost more

Canada Post has a “monopoly” written into the law, meaning private couriers must deliver letters for “four or five times more than the set rate for the post office,” said Ian Lee, a Carleton University business professor who has studied Canada Post’s revenues and practices.

While Canada Post is a for-profit company that isn’t taxpayer funded, it gets government support its competitors don’t because it’s a Crown corporation.

For instance, it doesn’t have to contribute to its employees’ pensions because the federal government covers Canada Post’s entire share.

Lee said that to truly compete with private courier companies, Canada Post needs to start charging the true cost of delivery.

“Courier prices are higher because they’re breaking even. They’re sustainable. Canada Post is losing money for six years in a row,” he said.

Lee expects the Canadian government will have to bail out Canada Post in 2025.

He also noted that private courier companies may engage in “dynamic pricing,” raising prices when demand goes up.

Purolator told CBC it hasn’t done that since the strike began, but it does adjust rates annually in September and implements surcharges on some items in early November — a “common industry practice” over the holidays “to help manage higher-than-normal shipping volumes and higher handling costs.” 

A FedEx spokesperson said it does not engage in dynamic pricing and has not implemented new fees or charges since the beginning of the labour disruption.

UPS did not respond to CBC’s questions by deadline.