2024-11-22 20:24:00
Canada Post saw hundreds of millions of dollars disappear from its coffers over the past quarter, largely due to its shrinking share of the parcel market, while an ongoing strike continues to hurt its financial results.
Canada Post said Friday it lost $315 million before taxes in the third quarter, compared to a pre-tax loss of $290 million a year earlier.
“Increasing competition from the e-commerce parcel delivery market continued to weigh on the parcel sector’s results in the third quarter of 2024,” Canada Post said. The number of packages fell by six million, or nearly 10 percent, year over year.
Postal mail volumes also continued to decline, although revenue increased slightly due to an increase in the price of stamps, the Crown corporation said.
The tough financial results put Canada Post on track for “another significant loss” in 2024, which would mark the seventh consecutive year in the red.
The financial results come as Canada Post faces a shutdown of its operations due to a strike of approximately 55,000 workers across the country.
The two parties negotiate, among other things, on salaries, job security and working conditions.
Due to the sudden cessation of deliveries (government benefit checks are among the rare exceptions), business at other shipping companies has increased.
“We have seen a double-digit increase in volumes week over week as we continue to meet the needs of Canadians during this busy period,” Purolator, majority owned by Canada Post, said in an emailed statement. Tuesday.
FedEx has a “contingency plan” in place to handle higher volumes, spokesman James Anderson said earlier this week.
Shipping platforms, such as Chit Chats, also reported higher volumes due to the strike.
Shippers’ profit margins could also widen, at least temporarily.
Montreal tights manufacturer Sheertex said this week that replacement shippers, overloaded with orders, have implemented “significant peak rates” on deliveries.
Small businesses have particularly felt the effects of the strike, as store owners and entrepreneurs frantically look for workarounds to get orders to customers quickly and affordably.
But even large companies face obstacles.
“Customers shipping to PO boxes and more rural areas may experience delays,” Walmart Canada spokesperson Stephanie Fusco said in an email. However, she argued that most consumers who shop online directly from the company would only see a “minimal impact”.
The previous postal work stoppage took place starting in late October 2018, when employees carried out rotating strikes lasting 31 days.
These strikes and another in 2011 ended when the federal government passed legislation forcing people back to work.
Canada Post has reported more than $3 billion in losses since 2018 as Canadians send fewer letters and competitors corner even more of the parcel market.
Households received an average of seven letters per week in 2006, but only two per week last year, according to Canada Post’s latest annual report, which called the trend “the great decline in mail.”
Both the union and the crown corporation have pushed for an expansion of package deliveries to increase revenue, but they differ on how to do it. The union says full-time employees should deliver packages on weekends at overtime rates, while Canada Post hopes to hire contract workers.
According to last year’s annual report, the Postal Service’s share of the package market fell from 62% before the COVID-19 pandemic to 29% last year, as Amazon and other competitors benefited from the growing demand for one-day home deliveries.
To watch on video
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**What are the potential long-term effects of the ongoing strike at Canada Post on the labor market in Canada?**
**Interview with Jane Doe, Labor Relations Expert**
**Interviewer:** Welcome, Jane. Thank you for joining us today. Canada Post has reported another significant financial loss primarily attributed to its declining share of the parcel market and a current strike involving 55,000 workers. Can you provide some insights into the impact of this strike on their operations?
**Jane Doe:** Absolutely. The ongoing strike has a profound effect on Canada Post’s operations. With 55,000 workers on strike, the company has had to suspend most of its delivery services, which directly impacts its revenue. As a result, we’ve seen an uptick in business for competitors like Purolator and FedEx, who are stepping in to fill that gap.
**Interviewer:** It’s concerning to hear that Canada Post is on track for its seventh consecutive year in the red. What are some of the underlying issues driving this trend?
**Jane Doe:** The main issues are a combination of increasing competition from the e-commerce sector and the decline in traditional mail volumes. Consumers are sending fewer letters and packages through Canada Post, opting instead for faster services or alternative carriers. The company has lost over $3 billion since 2018, reflecting this pressure to adapt to a changing market.
**Interviewer:** What are the specific areas being negotiated between Canada Post and the striking workers? How might these negotiations impact the resolution of the strike?
**Jane Doe:** The negotiations primarily focus on salaries, job security, and working conditions, all of which are critical for workers. A resolution must balance the operational needs of Canada Post with fair compensation and working standards for the employees. If both sides can come to an agreement that respects the workforce while allowing Canada Post to remain viable, it would greatly benefit both parties and the public.
**Interviewer:** You mentioned that small businesses are particularly feeling the strain of this strike. Can you elaborate on how they’re coping with the disruption?
**Jane Doe:** Smaller businesses often rely heavily on Canada Post for their shipping needs. With the strike, they have had to scramble for alternatives, which may not only be more expensive but could also lead to delays in deliveries. Many are turning to other carriers, but those carriers are also experiencing overload, resulting in higher shipping costs—significantly impacting the bottom line for these small enterprises.
**Interviewer:** And what do you think are the long-term prospects for Canada Post moving forward?
**Jane Doe:** The long-term prospects will largely depend on how Canada Post adapts to the competitive landscape. It will need to innovate its services, possibly embracing technology and exploring partnerships with other carriers to regain market share. Additionally, resolving the ongoing labor issues will be crucial to restoring its operational capacity and building trust with its workforce.
**Interviewer:** Thank you, Jane, for your valuable insights on this situation. It’s truly a critical time for Canada Post as it navigates these challenges.
**Jane Doe:** Thank you for having me! It’s definitely a situation to watch closely.
